Sunday, 27 February 2011

Who Needs Enemies When You Have ECB?

The ECB has no love for Ireland and is seeking to punish us. That's why we should tell it where to go...

When the new government settles into their new offices in the next few weeks, many many problems await them. None more so than Ireland's by now fractious relationship with Europe and in particular the European Central Bank (ECB).

In truth, Ireland's relationship with the ECB has become so dysfunctional that it now verges on abusive, and Ireland is the one being beaten, and beaten hard.

Jean Claude Trichet on his €344,000 plus a year salary and his cronies have no love for Ireland at the minute and despite all the talk of it lending us €150bn to keep our banks afloat, any sensible person would know that is out of its own self interest and not out of any great affection for our small little island.

The ECB's role in Ireland's financial crisis was by anybody's standard dubious at best, and criminal at worst.

During the boom years of 2004 to 2008, the ECB did nothing to stop the flood of cheap money into Ireland from German and French banks, did nothing to ensure our regulator was doing his job and failed to spot the mounting crisis in Irish banks throughout 2008.

Remember in the days before the colossal calamity that was the bank guarantee in September 2008 that it was none other than Trichet himself who rang rookie Finance Minister Brian Lenihan ordering him not to let any of the Irish banks fail -- a diktat which was to prove extraordinarily costly for the Irish taxpayer.

It was a move driven by a desire to protect the interest of the main banks in mainland Europe, at the expense of Ireland's best interests.

With a new government almost upon us, I sought last week to find out exactly what the sentiment toward Ireland is in Frankfurt. "Mention Ireland to a senior ECB figure, and he's likely to spit fire at you at the minute, such is the animosity toward us," was how a senior government source put it to me.

A few weeks back, senior ECB official Lorenzo Bini Smaghi gave a most revealing interview as to the lack of compassion for Ireland's plight within the bank.

"When there are people who say that the Irish taxpayers are suffering from the problems created by the banking system, I would remind that for many years the Irish taxpayers benefited from that system. You [the Irish people] should not complain if now you have to increase taxes as a result of the choice of economic model the Irish people made," he barked. This was in essence an Irish decision, he concluded.

While there is no doubting the criminality that went on in Irish banks, particularly at Anglo and Irish Nationwide, Smaghi's selective criticism is as hypocritical as it is self-serving.

He failed to mention anything about his bank's ineptitude during the boom in keeping an eye on what was happening, or to limit the flow of cheap money which led to our building bonanza.

But to fully appreciate where we stand, one must only look at the ECB's role in Ireland's seeking of external assistance last November.

Only days after the bailout deal was signed, former Justice Minister Dermot Ahern revealed how officials from the ECB had tried to force Ireland into seeking a bailout before it had even been discussed at Cabinet.

Mr Ahern said "quite incredible pressure" was being applied to the country ahead of the IMF/EU meetings and the same thing was also happening to Portugal. "There were people from outside this country who were trying to bounce us in, as a sovereign state, into making an application -- throwing in the towel -- before we had even considered it as a government," he said. Asked about who was pressuring Ireland, he said they were "quite obviously" people from the ECB.

We also know that the ECB, fed up with lending so much money to broken Irish banks, decided to pull the plug and began briefing against Ireland to European media in the week before the request was made. That cynical move sent our borrowing rate to record highs, forcing us out of the market and into the arms of the ECB/IMF deal.

We also now know that it was the ECB, not the EU or the IMF, that kiboshed any notion of burning the bondholders, for fear of contagion. Yet again, the Irish had to take another one on the chin for Europe. Worse still, it was the ECB who sought to profit so much off the back of the money it was lending to Ireland. It has to be said, with friends like the ECB, who needs enemies?

Furthermore, the intention of the ECB to increase interest rates between now and the end of 2012 to aid Germany will stymie fragile Irish growth even further. Enough is enough. We must stop looking at the ECB as something that is helping Ireland, but rather as something that has choked us, stifled us and is kicking us over and over again while we are down.

Looking ahead, when it comes to Ireland, the ECB has gotten itself into a tricky situation.

Trichet and his goons are in a real bind as to what to do. On the one hand, it is extremely unhappy about how much emergency funding it has had to pump into the Irish banks and wants its money back. On the other hand, like the IMF and the EU Commission, it realises that it is in everyone's interest for Ireland to get its house in order and crippling it with debt isn't working.

If Ireland is to get going again, Enda Kenny's new government must put an end to the systematic bullying by the ECB, which Lenihan, Cowen et al seemed unable or unwilling to do. We have €150bn of their money and we have a strong hand with which to go into any renegotiation.

The time has come for Ireland to stop being the whipping boy or test case for Europe. The time has come for the Irish government to put Ireland's national interest ahead of trying to be good Europeans. Only time will tell if Kenny and his Finance Minister in waiting, Michael Noonan, are up to the job. We'll wait and see.

Article by Daniel McConnell - Sunday Independent

Thursday, 24 February 2011

Boomtime Buyers...

Boomtime buyers bypassed apartments for a suburban semi...

IT's a snapshot of home ownership at the end of the property bubble and shows that, for most of us, only a house is a home.

New research shows that despite a raft of advertisements encouraging people to buy 'luxury' apartments in 'exclusive' developments during the boom, buyers instead chose the traditional semi-d in the suburbs.

The Eurostat housing report 2009, published yesterday, shows that Ireland has the lowest level of flat dwelling in the European Union.

Just 3.1pc of the population live in flats or apartments, compared to an EU average of 41.7pc. Given our population of 4.5 million people, it means that just under 140,000 people live in a flat. This is despite more than 130,000 being built between 2000 and 2009 during the property boom.

The most popular form of housing is a semi-detached or terrace house -- almost 58pc live in these homes, more than twice the EU average of 23pc.

Detached houses are also popular, with 39pc living in these -- compared with the average of 34pc.

Across the EU, flats are the most common form of accommodation in Latvia, most people in Slovenia live in a detached house while a semi-detached or terraced house is the most common house type in the Netherlands.

But the research, compiled by the Central Statistics Office on behalf of Eurostat, also shows that tens of thousands of people in Ireland are living in sub-standard accommodation.

