Tuesday 18 June 2019

Colm McCarthy

'Depending on whose estimates of ultimate cost are to be believed, the NCH cost appears to have at least doubled, or possibly trebled, since the project was approved less than four years ago.' (Niall Carson/PA)

Colm McCarthy: 'There must be financial prudence with the planning of major public projects' 

A few weeks ago, this column asserted that ''elected politicians are being given the run-around by the promoters of large public capital projects. The political decision-makers have been solemnly approving major schemes based on cost estimates which bear no relationship to the bill which is ultimately presented. This is not just a threat to the sustainability of the state capital programme. Even if...

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US President Donald Trump at a 'Make America Great Again' rally in Charlotte, North Carolina.

Analysing rise and fall of populist forces 

Democratic political parties are happy to be popular but reluctant to acknowledge populism as part of their platform. Populism has come to denote a less-than-respectable appeal, for parties on the right, to xenophobia, and on the left to delusional fixes for economic problems. But the right and left versions can fuse: anti-immigrant sentiment plus rickety economic policy gimmicks have marked the Trump presidency in its appeal to blue-collar voters, and the Brexiteer platform in the UK has similarities - stop immigration and somehow create prosperity through an implausible extra-...

The Central Bank. Photo: PA Wire

Mismanagement in banking must be held to account 

After six unbroken years of economic recovery, memories of the financial crash are beginning to fade and the anger to subside. In the early and middle months of 2009, as the bill was presented to every household in the country, the public mood was for a mass lynching of builders and bankers. Ultimately the builders ended up bust and the politicians got lynched too, at the election in February 2011. The bankers, with a few exceptions, sailed off into the sunset, as did their inattentive regulators.

Albert Einstein

Colm McCarthy: Let's do an Einstein thought experiment on rent rates 

The report on residential rental costs released last Friday marked the sixth straight year of relentless increases. Rental costs nationally are now one-third higher than they were at the peak of the bubble in 2008. The chief executive of the housing charity Threshold, John-Mark McCafferty, said: "It is abundantly clear that the housing market is broken. Consecutive governments have done little to stop this, leaving families right across the country struggling to keep a roof over their heads."

HOT PROPERTY: Workers take a lunch break in the shadow of the apartment blocks around Dublin’s Grand Canal Dock. Photo: Tony Gavin

How can living in Dublin cost more than Geneva? 

During the World Cup the pubs around central Dublin found themselves unexpectedly thronged by flash mobs of young Poles, Germans, Brazilians and assorted other nationalities in team shirts, who gathered by text message to support their compatriots. One embarrassed barman sent out for a large Polish flag which arrived just in time for the team's exit from the tournament. But not before we had both taken on board the complaints of his new-found customers about the rental crisis in Dublin.

Stock image

Let's not give our economy another lash - it's time to slow things down 

If the Government really believes that economic growth will continue at a reasonable pace into 2019 and 2020, it should be targeting a surplus in October's Budget. Indeed after five straight years of sustained recovery the Budget should be in surplus already. Instead there has been another large overshoot on health spending in the first seven months of 2018 and the undemanding target for 2019 (yet another deficit, this time €350m) is under pressure.

It seems to be forgotten, especially in the United Kingdom, that the ready availability of cheap and frequent air travel in Europe is an
achievement, and a fairly recent one, of European Union policy.

All change at Holyhead if no deal is landed 

Early in his premiership David Cameron despatched the Royal Air Force to enforce a no-fly zone over Libya, helping to topple the dictator Muammar Gaddafi. Things ended badly - the good guys lost the ensuing civil war. A subsequent Cameron brainwave, the 2016 Brexit referendum, is now threatening another no-fly zone, this time over the United Kingdom itself and without scrambling the RAF on this occasion. A no-deal Brexit could mean wholesale disruption to air travel and major costs for UK airlines and airports.

Burden: Giant UK construction and outsourcing company Carillion went into liquidation after running up debts of around £1.5bn. Photo: Getty

Costly lesson of private finance and public debt 

The bankruptcy of the giant UK building contractor and outsourcing company Carillion has produced some backwash in Ireland, where the company was involved in several school-building projects. The collapse has provoked politicians in Britain, on both left and right, to question anew the so-called private finance initiative (PFI) which has been used to fund many state investments in the UK since the early 1990s. It is identical to what we call public-private partnership (PPP) in this country. The politicians have a point, although not quite the point many of them have been making. Carillion's...

