Skip to main content

Momentous Year From Bad To Worse...

A momentous year which went from bad to worse...

Siobhan Creaton uses the alphabet to summarise the main events of what proved to be a tumultuous year for Ireland

A The nightmare that is Anglo Irish Bank continued in 2010 when its staggering €35bn of bad loans finally bankrupted the country. Some of the bank's top brass were arrested and questioned by gardai, and the Director for Public Prosecutions will decide next year whether they will face charges for their recklessness.

Sean FitzPatrick did suffer the humiliation of being made bankrupt while his protege David Drumm filed for bankruptcy in the US where he may fare better in the long run.

For many months politicians dithered and differed over how to solve the Anglo problem before finally agreeing to wind it down. So in 2011 Anglo Irish Bank will disappear forever but Irish taxpayers will be paying for its failure for many years to come.

B 2010 will go down in history as the year when Ireland agreed to take an €85bn bailout from the International Monetary Fund, the European Union and the British and Swedish governments.

Due to the scale of Ireland's crippling bank debts, the Government's finances will be closely monitored by the IMF/EU. Every week it will be expected to tell Ireland's lenders how much cash there is in the kitty followed by detailed monthly and quarterly reports.

The years ahead will be lean and we can only hope our new masters' recovery plan will restore us to financial health.

C Contagion was the big fear across Europe as Ireland's debt problems threatened to topple the euro. By virtue of our toxic banks Ireland is now part of the PIGS of Europe -- a motley crew of the regions' sickest economies that also includes Portugal, Greece and Spain.

For months bond holders targeted the euro's weak links, first attacking Greece and forcing it to be bailed out before turning their sights to Ireland. The attention next year will focus on how Portugal and Spain.

D Billions of bank deposits were pulled out of Irish banks as international investors took their money to safer havens. AIB, Anglo Irish Bank and Bank of Ireland saw more than €36bn being withdrawn as corporate deposits were shifted to AAA-rated institutions.

This left a massive hole in their balance sheets and left the Irish banks reliant on the ECB to provide them with cheap money.

Many nervous Irish bank customers also switched their money into foreign-owned institutions despite the Government guaranteeing up to €100,000 at any bank, building society or credit union regulated by the Financial Regulator.

E Ireland has remained a leading exporter of manufacturing goods and services and the sector continues to attract high levels of inward foreign direct investment.

Lower costs and the availability of a large pool of skilled workers are amongst the upsides of the economic gloom for exporters. The retention of our 12.5pc rate of corporation tax is also welcome as the bulk of Ireland exports come from the multinationals.

But the only way to ensure an export-led recovery that will create jobs is for Irish-owned small and medium sized businesses to seize international opportunities.

F Kerry-based financial services group FEXCO moved into the major league by purchasing Goodbody Stockbrokers from a distressed AIB for €24m in cash.

It's a bold move that will put the firm in direct competition with the likes of Davy and NCB for the first time in its history.

Brian McCarthy's business was in the envious position of having a €123m cash pile at a time when AIB desperately needed the money and walked away with what looks like a bargain.

Goodbody's senior management are staying on board, taking a stake in the business but there will be redundancies as the two businesses are merged. This transformational deal for FEXCO will be approved by regulators early in 2011.

G There was good news in Co Monaghan where the exploration company Conroy struck gold. The firm, headed by Richard Conroy, is set to develop a gold mine at Clontibret after "excellent" results confirmed the find.

And the company has hopes of an even bigger discovery at Clay Lake, Co Armagh. It has raised enough money to fund the work it needs to complete feasibility studies at the one million-ounce prospect at Clontibret and is excited about the company's prospects.

H It was left to Central Bank Governor, Patrick Honohan, to confirm that Ireland was definitely taking a bailout after days of denial from Taoiseach Brian Cowen and senior ministers.

"We're talking about a very substantial loan for sure -- tens of billions, yes," he told RTE's 'Morning Ireland' as the IMF team arrived.

His intervention sparked rumours of a deep rift between the Government and the central banker with the Taoiseach saying sniffily that Mr Honohan was entitled to his opinion.

The controversial Central Bank Governor also declared that the Irish banks were "up for sale" and that he was "relaxed" about who owned them.