Some 13.2pc live in a home affected by damp or a leaking roof, or almost 600,000 people. This is just below the EU average of 15.9pc, but compares well against 30.6pc in Slovenia.

Another 166,000 (3.7pc) say their home is overcrowded and too small for the numbers living in it, compared with the average of 17.8pc. The highest rate is in Hungary at 55pc. Some 252,000 (5.6pc) say that darkness is a problem, compared with the average of 7.3pc.


Some 13,500 (0.3pc) people have no indoor toilet, while 27,000 (0.6pc) lack a bath or shower.

This compares with a 3.5pc average for no toilet, and 3.1pc for no shower across the EU. The highest rates where these basic facilities are not provided is Romania, with 42.5pc and 41.2pc respectively.

Unfortunately for some, they will be forced to live in sub-standard rented accommodation for another two years while landlords make improvements.

The Department of the Environment introduced new standards for rented accommodation in February 2009, which required all homes to have a shower or bath, indoor toilet and be free of damp.

A spokesman last night said landlords had until February 2013 to make the necessary improvements.

"To allow sufficient time for landlords to make necessary improvements to their properties, a four-year phasing-in period to come into compliance with the sanitary requirements of the regulations was also provided for; this period expires on February 1, 2013."

Fines for non-compliant buildings are up to €5,000, and the fine for each day of a continuing offence is €400.

In 2007, just over 17,000 inspections of private rented accommodation were carried out by local authorities. Almost 2,900 dwellings did not meet the minimum requirements.

However, just 4pc, or 75 cases, referred to the Private Residential Tenancies Board in 2009 related to the standard and maintenance of homes.

Report by Paul Melia - Irish Independent

Sunday, 20 February 2011

Ireland's Crash...

Once among the richest people in Europe, the Irish have been laid low by a banking collapse and the euro zone’s debt crisis. What now?

“THERE’S a craze for land everywhere!” The line draws wry laughs from audiences in Dublin’s Olympia Theatre at a revival of “The Field”, John B. Keane’s play about a land dispute in south-west Ireland. Their country has been transformed since the play was first staged 45 years ago. But Mr Keane’s lines also belong to a more recent time in Irish history.

Consider St Michael’s Green, an abandoned half-built housing estate near the village of Lixnaw, in north Kerry. “Look at what’s coming soon to Lixnaw”, proclaims a sign at the entrance. Visitors who take up the offer are met with an apocalyptic sight. Four finished houses, complete with driveways, stand in line. Windows are broken; shards of glass are strewn on the ground. Peer (carefully) through the window-frames and you can see doors hanging from hinges and semi-carpeted floors. Opposite the houses, surrounded by metal fencing, some of it collapsed, are the exposed foundations of houses never built. Rubble and rubbish lie everywhere. With wind howling and rain lashing, it is easy to imagine that you are gazing on the ruins of a failed civilisation. And in a way you are.

Such “ghost estates” are only the most visible scars of Ireland’s extraordinary crash, which in four years has turned the country from Europe’s star performer into a sickly invalid. After a long history of poverty and unemployment, the Irish thought they had finally transformed their country into a successful modern state. Now they find themselves saddled with staggering debts and an international bail-out. Some wonder whether the country’s achievements in recent years counted for anything at all. How did this happen? And what comes next?

In the 1990s Ireland became the “Celtic Tiger”. Sensible policies and a benign global economy helped it catch up with European neighbours that for decades had left it languishing. Between 1993 and 2000 average annual GDP growth approached 10%. But then someone put speed in the tiger’s water. Over the last decade the boom turned bubbly, as low interest rates and reckless lending, abetted by dozy regulation, pushed up land values and caused Ireland to turn into a nation of property developers. In County Leitrim, in the Irish Midlands, housing construction outstripped demand (based on population growth) by 401% between 2006 and 2009, according to one estimate.

Few minded. The Irish became, by one measure, the second-richest people in the European Union. “The boom is getting boomier,” said Bertie Ahern, Ireland’s taoiseach (prime minister), in 2006. The government began exporting the Celtic Tiger model, telling other small countries that they, too, could enjoy double-digit growth rates if they followed Ireland’s lead. People splashed out on foreign holidays, new cars and expensive meals. “We behaved like a poor person who had won the lottery,” says Nikki Evans, a businesswoman.

Then it all began to go wrong. Property prices started sliding in 2006-07, leaving the banks hopelessly exposed. “What happened in Ireland was very boring,” says Morgan Kelly, an economist at University College, Dublin, and one of the few observers to have predicted the crash. “There were no complex derivatives or shadow banking systems. This was a good old 19th-century, or even 17th-century, banking collapse.” On September 15th 2008 Lehman Brothers tumbled, sending a giant tremor round the world. Two weeks later, with the share prices of Irish banks in free fall, the government took the fateful decision to guarantee liabilities worth €400 billion ($572 billion) at six financial institutions.

The costs of the rescue mounted as the banks’ losses grew, springing a giant hole in the public finances. The banking crisis had become a sovereign-debt crisis. International investors began to target Ireland as a weak link in the euro zone, raising its borrowing costs to unsustainable levels. In November 2010 it became the second country in the euro zone, after Greece, to accept a bail-out from the EU and the IMF.

“I can’t tell you how depressing it is here now,” says Anne Enright, a novelist. An austerity budget pushed through to meet the terms of the €85 billion bail-out is starting to hit pockets. Unemployment has shot up to 13.4%, wages have fallen and, after a peak-to-trough contraction of 14% of GDP, the economy is still flatlining. “It’s very demoralising that this thing has happened when we thought we had arrived at a modern industrialised society,” says David Begg, general secretary of the Irish Congress of Trade Unions.

The myths of success

Not everyone welcomed the changes that prosperity brought. Kevin Barry, a writer who had been living abroad, returned home to find that “people only spoke about two things: property prices and commuting times. It was extremely boring.” Ms Evans, who runs PerfectCard, a pre-paid debit-card business, saw some of her younger staff acquire a sense of entitlement which made them hard to motivate. (It’s easier now, she says.)

