Time to vote

The envelope arrived at the week-end containing the ballot paper. ASTI is now balloting its members on acceptance of the Croke Park Agreement. While we voted to reject Croke Park last year as members of ICTU we’re obliged to discuss its implementation and its these proposals that are now before members. Last year I voted no. Having seen how the industrial landscape has changed in the last year I’m now having a long hard think about it.
There is no suggestion that the ASTI will resort to industrial action if the union votes to reject the deal. The CPA does offer the unions abiding by it protection for earnings in 2011. That’s effectively what the state gives. What the public service gives is flexibility (i.e. concedes to government what the department had long pursued, PTM outside of school hours, filling in and additional 33 hours to be worked in the working year).
I voted against the CPA last year because I preferred to protect teachers jobs. Personally I’d accept a pay cut over a reduction in working conditions. I’d prefer to protect the jobs of younger teachers, those with mortgages rather than seek to protect my own income for the moment. Let’s be honest there is a low level of morale among public sector workers. They’ve been the subject of abuse and denigration for some time. A poll last week in the Sunday Indo showed that 54% of Labour supporters would support a reduction in the numbers. Support among supporters of other parties for cuts were much higher with 69% of Sinn Fein supporters wanting to see job losses. In the north SF have frozen the pay of all public sector workers on as little as £21,000.
But there are 2 issues that are making me think about voting at all. One is the Fine Gael proposal to get rid of 30,000 public sector workers on top of all that. I think that that would be disastrous. I don’t deny that there are people in the public sector who want to go and that if a voluntary redundancy package was on offer that they would leave and take their pension. Before Christmas such a scheme was on offer at the HSE but there weren’t as many takers as management thought there were.
The other thing that concerns me is the upward trend in mortgages. I’ve a mortgage with Permanent TSB. It seems that interest rates are now increasing not because of any ECB decision but because banks want to increase their liquidity. It’s likely that other banks and building societies will follow up. There is less competition in the banking sector following the withdrawal from Ireland of HBOS and the ECB/EU stated objective of restructuring the banking industry; i.e. closures. Mortgage interest relief is only available for 7 years for first time buyers.
The brunt of this move is going to reduce the amount of disposable income for home owners like public servants. Where is the money that will re-boot the economy? What worries me is that there will be less spending rather than more spending in the economy. That in turn will prolong the slump, not any decision on the part of public servants to implement the CPA.
So when I vote today on the proposed deal, I really get the feeling that power to actually decide your future in the workplace and power to participate is gone. Regardless of how I vote and I’m still veering towards No, most workers feel it ultimately won’t matter. There are lessons for all of us in the context of a general election. What’s the bet it’ll be a low poll?

Brian falls at the first test!

Last week Eddie Hobbs advised to pay off your debts before interest rates start to climb again. Many have been lulled into a sense of expecting prices to drop as petrol, mortgages and food starts to drop as northern prices are rolled out here by multiples. But did he know something? Like many others I got a shock when I learned that interest rates at Permanent TSB were set to go up. My mortgage is with Permanent TSB and recently I lost the benefit of Mortgage Interest Relief. While the effect of increased taxation and the infamous pensions levy mean for all of that despised category called public servants that your income is well done. This is grist to those who want to take advantage of the economic slump to reshape Ireland. Lower income, more charges on the individual, less public service will drive a new private sector that will provide the platform for the next boom, is more or less the credo of the Irish business class.
An even bigger shock arrived later in the day when I heard that ESB hope their domestic customers will soon subsidise their industrial customers through higher charges for power. Not that too many on the minimum wage can afford a mortgage with Permanent TSB but the next move by IBEC/FF was the announcement that legislation would soon be here to bypass the minimum wage and drive pay down in some sectors.
It seems that rather than take on the banks who benefited from the greatest bluff of Irish economic history through the bank guarantee scheme once more corporate Ireland will make either unskilled or young workers pay for the prolifigacy of bankers, developers and Fianna Fail. The real way to re-model the economy is by re-orientating our base back in the direction of production and exporting. But that would mean that the quick buck merchants of the last decade would lose their grip on Ireland and that’s a step too far.
So the long and short of is that the other banks will now follow Permanent TSB in raising their variable rate to borrowers. In a rare interview the Permanent TSB CEO was quick to remind us that his bank was paying for the privilege of the bank guarantee to the value of €30M. So follow his logic and he seemed to suggest that he’d a legal entitlement to the states good name and himself and his board would be off to the Four Courts to put the state in its place. There was however no need for that as Minister Lenihan knows where that place is and so do I, I’ve blogged about it for almost a year now! The government’s bluff has been called. There will be no nationalisation. Instead private debt is set to climb in Ireland. The ECB interest rate and policy is being ignored for Irish consumers, 10 years ago it was quite different as our rates had to converge with Europe’s to allow Irish banks a bit of the property bubble, now interest rates must climb to shore them up. So its time to knuckle down and pay up for the roof over my head!

Permanent TSB shore up Anglo but shaft Anglo shareholders

There’s an old saying “to be sure to be sure” and it’s obviously something that Permanent TSB take seriously. I say this because the bank is now under investigation by the regulator as it has emerged that the Permanent TSB lodged €4B to the Anglo Irish Bank within hours of the government guarantee scheme becoming law. The Government-appointed directors at Anglo Irish are also investigating the deposit, which was lodged prior to the bank's reporting year-end on September 30th. It's understood that the deposits were withdrawn by ILP a week to 10 days later.
The regulator is examining the movement of deposits into the bank around its year-end and whether Anglo Irish Bank artificially propped up deposit around the end of its accounting year in a bid to bolster its financial strength. The news peels back another layer on the charade that Ireland’s financial service sector ahs become. The obvious question is why would Permanent TSB take such a step? Is it further evidence of an old pals act at the top in Irish business? Given that Permanaent TSB is covered by the same government guarantee scheme there was no chance of a run on the bank at the time of the move so why lodge money outside the bank at this stage? Very intersting, I’d love to know why.
What’s certain is that shareholders were not told and it effectively inflated the books and fooled those investors as to the extent of its liquidity. this was a deliberate deception of shareholders as tot he true extent of the banks books, I note that the bank is not advancing the jesuitical defence of the former chairman agaisnt accusations of illegality when he was moving cash in and out in a similar way.
These figures were moving in the front door at years end just as Sean Fitzpatrick was wheeling his traunch in from his warehouse. The reception at the bank must have been a very busy place with the comngs and goings of cash. which begs the same question as with Fitzpatrick's loans which subsequently turned out to be the tip of the iceberg and its this, if this is what we know about Permanent TSB, what else is there to e revealed? Permanent TSB which is broadly a domestic mortgage lender has escaped attention so far but now seems to be firmly in the sights of the regulator.
To make matters more intersting Brian Lenihan has now decided that he’s oing for the bad bank scenario where all toxic debt from across the system will be cleared through one institution. This has come at the end of a week when Bankers saw off the government’s demand for cuts in bonuses and a 2 year moratorium on re-possesions for defaulting mortgage holders due to job losses. At market’s close tomorrow Minister Lenihan is set to announce how he will proceed on market re-capitalisation. As of yet there’s no guarantee that the re-captitalised banks cannot go back to the speculators who lost the money in the first palce rather than provide liquidity to maintain employment. The more the controversy staggers on, the more there is a sense of a minister unable to cope. Is it any wonder small business are closing? There's only one sure thing, send in an inspector or the fraud squad.