We learn last week that the gamble of bailing out the banks and property developers is going to mean that the Irish Government debt and guarantee to them is depending on a major recovery. If investment is not coming into the country because of high cost of labour, energy, low tax revenue and high public expenditure, then the NAMA figures may not add up. Failure to tackle public spending and follow some of the recipes of the McCarthy report could see the NAMA plan doomed.
The worry is that the property valuation figures may be too high and there is not enough written off the asset value. Low demand for commercial buildings and houses could also hit their assumptions. Looking back at the struggle for Independence, the economic war of the 1930s, the neutrality of the Second World War and the decision to join the European Union, the decision to set up NAMA is just as momentous.
Joining the EMS was another major Irish decision as was leaving the sterling zone. The entry to the Euro was another landmark allowing us get low rates of interest and a link to the strong German economy. We really blew it with the property bubble and the independence of the economy is in doubt.
The economist David McWilliams is being proved right. We should really protest at the gamble, better to have the IMF than NAMA. It would be a quicker fix than this long term property speculation aided and abetted by the Government. The NAMA project is so big it probably needs a major international financial partner to stop too much reliance on the Irish taxpayer. We did not elect a Government to become the banking backer of the property sector.
Time for a General Election
Are we going to see this passed? Is it not a time to call a General Election and
get the people’s vote on this rescue plan. Such a huge decision needs the decision of the people and it might be a Yes to Lisbon and a No to NAMA. The IMF might give us a stronger cure and a quicker fix compared to a slow pain and a later decline to death via NAMA.
An irresponsible Government that failed to regulate the banking sector is now seeing a potential rescue of extraordinary proportions. No thanks, we would rather another less risky solution. Euro bankers please advise, IMF please advise. The rescue bill of €80 to €90 billion is far too much for a country the size of Ireland. Surely, we should be going to international financial centres to deal with such firms.
In Britain, major property firms have had to raise capital on the stock markets
to cover loan shortfalls as values fell. This is a far more stable solution. The Government should be seeking foreign partners with an expertise in property in places like London and New York and not land the failure on the taxpayer. They may have to take on some burden to get banks and credit moving again but other large investors are needed.
Where do the Greens stand in this major speculation? Where do the Independents position themselves and how does Fine Gael feel about it? At first they were in favour and now are having second thoughts. We would love hear more from our readers please send us your views via our website blog.
Shame on those responsible
Reading over the weekend, it is obvious that there is great concern over the looming collapse of the Liam Carroll property empire where a Dutch bank that is not part of NAMA is seeking asset sales to get its money back. This could lead to a fire sale and lower values than NAMA or the Minister for Finance wants. AIB are owed over €1 billion euro in this case.
This will further add to the Minister’s figures being off target. This is a very risky time for businesses and the taxpayers. Can the government pull through this debacle? Can the borrowing burden be shared with international finance? The figures are too large for a small economy. Shame on those who allowed this mess to happen.
Spraoi success
The organizers of the Spraoi festival must be happy with attendances despite the bad weather. They put on a very good show.
Friday night was dreadful and Sunday evening was not much better so the weather man was not too kind.
Nevertheless most events went ahead we are glad to say but some Friday evening outdoor events had to move indoors. Great to see Christ Church used after the vandalism during the week. The silent movie turned out to be a great success with accompanist Eric Sweeney. It was great to hear visitor accents from England, Scotland, USA, France and Spain, as well as many from Dublin. It did give the area a tourism boost that is badly needed.
Many more would come if there was one major international act in Walsh Park in conjunction with Spraoi, was a suggestion put forward by an operator in the entertainment industry. This might bring even more visitors into the city. A good suggestion, if there were music entrepreneurs out there to take the commercial risk. Well done to the Spraoi organisers and many volunteers for their efforts.