I The Republic of Ireland was put up for sale on daft.ie for €900bn or nearest offer. The 74,000sqkm island at the edge of western Europe was advertised with full planning permission for 300,000 homes, eight prisons, five public hospitals, one city metro system, 10,000 schools with extensions as well as hundreds of unfinished road developments ranging in size from national primary roads to larger motorway systems.

"In need of some refurbishing," it said. "Also comes with a variety of weather, nationalities and political opinions." Offers to Taoiseach Brian Cowen. (No time wasters please)

J News on the jobs front was mostly bad with the Department of Finance expecting the rate of unemployment by the end of 2010 to be around 13.5pc as thousands of people continued to lose their jobs.

There was some relief with companies such as Citi group, outsourcing company OSG, HP and Facebook all seeking to recruit new staff. The Government announced an ambitious plan to create 300,000 jobs over the next five years in the business and tourism sectors, with 30,000 to be created in 2011.

K UCD academic Morgan Kelly, who forecast Ireland's spectacular property crash, emerged once again with more grim predictions.

If you thought the bank bailout was bad, he warned, wait until mortgage defaults hit home. Dr Doom says that, while the first round of the banking crisis centred on a few dozen large property developers, the next will involve hundreds of thousands of families with mortgages.

At least 100,000 or one-in-eight mortgages are already underwater and struggling to make repayments.

L New legislation will give the Finance Minister powers over banks guaranteed by the Government that would be the envy of North Korea's masters.

The opposition claimed the Credit Institutions (Stabilisation) Bill would give Brian Lenihan the most powerful position ever given to any minister in any government in the history of the State.

But the Finance Minister insisted these sweeping powers were necessary to intensify the Government's efforts to resolve the banking crisis and the financial stability of the nation. Independent TD Finian McGrath was reminded of Cuba when debating the Bill.

"One big difference, however, is that the Cubans nationalised the banks when there was money in them, but we take major shareholdings when the banks are broke," he said.

M One of Ireland's biggest and best-known property developers Bernard McNamara's empire came tumbling when the National Asset Management Agency moved to shut it down. McNamara, who owes about €1.5bn to Irish banks, had been working with Ireland's bad bank to agree a business plan for his company but his debts were too big.

NAMA went to court to have his building firm, Michael McNamara, liquidated and soon its assets were put up for sale.

The company was owed millions by other companies he controlled and with no prospect of repaying them. NAMA believed his building group could not survive.

N Ireland's bad bank was forced to defend itself in a court action taken by property developer Paddy McKillen.

The publicity-shy tycoon, who stayed away from the High Court during the hearing, took the first serious challenge against NAMA.

He believed that the transfer of €2.1bn of his loans to the agency -- which is also his tenant at the Treasury Building in Dublin -- would irreparably damage his vast property empire.

NAMA emerged unscathed but Mr McKillen, who claims to be facing commercial disaster as a result of the transfer of his loans to the agency, has appealed the verdict.

O The south Dublin suburb of Dalkey may become the centre of Ireland's oil industry if Providence Resources strikes oil off its coast. The company is set to begin drilling just off Dalkey Island to assess how much oil and even gas might be there.

The exploration will be offshore and shouldn't upset residents like U2's Bono although there are concerns about the potential impact on the exclusive neighbourhood.

P One of Ireland's biggest building contractors Pierse collapsed under the weight of some €200m in debts.

The firm founded by Ged Pierse in 1987 had undertaken many major construction projects in Ireland for the last three decades.

But the collapse of the property market dealt a fatal blow to the contractor which was forced to ask the High Court for protection against its creditors.

It was owed €16m by Gannon Homes, a company controlled by developer Gerry Gannon, while Pierse owed subcontractors and suppliers more than €50m.

An intricate 'spider's web' of enormous intra-company loans was exposed as being at the heart of the group's problems.

Q Sean Quinn and his family ended the year owing Anglo Irish Bank a whopping €2.8bn as efforts continued to restructure and sell his Co Fermanagh-based empire.

Once Ireland's richest man, Mr Quinn has given a "firm commitment" to repay this debt but his prospects are bleak.

He has lost control of the business he built over three decades while the circumstances surrounding the purchase of his family's stake in Anglo Irish Bank are still being probed.

R Europe's Commissioner for Economic and Monetary Affairs Olli Rehn became a household name.