As Ireland grew richer, one form of exceptionalism—the fatalistic belief that Ireland was destined always to be western Europe’s poor outpost—gave way to another: the myth of the Celtic Tiger. “We’re very narcissistic,” says Ms Enright. “We believed our boom was better than anyone else’s.” The twin articles of independent Ireland’s faith, Catholicism and nationalism, were eclipsed by material ambition: the desire to get on, to improve one’s station in life. “People lost interest in the other world while they were so successful in this one,” says Mark Patrick Hederman, abbot of Glenstal Abbey, near Limerick.

The new Ireland looked attractive to outsiders. When the country opened itself to new EU members after the 2004 eastward expansion, Poles and others poured in looking for work... Rather than resenting the newcomers, many Irish were proud that their country had become a place people wanted to enter rather than leave. “The country was welcoming, open, easy-going,” says Monika Sapielak, a Pole who began to visit in 2001 and who now runs a contemporary-arts centre in Dublin. “There was a sense that anything was possible.” Not any more.

Many people see the economic crisis as a chance to jettison the baggage of excess that marked the later Tiger years. The first casualty will be Fianna Fail, the party that presided over the “boomier” years and, in coalition with the Greens, the subsequent crash. In a general election on February 25th, voters will boot the party out; the polls suggest it could fall to third place, behind Fine Gael and the Labour Party.

This alone is a big story. Fianna Fail is the “natural” party of government in Ireland: it has been in power for three out of every four years since winning a landslide victory in 1932, and it has been the biggest party in parliament ever since. Yet it is hard to detect a whiff of revolution. The next government will almost certainly be led by Fine Gael (probably in coalition with Labour), a party with a centre-right platform not obviously distinct from Fianna Fail’s. (In Ireland’s peculiar politics, the difference between the two main parties dates from the 1922 civil war, fought over the terms of independence from the British.) Few believe the party would have been a more responsible steward of the Celtic Tiger. Enda Kenny, its leader and probably the next taoiseach, is no more setting Irish hearts alight in this campaign than in his 36 years in parliament. A telling sign of the mood is that although 95% of voters say they are unhappy with the government, 16% of them plan to vote for it.

At this tumultuous time for Europe—deadly riots in bailed-out Greece, hundreds of thousands marching over pension reform in France, a general strike in Spain—Ireland’s collapse may be the worst trauma of all. But apart from a union-led demonstration in Dublin in November, there have been few outward signs of rage. Why do the Irish seem so quiescent?

As a small country, Ireland is a hard place to hide in. Reports abound of disgraced bankers being hounded out of pubs by burned investors, or Fianna Fail candidates having dogs set on them. “There aren’t that many strangers in Ireland,” says Ruairi Quinn, a Labour frontbencher. This, some say, acts as a safety valve, allowing citizens to vent their anger directly rather than take to the streets.

But it also lends Irish politics an oddly intimate flavour. National candidates tout achievements that in other countries would be considered the domain of local councillors. This goes along with a proportional voting system that forces candidates of the same party to compete for votes, turning elections into intensely personal contests. “If you’re not seen to be helping your constituents, you will not be re-elected,” says Martin Ferris, Sinn Fein TD (member of parliament) for Kerry North.

During a windy canvassing session in a middle-class area of Tralee, County Kerry’s largest town, many voters say they will back Mr Ferris because they remember how, seven years ago, he worked to improve access to local footpaths and tackle anti-social behaviour. Not one mentions his party’s policies. You would expect this lot to be Fine Gael supporters, says a party worker, who appears to know them all personally. But Mr Ferris has won them round. She herself began canvassing for him because of his community work.

A TD working the campaign trail looks like democracy in action. But there are problems. Ambitious types do not want to spend their careers promising to fill in potholes and deliver passports, so they avoid politics. Moreover, the endless focus on local issues distracts from the business of running the country. “Politicians say, ‘Elect me and I’ll get you a swimming pool.’ You’ll get your pool, but there won’t be any money to run it,” says Damian Loscher of Ipsos MRBI, a market-research agency.

The radical transformation of Ireland into a globalised economy left some old attitudes untouched. Voters continued to tolerate levels of misbehaviour and, in some cases, outright corruption in their politicians that in other countries would have ended careers. Cronyism flourished, as businessmen, politicians and bankers sealed themselves off in a cosy world of golf matches, fine dining and the Fianna Fail tent at the Galway races. “It felt like an old boys’ club,” says Ms Evans—who had to use personal contacts, too, to get the government’s attention.

Fond, but not in love

When the EU and IMF delegations arrived in Dublin for bail-out talks last November, the Irish Times ran a lachrymose editorial asking if this was what the national heroes of the 1916 Easter Rising had died for. Outsiders saw this as a sign of resentment from a proud nation that was once again having its affairs run by foreigners. Yet the editorial went on: “The true ignominy…is that we ourselves have squandered [our sovereignty].” Having seen their leaders make such a mess of things, most Irish welcome the arrival of technocrats.

Still, one long-term effect of this crisis may be a cooling of Ireland’s love affair with the EU. When the country joined what was then the European Economic Community in 1973, children danced in the streets. Agricultural subsidies and infrastructure funding flooded in from Brussels. Equal membership in a club of nations was a seal of sovereignty. Ireland remains more positive about the EU than most other members. But the Irish have begun to suspect that the “solidarity” they hear so much about from European leaders does not apply to their troubled economy.

The terms of the European element of the bail-out arouse particular ire. There is something approaching a consensus in Ireland that the country rescued Europe (specifically, German and French investors that had lent heavily to Irish banks) last November, rather than the other way around. There have been heated exchanges between Irish and EU politicians over how to apportion the blame for Ireland’s crash. Some compare Ireland’s bank guarantee unfavourably with Iceland’s decision, after a similar meltdown in October 2008, to let the banks go to the wall, creditors be damned. Eyeing an opportunity, the parties that are likely to form the next Irish government have made extravagant campaign promises about renegotiating the bail-out package. They may find it difficult to keep them once in office.

