Tuesday 28 January 2020

Gene Kerrigan: O'Dea exit not part of the Master Plan

With all eyes on the Dail, a bank dodged paying back €280m it owed the taxpayer, writes Gene Kerrigan

gene kerrigan

WOW, that was some big story of the week, wasn't it? You know what I'm talking about? Low standards in high places, and all that. (A reader has just emailed to say: "You mean the Willie O'Dea resignation, don't you?". Eh, no sir.)

No, the story of the week was far more important than that fleeting matter. Yesterday, we -- the people -- were due to be paid a small stipend from the Bank of Ireland. A mere €280 million or so, delivered to the exchequer. And guess what? The bank didn't pay up. Not to worry -- everything's going according to the Master Plan! We are, for whatever reason, remarkably calm about what's going on.

The ransacking of the economy; the transfer of huge wealth from the citizens to the bankers and their bondholders. The protection of the rich; and the placing of the burden on the poor, the disabled, the workers, the middle classes and credit-starved small businesses. But, hey, the banks are being looked after. And eventually, in some as-yet-unexplained way, this will "kickstart" the smart economy and before you know it we'll all be back buying five-grand handbags.

Oh, did I mention, apart from the €280 million that Bank of Ireland didn't pay, on May 13 there'll be another €280 million we're due that AIB won't be paying either? The total of €560 million was to be a small return on the seven billion we've donated to "recapitalise" AIB and Bank of Ireland. We were due our first €280 million dividend yesterday but the EU said they were still checking the fine print, so the payment couldn't go ahead. And, here's the bit I love -- Bank of Ireland says, instead of the €280 million, they'll give us shares in the bank. And yesterday nice Brian Lenihan said he was cool with that. (Frankly, if I had to choose between Bank of Ireland shares and a cheque from the Bank of Toytown . . . )

The media is upset -- because the State shareholding in the banks is increasing. And the banks are upset for the same reason (apparently it infringes the Eleventh Commandment -- Thou Shalt Not Nationalise, for fear of upsetting The Markets -- May God Be With Them). Not to worry. This creeping nationalisation is embarrassing for Lenihan, but otherwise the Master Plan is working. The two Brians are on the case. Meanwhile, the other wing of the Master Plan, the entity known as Nama, is soaring like a . . . like a . . . well, it's floundering.

Nama is way behind schedule in buying the first €19 billion of bad debt. Anglo, the freak "bank" that should have had a stake driven through its zombie heart, accounts for about €10 billion of that. Utter insanity, but part of the Master Plan. Meanwhile, Arthur Beesley of the Irish Times revealed the top 10 visionary entrepreneurs whose activities generated the bad debt -- the smartest lads to ever come out of Dublin, Cork or Galway. Liam Carroll, Bernard McNamara, Sean Mulryan, Derek Quinlan, Paddy McKillen, Treasury Holdings (Johnny Ronan and Richard Barrett), Michael O'Flynn, Joe O'Reilly, Gerry Gannon and Gerry Barrett.

These are the visionaries lionised for years in the media and in the country's business schools. They had the vision to, eh . . . borrow more than they could repay. They were bankrolled by the country's leading reckless gobshites -- the top bankers at Bank of Ireland, AIB and Anglo, along with some wannabe gobshites at Irish Nationwide and EBS. And where did the gobshites get this money? From an unidentified cabal of International Idiot Gamblers. Not to worry. The Master Plan is working.

Suddenly, Cowen and Lenihan began referring to "our banks". Now, politicians may legitimately refer to "our hospitals" and "our schools", but "our banks"? Imagine if Dunnes Stores became insolvent. Would we refer to "our supermarkets" and insist we must use State money to prop them up? No, they're a private outfit and they look after themselves. Suddenly, the banks became "ours". Because banks are different. There was no way we could do something radical -- set up or encourage an alternative banking infrastructure. That would be against market principles, May God Be With Them. Better by far to take billions from the pension funds and give them to dead banks in the hope that -- well, it'll all work out in the end.

"And so it will", said Brian. "Indeed it will", said the other Brian.

"Very courageous", said the man from the EU, with a small, satisfied smile on his highly polished face.

The Master Plan (thrown together in a panic, under the influence of stunned bankers) insists that above all else the zombie banks must be revived. The reckless gobshites and the International Idiot Gamblers are to be bailed out, while the low paid and the disabled get stiffed.

What about unemployment? Well, that too is going according to the Master Plan. Unable to devalue the currency, the Brians seek to increase competitiveness by making export goods cheaper. Method? Deflate wages by kicking the bottom out of the labour market. Mission just about accomplished.

The Master Plan was never formally launched. It has to be discerned through the cracks in the establishment's solidarity. We were given a cover story -- by reviving the insolvent banks we'll increase lending to business. This will kickstart the economy, leading to increased employment and prosperity for all. The sceptics said this was mad. Come on, we were told, don't be negative. Pull on the green jersey.

Well, perhaps you'll believe Eugene Sheehy, then head of AIB. Speaking in November 2008, Sheehy said: "Recapitalisation of the banks will not make credit more available." A year later, asked at an Oireachtas Committee to comment on Nama and credit, Sheehy said: "If people think that the day after Nama, that the country is going to be awash with money, that's not going to happen."

In between, Steven Seelig of the IMF, the two Brians' own appointee to the board of Nama, told the Government confidentially that Nama won't significantly increase lending. The cover story justified the insane economic strategy. The consequent deflation of the economy has thrown thousands more onto the dole.

Hold on a minute . . . I've just had a message, via carrier pigeon, from Willie O'Dea. "How dare you, in the second paragraph above, refer to this bank story as far more important than my resignation? By the way, are you still involved in the heroin trade? Heh-heh, only kidding." Willie -- a sly local politician -- was caught spreading calumny about a rival, behaviour that was on Wednesday evening deemed acceptable by every Fianna Fail and Green Party TD. Subsequent unease among rank-and-file Greens caused political panic, forcing Willie's resignation. In my books, that's a minor story. Politicians -- we've seen 'em come, we've seen 'em go. No big deal. On the other hand, the people of this country are stretched on the ground, in shock at the sudden collapse of the economy. Brian Cowen is sitting on our head, while John Gormley holds our legs down. And Brian Lenihan is rooting through our pockets. Whatever he finds, he gives to the banks.

That, compared with the resignation of a transient politician, is a story.

Sunday Independent

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