The Finnish politician is Ireland's new economic overlord as the man who oversaw our austerity plan and who knocked politicians' heads together to engineer the bailout.

"The Irish are smart, resilient and stubborn people: they will get over this challenge and the EU is supporting them in that," he has soothed.

S The Government is getting ready to sell off the family silver to pay for the bailout. In the months and years ahead companies like the ESB, Bord Gais, Coillte, Dublin Port and even the National Lottery licence will all be sold as part of the biggest ever shake-up of the semi-state sector, which is worth about €10bn.

The Government's stake in Aer Lingus could also be put on the market and spark another battle with Ryanair for control of the air routes in and out of our tiny island.

T Dublin Airport finally opened its second terminal. At a cost of €600m it is an impressive building that has so far seen very little activity.

Etihad is the only airline that is fully operational there with Aer Lingus operating a few flights -- leaving the 40 shops empty.

With passenger numbers declining rapidly it will be a challenge for the Dublin Airport Authority to make it pay.

Michael O'Leary, who has pledged that Ryanair will never use T2, described it as a statement of modern Ireland: "A big bankrupt property development."

U As the Government gets ready to sell the banks it now controls, other financial institutions will also go under the hammer.

Royal Bank of Scotland, which owns Ulster Bank, is keen to offload this bank and get out of Ireland to concentrate on more vibrant markets.

Ulster has racked up enormous bad loans and has transferred more than €29bn into RBS's own toxic skip.

The RBS boss, Stephen Hester has promised a wave of asset sales and job cuts in 2011 that could see another familiar bank exit Ireland's high streets.

V Vodafone Ireland chairman Brian Patterson attacked the media for its overly gloomy reporting of Ireland's bankruptcy while wagging his finger to say that everybody was to blame for the country's economic woes.

His remarks are of significance only because Patterson is a former chairman of the Financial Regulator at the height of the boom when Anglo and AIB were lending recklessly.

"We were all responsible," he said several times in a speech to Kilkenny Chamber of Commerce. We are certainly all responsible for picking up the tab anyway.

W Wikileaks brought us the news that there are two sites in Ireland of vital importance to US national security.

The 12,200km Hibernia Atlantic transatlantic communications cable that links North America with Ireland, the UK and Europe is a key piece of infrastructure.

While the bio-tech Genzyme plant in Co Waterford was also a vital enterprise as far as the Americans are concerned.

Genzyme's 37-acre biotechnology site is a subsidiary of a Massachusetts-based multinational that produces Thymoglobulin, a kidney transplant rejection treatment product, as well as other products. It employs 460 people outside Waterford.

X Supermarket chain Tesco enjoyed lots of good publicity as the public followed the success of check-out operator Mary Byrne on the 'X Factor'.

Byrne moved to London once she made it through to the live shows but customers were treated to cardboard cut-outs of the singer for weeks and asked to vote for her.

The Dubliner, from Ballyfermot, didn't make the final but has secured a record deal and is hoping not to return to working on the tills in the near future but won't rule it out.

"I'm still an employee of Tesco and if things don't work out, I wouldn't have any qualms about coming back here,' she said.

Y Poet Theo Dorgan offered some solace to University College Cork's young graduates who like so many in Ireland now are facing an uncertain future.

Those who must emigrate, he said should go with a full heart and high expectations of the world. "Do not go in defeat, with regret, in loneliness."

And those who stay have the same opportunities to learn and explore, to discover and innovate, to be surprised and joyful, to learn and to help teach us all what it is to be fully human.

"The nation is beaten down, but not defeated. A certain kind of Ireland is over, and we are well rid of it; there is a new Ireland to be imagined and worked for, a new kind of Ireland to build, and it is you who must build it."

Z Farewell to Bank Zachodni WBK. The Polish bank that was the "jewel" in AIB's crown was put up for sale by the beleaguered Irish bank.

Spanish bank Santander snapped it up in a €3.1bn deal and also bought AIB's 22pc stake in the US bank M&T for another €1.5bn, as it struggled to raise cash.

Bank Zachodni WBK was Poland's third biggest bank and its prospects were bright. It was a dire outcome for AIB. Years of reckless lending have left it an insolvent wreck that will be sliced, diced and sold to whoever will take it.

Irish Independent

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an