Ireland is not about to adopt the Euroscepticism of its larger neighbour, Britain. But it is bound to become more pragmatic. The new government will, for example, fight hard for permission to impose bank losses on creditors not covered by the 2008 guarantee (something the European Central Bank rejected during the bail-out negotiations). “The attitude has shifted from ‘We want to be part of Europe’ to ‘We need to be part of Europe’,” says Mr Loscher.

One fear is that a growing number of young people will not be part of Europe at all. Lack of prospects will drive them to America, Canada or Australia. For at least 150 years, emigration has been the instinctive Irish response to hardship. Alan Barrett of the Economic and Social Research Institute (ESRI), a Dublin-based research body, says emigration is to the Irish what inflation is to the Germans: a trauma formed by economic wounds inflicted decades ago that still runs deep in the collective memory. The generation that came of age in the Celtic Tiger years was the first that did not feel it had to move abroad to thrive. But for now, those days are over.

A recent report by the ESRI, based on employment forecasts, estimates that a net 100,000 people will leave Ireland between April 2010 and April 2012. That is a lot: at its peak, the net annual outflow in the 1980s was 44,000. Evidence of the exodus is already emerging. Work-placement and visa-assistance companies are advertising widely. Election candidates report that emigration is a big issue on the doorstep.

Still, many argue that a population willing to move to where the jobs are is exactly what a country in Ireland’s predicament needs. Historically, labour mobility has helped to keep a lid on unemployment. And there have been other benefits: the diaspora, particularly in the United States, has proved a useful asset for Ireland, politically as well as economically. Moreover, a move abroad today is hardly the one-way ticket it was for many in the 19th century. When Ireland started to boom in the 1990s many émigrés returned home, bringing with them much-needed skills and capital.

But such arguments will ring largely hollow in a country where emigration is so strongly linked to feelings of national shame. “You can talk about the collapse in GNP,” says Mr Barrett, “but the emotional touchstone of emigration is a major issue. That’s why there is a great sense of regret.”

Tiger no more

In five years’ time Ireland will mark the 100th anniversary of the Easter Rising. The country will ask itself how far it has satisfied the hopes of those who fought for its independence. Some fear that the crash has shown the Celtic Tiger to have been a phantom, an illusionist’s trick that distracted Ireland from its underlying poverty with glitzy cars and big houses.

It is true that Ireland will not soon pull itself from the economic bog. Recovery will be slow at best, particularly if an inflation-wary ECB starts to jack up interest rates. Unemployment is likely to stay in double figures for some time. Some fear that the cost of servicing the debts to the EU and IMF, and of feeding the insatiable maw of the banks, will eventually force Ireland into a debt restructuring. This would be a terrible blow to a country desperate to believe that the worst is over.

Yet Ireland is not about to return to the dark days of the 1980s. Numerically, the recession has sent living standards back only to the levels of around 2002 ... The flexible economy will remain attractive to multinationals seeking a toehold in Europe, especially if it keeps its low corporate-tax rate. Domestic demand is still depressed—a big concern. But unlike other troubled euro-zone countries, Ireland is regaining competitiveness by reducing unit labour costs. Exports are booming, and there should be a current-account surplus this year for the first time in over a decade. The demographic outlook is favourable. “There are no brakes to growth if we can get this thing going,” says Danny McCoy, head of the Irish Business and Employers Confederation.

At least as important, despite the fog of gloom sitting over the country, Ireland has much to be proud of. Not all the gains of the Celtic Tiger years were squandered. An optimistic, entrepreneurial spirit emerged that will not be crushed by a few years of recession. Higher education has expanded dramatically—30% of Irish students are the first in their family to attend university—as has the labour force. A generation has grown up knowing nothing but prosperity. This accumulation of expectation and experience makes Ireland a very different country from the weary, fearful place of the mid-1980s.

Perhaps the most hopeful future for Ireland lies in becoming, for the first time, an ordinary small European country, with a properly functioning democratic system and a stable, diversified economy. But first it must begin to see itself with sober eyes. Kevin Gardiner of Barclays Wealth, who coined the phrase “Celtic Tiger” in 1994, says that Celts have a nasty habit of extrapolating both good and bad times for ever (as a Welshman, he dares to make such generalisations). Just as the Irish suffered a bad bout of irrational exuberance in the boom years, they have now been overcome by excessive pessimism. Or, as Ms Enright puts it, “Ireland is a series of stories it tells itself. None of them are true.”

Report - The Economist.

Saturday, 19 February 2011

Goodbye, My Ireland

You can see them every day at Dublin’s International Airport. Couples locked in teary embraces, damp-eyed mums and dads farewelling sons and daughters. Friends promising to stay in touch.

1000 people are leaving each week, heading to the four corners of the world in search of work and a better life. Many, like electrician Alan Niland and chef Sean Sherry are going to Australia.

“Leaving here is a big thing and everyone doesn’t want to go. It’s a last resort really.” ALAN NILAND Irish Electrician

Alan‘s heading to Melbourne and the promise of a job with an Irish electrician. Sean Sherry has been unemployed for the first time in a 25 year career and his fruitless job search has dragged on for 12 months. He now has no choice but to leave his girlfriend and her daughter and take up a job offer on a cruise ship operating from Australia. He has to work to service the mortgage on a house that has crashed in value.

“I was driving home one day and I just had a panic attack. What will I do? (I was) on the motorway. I had to pull in. I was just panicking: ‘what will I do?’ My God, I can’t get a job.” SEAN SHERRY Irish Chef

Sean and Alan are the human faces of a savagely battered economy. Ireland flew fast and high on the back of easy money and a contrived real estate boom. When the GFC hit, highly leveraged economies like Iceland, Greece and Ireland were disasters waiting to happen.

“We went from being a country with a banking system to a banking system with a country stuck onto it because the banks became three times bigger than the gross national product of the country” DAVID McWILLIAMS Economist

As Ireland prepares to go to the polls looking to punish politicians complicit in the economic failure and hoping for a government that can lead them out of the mess, reporter Emma Alberici examines the harrowing human experiences surrounding Ireland’s Generation Exit.

