The Zombie is dead

In the last 2 years the expression “Labours way or Frankfurt’s Way” has been thrown back at Labour from the right wing cynics.  Often these people take the term out of context.  It was a line contained in a speech by Eamon Gilmore during the 2011 General Election.  He was speaking about how Fianna Fail and Fine Gael had accepted the financial straight jacket of the bail out terms set out by the Troika.  Of the troika it seems the IMF & EU are capable of being flexible in relation to the conditions of the bail out. The EU needs a country to emerge from the fiscal hell of bail out.  The IMF was not the boogie man it was held up to be. It’s the end of 2 things, Anglo (IBRC) debt and the promissory note by which FF & the greens bailed out the failed bank.

It’s the ECB, our friends in Frankfurt that Eamon Gilmore identified who need to get real in relation to the impact of the bail out.  Liquidating IBRC or Anglo is something that should have happened in 2008. It’s exactly what the ECB may not like but austerity isn’t just for citizens, perhaps it’s for institutions too. The dry reference to the Irish operation and taking note of the arrangement between the Irish government and the Irish Central Bank can cover a multitude of things now and into the future. Our friends in Frankfurt may need to swot up Irish politics.

The politics of the liquidation is interesting. Labour opposed the bank guarantee on the basis of a liquidation being a better than the state bailout.  The logic of that position is to liquidate. Sinn Fein supported the bail out and now oppose the liquidation. There is a perverted logic in that too if you’re a banker, developer or believer ion socialism for the rich and capitalism for the poor.  Strange given that the party is concerned at the number of state employees earning more than €100K and IBRC has a significant number of them. Predictable given that the legislation halts any legal actions against IBRC and there still remains the matter of the Quinn assets to be decided by the courts. Sinn Fein have been hugely supportive of Quinn.  What happens to Quinns properties now will be a matter for the court and the liquidator.  It’s not the first time company law has needed emergency legislation.  Administration was brought in to save PMPA, Examinerships to save Goodman.  The more convoluted and complex the fiscal shambles becomes the more exposed Sinn Fein policy is exposed for its naivety. Are they spooked by the independents right and left?    

The liquidator will pass on performing assets to NAMA and then dispose of the left overs.  Many employees may be re-employed at NAMA but under different contracts and salaries.  Ironically Libertas who opposed the Fiscal treaty argued voting No would lead to a better deal on bank debt.  In fact the opposite has proved correct. The beast is dead, deeply regretted by Gerry Adams and Libertas but I for one, shed no tears. Time to move on.

When in a hole, Stop Digging!

I admire Séan Quinn’s achievement in business down through the years in the border area. It’s a success I’m familiar with as I have strong family connection with that part of the country and 30 years ago when cousins told me that a local man wanted to take on Cement Roadstone I didn’t think it was possible to build your own cement factory and take on that monopoly that existed in Ireland at the time. To give credit where credit is due Quinn provided valuable employment in an area that 30 years ago had poor access and was savaged by emigration and the troubles. As a kid the only industry I remember in Ballyconnell was Star Plastics, a company long since consumed by globalistion

The Quinn family have been held up as a good example of what can be achieved through hard work.  Just as Quinn’s success is entirely credited to his own business acumen, but his well documented slide has been his own fault also. To quote a line from the prayer that ended the protest meeting in Ballyconnell “Lead us not into temptation”. Ironically if Séan Quinn had not given into the temptation to buy Anglo Irish Bank for himself and his family alone, in 2005, then he would still control his companies and would still remain a relatively wealthy and respected captain of industry. While his supporters tend to portray the Quinn Family as the local boy fighting against the establishment, the irony is that Quinn is himself establishment, brother of the former GAA President, once owner of The Belfry Golf club, home to the Ryder Cup.

My recollection of the period 2005 -08 was that Mr Quinn slowly and secretly built up his share holding.  This secrecy was helped by Contract for Difference a financial mechanism that gave him control of the shares without having to publically declare the shares on a register while at the same time having an each way bet on share values. He controlled the share holding at a fixed price, is the shares increased in value he could sell them and take the profit without it being public knowledge that he ever owned the shares.  It took sometime to establish who was building up these shares in Anglo at the time. Seán Quinn needs to explain why he was so secretive about buying Anglo then. We know he publicly acknowledges buying Anglo shares was a mistake but he never mentions the secrecy, Why?

Move on to 2008.  When Anglo’s share price started to collapse the Anglo bosses then hatched a plan to loan money to a select group to buy Quinns shareholding so as to artificially and secretly inflate the banks share price and stop Quinn losing money. This scheme was all about sucking in unsuspecting investors at the bottom. These investors weren’t just speculators hoping to make money, they also included pension schemes and people relying on a sound investment to fund retirement.  One of the group called the Maple 10 who received money to buy the Quinn shares was…..Sean Quinn himself! He and his family members were loaned €650M to buy 15% of his own shares! Months later the then Government’s bank guarantee scheme saved Anglo and subsequently when Anglo was wrongly nationalised the assets against these loans fell into the remit of the recovery agency trying to retrieve some of the €30 plus billion that the state threw at the shell of a bank.  

Mr Quinn famously refused interviews by the media for a long time, it is ironic that it is now to his workers and the community that he now looks publicly for support.  The Quinn Family have played a very peculiar game in tugging at the communities heart strings not unlike the manoeuvring of shamed politicians closer to home in our recent past.   From this distance some may ask why do local people blindly support him?  Simply put, both sides of the border are areas where there exists detachment from what represents the state on either side of the border. Filling this void is a curious mix of the Catholic Church, GAA and Nationalist politics.  Quinn provided Bertie Ahern with a helicopter during the 2007 General Election.  It is sad to see people who should know better from the religious and sporting fields supporting Sean Quinn publicly.

Your programme has highlighted in the past much of pain that ordinary people locally have suffered due to some of the disastrous corporate and political decisions taken in the first decade of this century. From SNA’s to waiting lists, social welfare cuts to emigration. What people really need to understand is that the corporate chicanery and the failure of the regulator and past political masters are what trashed our society. It is the these who must carry the can for education, health and social welfare cuts.

There was a time when Sean Quinn was seen to be part of the answer to monopolies and would challenge and develop our economy. One of his supporters Michael O’Leary could be included in that bracket too. It is sadly obvious that Sean Quinn is now part of the problem and not a solution. He should comply with the High Court order and allow the tax payer recover what can be got so as to reduce the exposure of the state to this disastrous era of cowboy economics.  The one piece of advice I can give that a Quarry owner like Mr Quinn may recognise is this; When in a hole, the first thing to do is to stop digging