Thursday 13 December 2018

Comment: Varadkar caught on the hop over debt sale as Fianna Fáil weighs up options

An Taoiseach Leo Varadkar. Photo: Kyran O'Brien
An Taoiseach Leo Varadkar. Photo: Kyran O'Brien
John Downing

John Downing

Those 'vultures' appear to be coming for Taoiseach Leo Varadkar after all, as Permanent TSB has signalled it is definitely headed towards selling a major loan book to the dreaded vulture funds.

In the Dáil for a brief period yesterday, Mr Varadkar was rather like a rugby player jolted to find himself offside, and rushing back to position in hopes the referee (in this case the Irish electorate) might decide he had not affected play.

Three times the Taoiseach insisted there was no imminent PTSB mortgage debt sale to the vultures, and even if there was, there could be strong protections for any hapless debtors.

Fianna Fáil's Michael McGrath had been wide awake to the political realities of this one for some time.

His task was an easier one than that faced by the Government.

In the court of public opinion, it was better by far to be on the side of hard-pressed people in mortgage arrears than side with, boo-hiss, banks and vultures.

The Opposition finance spokesman was carrying very little excess baggage, a decade after the banking crash which happened on his party's watch.

He found it easy to go on the offensive on behalf of the underdogs. Suddenly, hoping that he was definitely back onside, the Taoiseach was lavishing praise on McGrath.

Could it be that they were now both on the same side, the side of the angels? Hark at the Taoiseach's effusiveness: "I think distressed mortgage holders are under enough stress and we should not add to that unnecessarily by causing them undue concern.

"No such proposal yet exists and the Government, absolutely, will give open and constructive consideration to any proposals for additional protections that may be necessary so we ensure the rights and freedoms of borrowers and mortgage holders are protected."

The political manoeuvre again reminded us that Mr Varadkar's hybrid minority Coalition lives by grace of Fianna Fáil. But the whole episode also suggested that yet another can just might have been kicked down the road on to that mountainous political pile of aluminium.

This one was always going to be tricky for the Government, and notably for the Taoiseach and his Finance Minister Paschal Donohoe.

The most glaring fact remains that Permanent TSB is 75pc taxpayer-owned thanks to a bailout after the 2008 crash.

But against that, there is also the lingering debt legacy problem which has hobbled Permanent TSB, with pressure from the EU to finally resolve things one decade on. That carries less visible but equally real obligations, also to Irish taxpayers.

At all events this one might be recorded as one of the shortest lived political fixes in recent history. By teatime, PTSB had issued a very blunt two-page statement which brought things back to where they were at teatime on Sunday last.

The bank is headed towards a sale and, despite the Taoiseach's repeated assertions to the contrary, those vultures are believed to be the only show in town.

There is also a certain air that all of this will happen sooner rather than later with the real threat that these vultures could be having the Taoiseach and his Finance Minister for a rich dessert.

The question now is how far Fianna Fáil pushes this.

Irish Independent

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