“All our young people are going. It’s not only the immigrants that have come into the country and gone home. It’s all our young people, all our own are going.” RITA NILAND Alan Niland’s mum.

Report by Emma Alberici - ABC.

Thursday, 17 February 2011

Emigration To Hit Quater Of Dublin Households...

Emigration set to hit one-in-four city households...

POLL: Quarter of young people want to leave.

MORE than one in four Dublin households will experience emigration within the next 12 months.

The scourge of forced emigration has yet to peak, a new poll of over 1,000 people has found.

A major brain-drain is on the horizon as 23pc of young people aged 18-24 say that they intend to leave Ireland by early 2012.

An analysis of the Millward Brown Lansdowne poll for the Herald shows that the exodus will include tradesmen, college graduates and other newly unemployed young people.

Almost one in ten (9pc) people interviewed said they personally intend to emigrate within the year.

And 20pc said another member of their household planned to move away to places like Australia, Canada or the US.

More men than woman are ready to move overseas but those leaving are spread across all social classes.

Around one in six are unemployed while one in eight are self-employed. The poll found that a slight majority of those preparing to emigrate are from the southside of the city.

Emigration has repeatedly been highlighted during the election campaign will all parties promising initiatives to stop the outflow.

But it appears that it may be too late for tens of thousands of people who are on the verge of leaving Ireland.

The exodus is not confined to teens or those in the early 20s, as the poll found that 16pc of Dubliners aged in the 25-34 category also intend to emigrate.

The figures drop substantially in the older age groups with just 4pc of 35-49 year olds intending to leave.

Another 2pc of over 65s currently living in Dublin will spend their retirement outside the country. Such is the number of Irish emigrants already abroad that an online ballot has been set-up for people to engage with the election. is an online poll for ex-pats who want to vote but are prevented from doing so by Irish law. It will publish the results on February 23.

With just nine days to go until the election the main parties are all vying for the support of those who feel they will have to leave the country.

As part of its campaign Fine Gael is promising to create opportunities at home. Their proposals include 23,000 new internships for unemployed graduates; 5,000 Community Employment places and 700 work placements for apprentices.

Report by Kevin Doyle - Evening Herald.

Wednesday, 16 February 2011

Bank Rate Rises Risk Increase In Homeless...

BANKS RISK making people homeless and adding further vacant houses to an already struggling property market if they raise mortgage interest rates too much, Minister of State for Housing Michael Finneran has warned.

He has urged a new government to use its influence with the banks to ensure families do not lose their homes as a result of aggressive interest rate increases.

“I am appealing to the banks . . . It would be a terrible, unfortunate thing that we have vacant properties all around this country and we created more vacant properties because people were not able to make repayments. That would be a scandal, and should not be allowed,” said Mr Finneran yesterday at the launch of a new service for homeless people.

He said many families were now at the “pin of their collar” and there was a certain level at which they would not be able to make repayments on their homes.

He said the number of family homes repossessed in the recession was still very low due to the leniency of the courts and action already taken by the Government. But he warned noises from the ECB about future interest rate increases and recent rises by Irish lenders were a cause of concern.

Last week Permanent TSB introduced immediate increases of between 2 and 3 per cent on its fixed interest rates. Most banks have also increased variable interest rates over the past year.

Mr Finneran said the banks face commercial pressures caused by a gap between the rates they are charged to raise money and the rates they charge customers. He said the Government could intervene to protect homeowners.

“Is the State capable? Does it have the resources itself to bridge the [funding] gap? I think this is one area that should get a priority,” he said.

Mr Finneran urged a new government to continue, modify and vary the recommendations of the expert group on mortgage arrears and personal debt, which he oversaw, to suit the conditions.

More than 600 orders for possession, which allow a lender to repossess property when a borrower falls behind with mortgage repayments, were granted in the courts last year.

At the launch of a new Dublin outreach service for homeless people, Focus Ireland chief executive Joyce Loughnan said its services were seeing a lot more people presenting with mortgage arrears.

She said Focus Ireland provided advice aimed at helping people to hold on to their homes and link in to entitlements. She said it was the Government’s call on how to deal with the problem of home repossession.

“They have put all this investment into the banks and that is all public money. The public now has to get some return from that. There has to be a social benefit . . . It’s much cheaper for the Government to subsidise someone keeping their home than have someone falling into homelessness,” said Ms Loughnan.

Mr Finneran, who is not standing in the election, said he was disappointed the Government had not achieved its target of eliminating long-term homelessness by the end of 2010. He said it should be possible for an incoming government to find suitable housing for the 400 long-term homeless within six months due to the new structures in place.

Report by JAMIE SMYTH - Irish Times

Tuesday, 15 February 2011

NI House Prices Fall By 7.7%...

Average house prices in Northern Ireland fell by almost 8 per cent last year.

The average cost of a house was £149,795 (€178,000), according to a University of Ulster (UU) survey. The number of sales also fell.

Cold weather affected activity around Christmas although the market showed signs of stabilising towards the end of the year.

One of the UU survey authors, Professor Alastair Adair, said: “The second half of 2010 has been a difficult period for the housing market in Northern Ireland, contrasting with the tentative signs of recovery in the first half of the year.

“It seems that the prospects for the UK economy, local fears of public sector cuts and possible contagion effects from the Irish economy may have dented confidence in the local market and that the severe weather conditions may have impacted on sales volumes in the final quarter.”

A total of 110 estate agents were surveyed about activity late last year for the UU, Bank of Ireland and Housing Executive Quarterly House Price Index. Average prices fell by 7.7 per cent last year but showed signs of stabilising in the final quarter.

The report said lower prices and reduced sales suggested the housing market continued to lack momentum, a sentiment supported by anecdotal evidence from estate agents throughout Northern Ireland.

However, several agents in the Belfast area and east of Northern Ireland expressed greater confidence in the quarter suggesting a regional variation supported by the quarterly price movement.

Alan Bridle, UK economist at Bank of Ireland, said: “This survey confirms that 2010 was not a year of housing recovery in Northern Ireland and the market faces into further headwinds in the next 12 months, both on the demand and supply sides - household incomes are falling in real terms and interest rates are likely to rise while, in reality, funding and regulatory pressures across the UK market will mean little change in the pattern of mortgage activity in the short-term.

