The notion that Bertie Ahern would assist a group of US venture capitalists to take a chunk of equity in the major Irish banks is as risible as it is dangerous for the economic future of the country.
His role in advising Drumcondra- born Nick Corcoran of the Mallabraca consortium surfaced on the same day that Ahern joined banker, Sean FitzPatrick, of Anglo-Irish Bank to give a talk on the future economic prospects of county Wicklow.
Given the roles of both men in the rapid deterioration of the national and public finances one would have thought they would have maintained a dignified silence and allowed the government and others to get on with restoring some stability in the most difficult of financial climates.
Ahern and Fitzpatrick in their separate ways fed the monster that was the property boom, and failed to anticipate the inevitable downturn. Ahern enriched a small number of property developers and builders, including some major contributors to his party and his personal organisation through reckless politics while FitzPatrick continued his bank’s equally reckless lending that brought Anglo-Irish to the verge of collapse in September last.
The notion that US-based JT Flowers and the Carlyle Group, with its links to the Bush family and a long line of suspect oil industry and military contracts, would use Middle Eastern money to take a slice of Bank of Ireland is ominous and is a certain precursor to the short-term asset stripping of one of the country’s leading financial institutions.
Of course the boards and management of the banks and building societies as well as inept regulators have made a glorious cock-up of their responsibilities, and cleaned up with extortionate bonus schemes at the same time, but that is no reason to throw out the baby with the bathwater.
Finance minister, Brian Lenihan, will soon reveal the nature of his plans to recapitalise the banks and clearly there is resistance in the financial institutions to any challenge to their previous position as the most powerful untouchables of Irish society. Together with the clique of super rich property speculators and developers they have wielded an inordinate influence on the Fianna Fáil-led administrations over the past decade and more.
They are seeking to avoid any of the pain associated with the government’s investment of billions of Euro of tax-payers money in the recapitalisation process while Cowen and Lenihan need to ensure that the risks involved carry a future return for the people’s money.
Taking equity in the banks on the basis of a guaranteed payback when the recovery comes is the only fair and moral way of ensuring that the interests of the tax-payer and the pensions of the future are protected. There is some indication that the current crisis has forced the government to make correct decisions that some years ago would have been unthinkable.
The levy of 3% on those earning in excess of €250,000 a year is a progressive move that would not have been endorsed by the centre-right FF-PD administration just a year or two ago. Other measures in the Finance Bill are also welcome where they seek to target those who can most afford to pay and who for years have availed of the numerous loopholes open to well advised millionaires.
But as sure as night turns to day the first instinct of the government has been to cut and burn across the most vulnerable in a way that has unleashed an unprecedented anger among medical card holders, students, teachers, the disabled and their carers. The cynical cuts to the budgets of the human rights commission, the combat poverty agency and the equality authority are aimed at silencing the voice of those who have been even moderately critical of government policy towards the poor and marginalised in recent years.
There are even more insidious and largely invisible cutbacks at the front line of those dealing with the appalling problems thrown up by the endemic discrimination and inequity in Irish society. Hospital beds are being closed at an alarming rate and schools in the most marginalised communities are losing teachers and language assistants where they are most needed. Those tackling the latest heroin epidemic in the country‘s poorest areas through the various drugs partnerships have been starved of resources in the recent round of budgetary slashing. This will feed the culture of drugs and armed crime which is evidently out of control in several city areas.
As opinion polls show a rapid downward spiral in fortunes for the Taoiseach, Brian Cowen, and his party those seeking a more radical and realistic political alternative based on programmes of fairness and equality that enhance democracy and the quality of life of working people must hope for something better than that on offer from Enda Kenny and his Fine Gael friends.
Does anybody really believe that Fine Gael can lead the country out of recession and towards a fairer society? Kenny’s latest solution is clearly based on further cuts in the standard of living aimed at those with least to give. His plan for a pay freeze and the abandonment of the partnership agreement must have sent shivers down the spine of Eamon Gilmore whose support Kenny will almost certainly require if he is to form an alternative government.
The more confident Fine Gael become the more they shift to the right with austerity politics and a blinkered obsession with law and order that fails to recognise the underlying causes of, and solutions to, crime. Gilmore will undoubtedly be kingmaker after the next election which could well take place not long after the local and European polls next year.
With the shape of Irish politics facing a radical reconstruction in the wake of the current economic crisis Enda Kenny has an opportunity to break the traditional hold of the two main right-wing blocs and develop a broader, progressive and democratic alternative. That requires a courage and determination which has been markedly absent from his predecessors over the past four decades.
By Frank Connolly
