Saturday 7 December 2019

Big Boy, Mammy and the vulture funds

It's fun kicking Leo, but it's a different story when Enda deals with tough guys abroad

How Enda deals with Leo is not how he deals with everyone
How Enda deals with Leo is not how he deals with everyone

Calmly, cravenly, and with no fuss at all, last Tuesday our Government lined up to protect some of the most predatory financial vultures on the planet. This is the Government that prides itself on making "tough decisions".

The decision was whether it should defend the long- term welfare of citizens in this country and elsewhere or side with the financial vultures.

For Enda, it wasn't a tough decision at all.

Meanwhile, at home, the general election campaign was under way. The election doesn't have to be called until 2016, though it may happen less than a year from now. Enda Kenny is already off and running.

It's not a pretty sight, Enda running for office. He gets nervous. He desperately wants a second term. Anyone could have beaten Fianna Fail in 2011. If we'd dug up the corpse of Oliver Cromwell and run him for office he'd have beaten Fianna Fail.

This time, Enda wants us to show that we don't just hate Fianna Fail, we love Enda and his tough decisions.

Part of last week's bread and circuses was about nervous Enda getting tough with Leo Varadkar. "I don't mind being slapped down or scolded," Leo drawled, "I'm a big boy".

Leo, however, is easy to kick around. At the United Nations, Ireland had a chance to stand up to some of the really big boys. The ones who hang around the schoolyard, punching other kids in the face and taking their lunch money.

Ireland, in the General Assembly, had a chance to endorse Draft Resolution A/68/L.57/Rev.1, proposed by Bolivia.

You've probably heard of 'vulture funds'. These are financial entities that pool the wealth of very rich people. They seek out distressed companies or countries, and seek to profit.

They create nothing, they produce nothing, they are parasites. The classic case, which sickened even the IMF, was Peru in 2000. Peru was in trouble, called in the IMF and sat down with its creditors. They worked out a deal to restructure the debt. Meanwhile, a couple of vulture funds nipped in and bought some bonds on the cheap, from original creditors, paying cents on the dollar.

About 180 creditors took part in the restructuring, agreeing to a cut in the debt. The two vulture funds refused to play ball. They went to an American court and tied the whole deal up in litigation.

They wanted to be paid in full. Not what they paid for the bonds, but the original face value of the bonds.

Peru was immobilised in debt. Genuine creditors couldn't complete a reasonable settlement and get on with their business. Eventually, a desperate Peru gave the vultures $56m in return for bonds for which the vultures paid $11.8m.

Something similar is going on now with Argentina. Pay us several times what we paid for the bonds or we'll tie you up in the courts for years, screwing over everyone.

When the global financial system cracked in 2008, it was widely agreed there had to be real reforms, or it would happen again. Politicians love bankers, so reform moves very slowly.

As part of such reform, Bolivia brought to the United Nations a proposal for dealing with vulture funds. This will take years to get anywhere. Years of discussion, legislative doodling, amendment and compromise. But, as a first step, it passed by 124 votes to 11. So, at least it's on the agenda.

Big hitters like China, India and Brazil supported it, along with dozens of smaller nations.

Who would vote, on principle, against such regulation?

The banking nations did. Those who feared their financial sectors might be prevented from indulging in scary, lucrative and ruthless financial gymnastics. In short: the US and the UK, Germany, Canada and Japan.

And, nodding frantically to show their obedience, the countries run by rightwing governments who defer to the banking nations: Australia, Czech Republic, Finland, Hungary, Israel - and, of course, Ireland.

When you're used to trotting along at the heels of the really tough guys, the only way you can show off your muscles is by kicking around the likes of Leo "Big Boy" Varadkar. So it was last week.

Nervous Enda had a conniption. Leo appeared unwilling to carry through James Reilly's plan to turn the health service into a revenue stream for the insurance companies. The Taoiseach expressed his "annoyance" at the civil servants who said various cuts and stratagems couldn't be managed. Enda doesn't want to be told that what he wants can't be done.

Leo is under the impression that, as Minister for Health, it's his job to defend and develop the health service. He thinks he should assess policies in the public interest and act accordingly.

Enda says he's "amused" by those who find reasons "as to why things can't be done". And he's "far more interested in hearing how you set about achieving what the Government's targets are".

Don't talk, don't think. Do what the Government says.

And these days the Government doesn't include all ministers. The Government is the Economic Management Council - Enda, Noonan, Howlin and Burton. And the highly paid backroom boys employed to hold Enda's hand, so he doesn't get too nervous.

Fine Gaelers tried to make light of this. Michael Ring told RTE News: "Look-it, the Taoiseach made a comment. It's like your mother giving out to you - but she still loves you."

And here Mr Ring put on a smile so sugary that RTE had to put up a warning: "People of a diabetic disposition should turn away from the screen."

Enda, it seems, is our Mammy.

This man Ring is a government minister. They give him a portfolio, an office and a chair and they let him make phone calls and everything, just like a real adult.

Mr Ring was off down in Cork, at the Fine Gael 'think-in'. Apparently, there are two days each year during which Fine Gael TDs and senators are allowed to think. They're brought off to a nice hotel, fed and watered and allowed to sing maudlin songs until the wee hours.

Next day, it's over. For the rest of the year, Mr Kenny's highly paid backroom boys do their thinking for them.

Currently, they're doing what they call "managing expectations" for the Budget. To "manage expectations" is to play head games with the citizens. Using friendly media elves, anonymous cute hoors float ideas, to get a reaction. They leak details and then denounce leaks. Then, Enda, Michael, Brendan and Joan come up with the most manipulative Budget package possible.

Last week, Enda tried out a rather strained electoral metaphor that his highly paid backroom boys thought up (or, maybe, in a burst of creativity, the lad thought it up himself). It's: "Who do you want to manage your house?"

Then he does a bit about how the last shower destroyed the house and Enda has tidied the garden and built an extension - some nonsense like that.

It's really rather early to be releasing that kind of electoral sloganeering, but when you're as nervous as Enda you can't help it.

In 2011, the only people supporting Fianna Fail were - well, you know the type: a few first preferences short of a quota. All Enda had to do was avoid tricky debates and interviews. And keep repeating that he had a Five Point Plan. That won't be enough, this time. Even with a media that's so easily distracted by meaningless little makey-up dramas.

Two years ago, Enda told us we were about to get back a chunk of the €64bn he and Biffo gave the bankers. Then, there was talk of a €3.5bn bonanza. Now, Mr Noonan thinks he can save €1.3bn, paying some debt early. And Enda wants us to cheer.

It's a sleazy place, this kiss-up-kick-down world, in which our Government exists. You can play tough guy with Big Boy. You can push around the TDs who depend on you for a promotion.

Kicking down at those below you is easy. It's kissing up to the strong that's embarrassing. Lips permanently poised to kiss backsides in the EU, or the UN.

Sunday Independent

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