Overall, 2011 may be the year when the local market bottoms out.“

Report - Irish Times

Monday, 14 February 2011

Grinding Despair Of Negative Equity...

Grinding despair of negative-equity generation hangs over all our lives...

All truth passes through three stages.
First it is ridiculed.
Second, it is violently opposed.
Third, it is accepted as being self-evident.

Arthur Schopenhauer

Ireland, 2031. A teenager and his teacher are walking out of an economics class. "My God, what lunacy," says the teen. "I can't believe that the banks were allowed to behave like that."

"I know," answers his lecturer. "Imagine, they were able to sell full-recourse mortgages to naive first-time buyers, often way over 100 per cent, without any risk to themselves whatsoever. No wonder they all went mad and pushed money on any poor sod they could."

"And then when the crash came, all the big property borrowers and the banks were protected by the Government via Nama and the bank guarantee, while all the small homeowners were screwed?"

"Correct, son."

"That's not capitalism, that's extortion," says the teen. (He knows his Adam Smith, does this lad.)

"And even while billions of taxpayers' money was being used to pay off unsecured British, French and German bonds, the Government and

banks still refused to help any of the small struggling homeowners break out of a life-time debt sentence."

The teen scratches his head. He studies ethics as well as economics, you see.

"That doesn't make sense. Ireland was a democracy -- surely the people refused to put up with that?"

"Ah, yes," answers the lecturer. "The ultimate conundrum. Why were the people so

docile? But remember, even though it became obvious later that the banks and the regulator had seriously misled the public, the Government was also in on the whole swindle -- it was making a fortune from all that property swopping.

"The massive amounts of cash the Government pulled in through stamp duty alone was keeping it -- and all the crony friends it placed in myriad State quangos -- in perks and pensions that they would demand to be paid for the rest of their lives."

"Thank God they eventually saw sense, reduced stamp duty and banned recourse mortgages," says the teen.

"Yes, they did -- eventually -- but not before hundreds of thousands of people's lives were ruined by rising interest rates, falling wages and the curse of negative equity."

"And the bankers, regulator and politicians who allowed this to happen -- what happened to them?"

"Eventually, some of them were charged with economic treason and either fined or jailed. But most of them -- along with the property developers that they supported -- fled to the US or Australia. The present government is still trying to extradite some of them."

"Mad," says the teen, unable to envisage a cowboy country that allowed such injustice to occur.

"Totally mad," agrees his lecturer.

Unfortunately, we are still a paradigm shift away from the time the above conversation takes place. But it will eventually occur. Non-recourse mortgages will be self-evidently the fairest way to go -- as happens already in many other countries. It's already started.

Bank of Scotland has admitted that it has agreed to write off some of the debts of some of its mortgage holders -- it is reducing capital owed by people in negative equity.

But Irish banks haven't followed suit, with one mortgage expert being quoted as saying that our banks "do not have the capital to make the kind of decisions Bank of Scotland has made".

I wonder how long the banks' head-in-the-sand attitude will last?

Last week Permanent TSB increased its mortgage rate by a full one per cent, while EBS pushed its rate up by 0.6 per cent. It's expected that most of the other banks will follow them in due course. Cue even more households around the country finding themselves in a position where they cannot pay their mortgage or sell their house, and rent instead.

Last week Fine Gael announced an interesting proposal geared to help the "negative equity generation", where it proposed to give increased mortgage interest relief to first-time buyers who bought between 2004 and 2009.

The proposal has some flaws -- not least of which is that it may assist people who are not in need -- but at least it recognises the elephant in the room that is negative equity combined with rising interest rates and falling wages.

"Debt forgiveness", "co-responsibility", "burden-sharing", or whatever you want to call it, basically means banks doing deals with impoverished homeowners in negative equity. But the mere mention of it seems to raise the hackles of the most compassionate of social democrats. Why is this?

Moral hazard?

Oh, please. As Stephen Kinsella, David McWilliams and other independent economists have repeatedly explained, moral hazard is only relevant when individuals do not suffer the consequences of their actions. This may apply to the banks -- which drove the boom relentlessly despite being far more aware of the potential for it all to fall down than many of their hapless customers -- but it does not apply to the ordinary Joe and Josephine Murphy who worked and saved and eventually were able to buy their own home.

Sadly for them, it occurred in the middle of a bank/government/regulator-induced property bubble that was then followed by a chronic recession, fuelled by the need to pay off the banks' debts.

These people weren't landowners or investors or property gamblers. They didn't follow the stock market or know what a 'property portfolio' was. They just did what all Irish people did before them. And they trusted the experts.

But now the Jo Murphys of this country are in serious distress. In fact, most of them are terrified.

Not just that they will lose their home -- that seems like a preferable outcome -- but that they are being forced by the banks to stay in a home they can't afford and can't sell.

They've already gone through all their savings and anything they could borrow from family and friends. Means test them if you want to, satisfy yourselves that they haven't a pot of gold or a half loaf of bread stashed away somewhere (the Department of Social Protection should manage that easily enough). But don't condescendingly tell them to sit it out with a bowl of gruel and a tallow candle until property prices rise again: that ain't going to happen anytime soon -- nor should we want it to if we are to improve our competitiveness and kick-start the economy.

And yet the critics of co-responsibility are piously concerned that if these people are allowed hand the keys of their homes to the banks, they will go straight out and get themselves right back in the same hole again.

Not only is this bad logic, it's bad economics.

"Why should Jo Murphy get help when he/she was stupid enough to buy during a bubble?" is what we hear on the street and the airwaves, time and time again.

Why? Because if Jo doesn't get help, an entire generation will be poverty stricken and the economy/society will go completely under.

The markets are looking at this country and suspect that if the Government doesn't do something to address the situation, there will soon be massive defaults on home mortgages. Small wonder they aren't investing.

And, ultimately, if you drive a generation to despair, if you leave them with no help, no hope, no reason to dream for their future and the future of their children, yet still demand every penny they earn to give to foreign bondholders, they will explode.