Leo Varadkar makes a coherent case for Europe but this love affair could prove ephemeral for Ireland. Stock picture

It's fun to love Europe right now, but foolish to trust too much 

Writing in these pages before Christmas, Leo Varadkar expressed the view that Ireland's natural home was in the European Union. He wrote: "Over the past few weeks the support we received from the EU negotiators and fellow Heads of State and Government was invaluable and was the clearest possible illustration of the values of the European Union, and why small countries are better off in a big union. It puts beyond any doubt that our future lies in the European Union at the heart of the common European home that we helped to build."

Taoiseach Leo Varadkar. Photo: Collins

Leo should demand an apology from Europe 

Ireland's return to levels of economic activity not seen since the credit bubble began to burst 10 years ago is not the only "lost decade" that deserves notice this summer. A decade has also been lost in reforming Europe's dysfunctional common currency regime and the same air of premature celebration is taking hold. Just as there is no guarantee of plain sailing for the Irish economy, critical weaknesses in the common currency design remain unaddressed.

Issues: Taoiseach Leo Varadkar outlines Ireland’s key concerns over Britain’s Brexit plans during his speech at Queen’s University in Belfast. Picture: Liam McBurney/PA Wire

Border issue means that customs union must stay 

Leo Varadkar's speech at Queen's University last Friday reflected (politely) his judgment that the British political leadership has wasted 14 months since the referendum in dodging the key challenges in implementing Brexit. The continuing retreat from reality saw foreign secretary Boris Johnson in New Zealand last week and the trade secretary Liam Fox in Argentina, exploring post-Brexit trade deals (aboard, metaphorically, the good ship Global Britain) to replace what will inevitably be lost in Europe.

Risky: British Prime Minister Theresa May responds to questions after she announced in the House of Commons last Wednesday that she has triggered Article 50, firing the starting gun on a two-year countdown to the UK leaving the EU. She seems prepared to risk no deal being arranged before Britain walks away Photo: PA Wire

Colm McCarthy: Ireland could be biggest Brexit loser after the UK 

Theresa May's resignation letter to Donald Tusk last Wednesday and his response on behalf of the European Council last Friday made explicit and prominent reference to exclusively Irish concerns in the upcoming Brexit negotiations, as did Guy Verhofstadt, who will represent the European Parliament when it comes to approval of the deal. Michel Barnier, the European Commission's chief negotiator, is on the record to the same effect. That all negotiating parties, British and European, have endorsed the principal concerns of the Irish Government, and in similar language, is a...

Bus Eireann is no longer a key provider and most travellers have other transport options. Photo: Damien Eagers

Bus row offers a chance to tackle transport realities 

While the suspension of strike notice at Bus Eireann and the resumption of talks between unions and management may result in some form of interim settlement, the underlying problems at the company, and more broadly in the CIE bus and rail business, are not being addressed. Demand for intercity public transport is in decline and the costs of meeting this demand through the CIE model are excessive. The minister has wisely kept away from the talks, keeping the taxpayers' chequebook out of danger for now. But the taxpayer remains on the hook for a system of public transport...

Irish ways: Dublin Port and Ringsend, where the proposed film studios would be built

State's cinema trip should be censored 

There is quite a spat under way about the possible location in Dublin's docklands of a new film studio, promoted by a former chairman of the Film Board and a group of film industry operators. They have their eye on some State-owned land, possibly land belonging to Dublin Port or alternatively part of the storied Irish Glass Bottle site which ended up in Nama. The chief executive of Dublin Port has accused the promoters of a 'land grab' no less, while they claim to be offering jobs, economic growth and all things good and wholesome.

Gamble: Boris Johnson, one of the Brexiteers hoping for a clean exit from the EU. Photo: Reuters

Let's end wishful thinking and look at the hard facts 

The UK Government is likely to trigger Article 50 of the Lisbon Treaty sooner than had been expected, in the first months of 2017, according to last Thursday's remarks from Foreign Secretary Boris Johnson. EU Council President Donald Tusk indicated last week that this was also Theresa May's timetable, only to be corrected by the UK prime minister. The Three Brexiteers in the UK Cabinet (Johnson, Liam Fox and David Davis) have been jointly charged with executing Brexit. While the division of responsibilities is unclear, all three appear to contemplate not just an accelerated...

Michael Noonan described the Commision's decision as 'bizarre' Photo: Tom Burke

US Treasury is owed the tax that Apple has avoided 

In 1935 Albert Einstein and two co-authors published an article in an academic journal called the Physical Review about the problem of quantum superposition, the idea that a subatomic particle exists in a combination of several alternative states. The act of observation affects the particle making it select just one of these states. The Austrian physicist Erwin Schrodinger concocted a thought experiment to illustrate the point. A cat is enclosed in a lead box with a device which might or might not have released a fatal dose. When the box is opened, the cat will prove to be either...