Sunday 20 January 2019

Our economy depends on Kenny being stronger in the face of a dual crisis

While the brunt of the migrant crisis was mainly felt by the frontier states of Greece, Hungary, Italy, Poland and eastern Europe, the Brexit fallout will be felt most severely in Ireland.
While the brunt of the migrant crisis was mainly felt by the frontier states of Greece, Hungary, Italy, Poland and eastern Europe, the Brexit fallout will be felt most severely in Ireland.
Ivan Yates

Ivan Yates

Cometh the crisis cometh the man, and Taoiseach Enda Kenny's legacy will be defined by his endgame and how he handles Brexit and our housing crisis.

Both issues have the capacity to undermine economic prosperity and social cohesion.

And so far, his government's response to both seems tepid, falling well short of what is required and reflecting a lack of understanding of their enormity.

Of course, in most circumstances governments must not over-react, this merely fuels investor uncertainty. But this time it's different.

It's impossible to overstate the impact of our nearest neighbour's EU exodus. We should immediately deploy our most extensive high-powered diplomatic crusade to protect our "vital national interests". This entails safe-guarding a century of Anglo/Irish interdependence.

Malta and Ireland are the only remaining EU states which speak the same language as the UK. Only Ireland shares a land border with Britain and has mutual obligations under Anglo/Irish and European treaties. If that is not enough, 25pc of our GDP is reliant on dual British Isles economies.

While the brunt of the migrant crisis was mainly felt by the frontier states of Greece, Hungary, Italy, Poland and eastern Europe, the Brexit fallout will be felt most severely in Ireland.

While Jean-Claude Juncker's Luxembourg and Donald Tusk's Poland won't even feel a jolt from Brexit, Ireland has been rattled to its very core.

It's therefore simply absurd for British-Irish relations to be confined to an EU context in the hands of centralised Brussels Eurocrats,

Our Franco/German overlords cannot leave us marginalised at the untender mercies of the laws of unintended consequences.

The impulse to deter possible future Eurosceptic states from absconding by caning Britain and reducing it to 'third country' trading status by extension means reducing the North to a disinherited wasteland.

The North's prospects are genuinely bleak. Gone are the EU farmer payments (halving incomes), funding for third-level education/training will also be slashed. The ending of EU cross-border peace dividends and the reduction in foreign direct investment are also inevitable. Corporations will either opt for the UK market or the EU territory of the Republic.

That is why the North must be made an exception and given full single-market status, akin to that of Switzerland and Norway.

Mr Kenny must make it crystal clear in every EU capital that this unprecedented mess cannot be determined by narrow legalistic views.

It requires a bold political resolution.

If the EU really wants a border, then let it pay for it. The imperative is for us to strike a deal with London prior to the UK invoking Article 50 of the Lisbon Treaty.

We should threaten to veto EU/Brexit terms unless such Anglo/Irish bilateral agreements involving a common travel area and the labour market are agreed.

Protocols can be copper-fastened from the rest of the continent: it may take skilful diplomacy, but it can be done.

Another pressing area of concern must be the latest housebuilding figures from the Property Industry Council. They reveal that just 11,000 homes were constructed this year.

The housing crisis is worsening despite all those reports, recommendations, and promises.

Soaring rents account for up to 40pc of monthly salaries for Dublin working families.

Any wonder that 6,000 people are in emergency accommodation?

That is why Housing Minister Simon Coveney's action plan must focus above all on ensuring that 200,000 new houses (public and private) are delivered within the next five years.

The relaxing of Central Bank lending limits won't build one new house.

Loan controls of 3.5 times income and 80pc of the asset value are there to protect homeowners from unsustainable debt.

The Government has an obligation to negotiate attractive terms with developers to build on specified zoned areas.

They already have planning permission for 27,000 units. As a trade-off for either fixed profit margins of 15pc (over agreed costs) or an affordable price cap, the Government would provide special incentives.

These might include: a 9pc reduced VAT on the final house price (down from 13.5pc); a waiving of planning Part V conditions of 20pc of social housing entirely.

It would also involve an agreed state investment of infrastructural expenditure for site development; including roads, water and sewage treatment.

These terms would all be conditional on delivering saleable units within a defined deadline of two years at an agreed maximum price.

Waiting any longer is not an option.

Irish Independent

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