Co-responsibility begins at home. We must accept this self-evident truth -- before it's too late.

Report by Carol Hunt - Sunday Independent

Friday, 11 February 2011

For Sale: Post Bubble Rubble...

For sale: the post-bubble rubble. €4,000 or nearest offer...

SMALL PRINT: ON TUESDAY, an intriguing notice appeared in the small ads section on the back page of this newspaper. It read: “Arch for sale. This arch was built by artist Emma Houlihan. It was part of a Nama-related art project and built from the reconstituted rubble of a destroyed Leitrim house. Custom built. Perfect for gardens and spaces. Can function as a sculpture or a functional object.”

There was a number listed to call, for queries about “cost and shipping”.

Emma Houlihan was in Stockholm this week, where a number of interested parties had already called her number, although no solid offers of purchase had so far been made. What is this “arch” she is selling?

“It’s a project I undertook while artist-in-residence for the Leitrim Sculpture Centre last summer,” she says. “It struck me that Leitrim was the ghost estate capital of Ireland, and I wanted to make a piece of art connected with that fact. I was mostly interested in rubble and what could be done with it.”

Houlihan’s budget for a project was €4,500. She had originally hoped to persuade a developer to allow her to demolish an entire ghost estate, and then to move the rubble to Leitrim Sculpture Centre “as a monument to over-development”. This didn’t happen, due to the fact that many such properties in Leitrim are now owned by Nama – which is where the inaccurate reference to that agency in the ad comes from. She did contact Nama, but they did not respond to any of her queries.

“I put an ad in the paper saying I had money to knock down a house in Leitrim,” she says, “but nobody responded”.

In the end, she negotiated with a property developer in Leitrim who had already demolished a house on land he owned, with the intention of then building a new housing estate on it. Once the “economy tanked”, Hamilton says, he did not go ahead with building the estate.

The erstwhile developer gave Hamilton the rubble for free, and she then spent some of her budget casting pieces of it in concrete blocks. “I liked the idea of getting something for free and turning it into art.” In all, there are nine different pieces, which, when assembled, make an eight foot wide archway.

“Right now, it’s in Leitrim on a pallet. The cost is open to negotiation,” she says. “It’d start at €4,000, and I would like it to stay in Leitrim if possible, so that it is being returned to the landscape close to where it came from.” As of yet, there have been no offers.

Report by ROSITA BOLAND - Irish Times

Thursday, 10 February 2011

Sun Sets For Holiday Homeowners...

Thousands of Irish people who bought homes abroad, for their holidays or as a pension, are selling up – if they can

UP TO HALF or more of the Irish people who bought properties abroad during the Celtic Tiger years may now be trying to sell them, according to estimates by estate agents. Their success or failure – and whether they sell at a loss – depends on where they bought and when.

“Of the 250 Irish people who bought properties through us between 2003 and 2008 along the Promenade des Anglais in Nice, between 50 per cent and 60 per cent are now selling them or have sold them,” according to Kirkor Ajderhanyan, director of Agence 107 Promenade, an agency which specialises in selling properties with sea views on Nice’s seafront.

“There were so many of them that we used to call it the Promenade des Irlandais at the time. But most will make an average gain of 25 to 30 per cent,” he claims.

On the other hand, Irish agent Hilary Larkin, who sells properties in nearby Cannes, says that local agents ask “Is this another of your Irish sellers in distress?” when she shares properties for sale with them. “I often have to advise sellers to drop their prices to get a sale.”

France is far from being the most distressed country for the Irish. Along with Spain, it was the most popular destination for holiday homes abroad. But the Spanish property boom, like ours, ended in tears with massive oversupply; prices are down since 2006 by around 25 per cent on the Costa de Sol.

Raquel Perez of Perez Legal Group in Marbella advised 4,000 English and Irish clients in noughties. Many, she says, bought two or three apartments off plans, one for keeping, the others for selling on on completion.

But many never were built and she says that only 5 per cent of those wanting to sell have been able to do so.

In Portugal, a popular destination for the wealthier Irish since the 1970s, a lot of properties are quietly on the market, but surprisingly few given that it was the playground for Irish property developers for many years.

Kerstin Buechner Dias of Quinta Properties, which handles most of the sales on Denis O’Brien-owned golf resort Quinta do Lobo on the Algarve, says that since the downturn, only five or six of 1,500 property owners (not including a major Irish developer whose business is in trouble here) on the manicured development have made serious attempts to sell – and three of them were Irish.

Prices have fallen, but still range from €300,000 for a two-bed apartment up to €10 million-€12 million for a large villa. And Irish buyers are definitely gone from the market, when up to two or three years ago, a good 30 per cent to 40 per cent were Irish, says Kirstin.

Liam Bailey of Knight Frank says that there was a degree of panic selling by British and Irish overseas homeowners in 2008, after the downturn, but does not expect to see this in 2011: “most people are positive about the medium to long-term, even though prices have fallen by a net 10 per cent in France, 10 per cent in Portugal, 6 per cent in Italy since a 2007 peak”.

In Spain, where prices still have further to fall, holiday homeowners have to decide whether they should get out, even at a loss, or hold on for the long-term. As Bailey points out, it costs money to sell because of taxes, agents’ fees etcetera.

This of course is the question facing many people who bought abroad in a frenzied decade that saw thousands of Irish people buying from France to Florida, Spain to South Africa, Canada to Cape Verde, Turkey to the UK to Hungary to Bulgaria.

Many bought properties for family holidays, others as a pension, with the benefit of it being an occasional holiday home. Some needed rental income to cover a mortgage, others didn’t.

Some raised mortages against the then high value of their Irish homes; others raised the money abroad against the value of the property purchased. Many are happy with their purchase and are holding onto it while they still have a job at home. Others are selling or want to “because they’re afraid of what may happen to them in Ireland” says Hilary Larkin of Hilary Larkin Properties.

Some desperately need to sell, although rarely admit it. And others have the agonizing choice of deciding whether to throw good money after bad when things go badly wrong – many Irish investors got stung when agents and developers went into receivership, failed to complete or simply disappeared with deposit money.

One woman who bought two apartments in Cannes for €99,000 has recently had to sell one for €70,000; another buyer is more than happy with his purchase there but has put his two-bed in Mougins, 8km down the road, up for sale simply because it’s too far out of town. He believes that long-term, his Cannes studio will be the pension he bought it for.

Another investor who paid €600,000 for a villa in Spain with a pool seven years ago would like to sell – but her property has halved in value. She can’t get short-term rentals, so rents it long-term at €550 a month, which just about covers management fees and other charges. Meanwhile a woman who bought a five-bed house with a pool near Cape Town eight years ago – when many people would have thought it riskier than buying in Spain – is getting €3,000 a month in rent. And capital appreciation has been around 10 per cent.

Anthony Joyce, a solicitor who has acted for buyers whose investments in places like India and Dubai went sour, says “A lot of people went to overseas property exhibitions, paid deposits, transferred money offshore.” He can help people only if some part of their contract was created in Ireland.

How many bought overseas? The only official figures are those from the Revenue Commissioners, which says it has details on over 27,000 properties owned by Irish individuals abroad.

Its main interest is in people using undeclared income to buy foreign properties. (It gets its information from foreign tax administrations, foreign land registries, foreign bank accounts, ads and websites.)

One thing is certain: very few people are buying overseas any more and most of the agencies which sold foreign properties have disappeared.

It’s hard to believe that about 25 per cent of the residential business of an agency like Savills (when it was still HOK) was selling properties abroad. Do those buyers now look for help in selling? Yes, says Savills’ Ronan O’Driscoll, but his agency can only direct people to local agents. Where did people do well, does he think?

“You could sell an apartment in Toronto quickly, at a profit; many people are happy with their Turkish holiday homes; you can get rentals in Hungary even though prices have fallen; even in Spain, people should hang on if they can – the market will eventually turn. But countries that spell trouble include Bulgaria, India and Dubai.”

Report by FRANCES O ROURKE - Irish Times

See Property For Sale in the South of France

Tuesday, 8 February 2011

Repossessions Crisis To Deepen...

Repossessions at all-time high but crisis to deepen...

REPOSSESSION orders granted by the courts have risen almost six-fold since the peak of the property boom.

Figures released by the Courts Service show that the number of orders granted by the High Court and Circuit Courts for the repossession of lands and premises were at their highest last year, a figure that is set to rise as lenders increase their interest rates.

Some 70,000 homeowners are struggling to pay their mortgages, according to Central Bank figures, including up of 40,000 people who have not made a payment for three months or more, and 30,000 who are making interest-only payments.

The 70,000 figure includes around 12,000 homeowners who have not made any payments for a year or more.

The vast majority of repossession orders granted in the courts are for residential properties, with some 263 of the 306 properties seized by the banks in the Circuit Court last year granted on foot of defaults on home loans.

Although subprime lenders such as Start Mortgages have so far dominated High Court repossession actions, taking up some half of all cases, mainstream lenders such as Bank of Ireland, AIB, Irish Nationwide and EBS are now highly active in both the superior courts.

Yesterday at the High Court more repossession orders were granted to prime lenders than to subprime finance companies.

Some 13 lands and properties were possessed and most related to non-residential and buy-to-let investments.

The vast majority of cases are being adjourned by lenders to facilitate negotiations with borrowers, but High Court judge Mr Justice Brian McGovern has also warned that leniency will not be shown towards borrowers who use the court process to avoid their indebtedness.


Last night Paul Joyce, senior policy researcher on consumer credit law for the Free legal Advice Centres (FLAC), warned that the number of people losing their homes would continue to increase.

This is despite new mortgage arrears measures, introduced last December by the Central Bank, designed to lessen the burden on cash-strapped families under threat of eviction from their homes.

"The rise in possession actions underscores the need for a non-judicial, national debt settlement office" said Mr Joyce, who added that the EU/IMF deal had set a March 2012 deadline for a new law to create an out-of-court system to deal with personal debt.

"We cannot wait that long," said Mr Joyce.

Economist Morgan Kelly has warned that the gathering mortgage crisis puts Ireland "on the cusp of a social conflict on the scale of the Land War".

Report by Dearbhail McDonald - Irish Independent

Sunday, 6 February 2011

Photographer Brings Emigrants Into Focus...

WHEN he first began his photographic project documenting the departure of young emigrants in early 2010, David Monahan had no way of knowing a mass exodus was about to take place.

But with more than 65,000 emigrating from here last year alone, Mr Monahan’s project, Leaving Dublin, is tapping into the mood of a generation.

The Dublin photographer first got the idea when talking to a young couple in their 20s — he was an electrician, she a beautician, and both have been out of work for a long time — who were leaving for Australia. From that one conversation, David decided to begin a series of shots which document emigration in modern Ireland.

He advertised to photograph people of all nationalities, who had made the decision to move from Ireland for economic reasons.

The pictures, which can be seen on, are not just random images, but highly stylised and conceptualised shots which will form a series which Monahan hopes to display in a public arena which the project is completed.

Shot at night in and around Dublin city, Mr Monahan juxtaposes his subjects with landscapes that are significant to their pasts.

But what is it about the poignant almost moody images that draws people to become subjects in his project?

"It marks their passing from one life to another, it is something to mark a decision that will have far reaching effect into their future," he said. "I think people buy into the idea that it shows the sadness but also the strength and tenacity of what these people are doing.

"It clearly resonates with people across generations too.

"I had a call from a woman from New York state who had emigrated 50 years ago and she completely got what I am trying to do."The photographer uses the device of the battered old suitcase from the 1960s which brings an historical element into the picture. That signifies this is not the first time an Irish generation has had to leave. My own parents did. The suitcase is about a visual metaphor as well as a simple prop to help composition."

So far Mr Monahan has photographed 25 people, but with interest growing and media coverage — including a slot on CBS — helping things along, he has "quite a few" to do over the next week.

When he has enough material, Mr Monahan plans to enlarge the prints and display them in one the cities to which our young people are moving.

Report by Jennifer Hough - Irish Examiner