Brian's Blog tag:www.planware.org,2009-09-09:/briansblog//2 2012-05-12T09:52:10Z Movable Type Commercial 4.25 Dept of Finance and Nama tag:www.planware.org,2012:/briansblog//2.278 2012-05-12T09:48:29Z 2012-05-12T09:52:10Z the document also indicates that the Department's role is simply to provide "independent, impartial and well informed advice" (and about time too). This mixing of altruistic goals and practical actions permeates the document. Brian The Department of Finance's recent strategy statement indicates that it aims to increase employment, ensure sound finances, raise living standards, address the international debt and restructure the banks. In reality, it will do nothing of the sort as the document also indicates that the Department's role is simply to provide "independent, impartial and well informed advice" (and about time too). This mixing of altruistic goals and practical actions permeates the document.

For example, on Nama it states that the Department will "insist on the highest standards of transparency in the operation of NAMA, on reduction in the costs associated with the operation of NAMA, and that decision-making in NAMA does not delay the restoration of the Irish property market".  Sounds impressive but why didn't it simply state that it will extend Freedom of Information to Nama, cut outrageous fees paid by Nama and stop it trying to rig the market.

Letter published in the Irish Times on 12th May 2012.

]]> Constitution and Fiscal Compact tag:www.planware.org,2012:/briansblog//2.277 2012-05-10T13:21:44Z 2012-05-14T11:11:48Z we are being urged in the current referendum to deliver key aspects of our Constitution and lawmaking not to the EU but into the hands of an international treaty led by so called bodies competent where our influence is likely to be minimal by comparison with the Commission. Brian The constitutional amendment for the Lisbon Treaty made numerous references to our membership of the EU. It also referred to the EU's authority to pass laws alongside other competent bodies under the Lisbon and related treaties.

The proposed amendment for the Fiscal Compact makes no mention of EU or prior treaties and indicates that  unspecified "bodies competent" can pass laws or measures for Ireland. This begs questions as to whether the Fiscal Compact should be viewed as an EU or international  treaty and whether these bodies competent might be same ones that are driving the EU into a depression by insisting that austerity is the only way forward.

It is extraordinary that Ireland eventually agreed to the Lisbon Treaty in a second referendum partly because we were promised a permanent Irish Commissioner. Yet today, the entire Commission seems to have been pushed aside by banking and political forces and we are being urged in the current referendum to deliver key aspects of our Constitution and lawmaking not to the EU but into the hands of an international treaty led by so called bodies competent where our influence is likely to be minimal by comparison with the Commission.

Letter published in the Irish Times on 10th May 2012.

See also:

]]> Message to TDs about European Stability Mechanism tag:www.planware.org,2012:/briansblog//2.275 2012-05-05T09:59:31Z 2012-05-10T13:32:02Z I call on all TDs, irrespective of their party, to respect the wishes of the electorate in the event of a NO vote in the referendum by refusing to ratify the closely related ESM treaty. Brian I sent the following message about the ESM to all TDs on 4th May 2012:

In case you missed it, I had a letter about possible outcomes to the referendum published in the Irish Times on 2nd May [see a copy in entry immediately below].

I call on all TDs, irrespective of their party, to respect the wishes of the electorate in the event of a NO vote in the referendum by refusing to ratify the closely related ESM treaty.

To do otherwise would be a flagrant breech of democratic principles and an insult to voters.

If the referendum is rejected and Ireland has difficulty securing a second bailout, it will be forced to batten down all hatches to preserve cash and reduce outflows. Once in this type of of sovereign examinership, it would be legitimate to suspend all unnecessary payments to creditors including those related to the promissory notes and to defer bond repayments even if these actions might trigger a default. As this would have major adverse consequences for the euro, the EU/ECB/IMF would be forced to provide a second bailout, even if the ESM is closed off to Ireland, to prevent contagion, if for no other reason. This bailout will have to include a stimulation package as well as massive relief on debt linked to the bank bailouts as without these the EU/ECB/IMF might as well pour their support down the drain.

If, on the other hand, Ireland ratifies the ESM, it will have to make a contribution of €11 billion. As this money will have to be borrowed, the ESM will effectively return the €11 billion as part of a second bailout. This will push Ireland's debt/GNP ratio to well in excess of 150 per cent - a level which is absolutely unsustainable and unmanageable in the absence of massive debt write offs and stimulation measures.

Thanks for reading this. Hopefully it will generate the response being requested.

]]> Fiscal Compact and European Stability Mechanism tag:www.planware.org,2012:/briansblog//2.274 2012-05-04T09:38:42Z 2012-05-04T09:44:46Z Whilst Ireland doesn't have a veto on the Fiscal Compact, the Government could easily defer ratification of the critical ESM treaty over which Ireland would have a blocking vote if supported by other States who together contribute at least 8.5% of the ESM's capital. Brian In the event of a Yes vote [in the forthcoming referendum on the Fiscal Compact], the Government would be entitled to proceed with ratification of the ESM treaty as this would reflect the democratic will of the majority of voters.

However, in the event of a No result, Ireland would be cut off from ESM funding because of a condition within the Fiscal Compact. Whilst Ireland doesn't have a veto on the Fiscal Compact, the Government could easily defer ratification of the critical ESM treaty over which Ireland would have a blocking vote if supported by other States who together contribute at least 8.5% of the ESM's capital. This would force the EU and ECB to offer meaningful proposals to ease Ireland's unfair and unsustainable bank debt burden which, to date, has been effectively ignored by them.

Arguably, this could lead to a second referendum on the Fiscal Compact which might also lead to ratification of the ESM treaty.

Letter published in the Irish Times on 2nd May 2012.

]]> Mahon Tribunal tag:www.planware.org,2012:/briansblog//2.273 2012-04-02T09:36:48Z 2012-04-02T09:45:38Z Mahon Tribunal was hearing evidence about corruption and wrong doing, about a 100 people - politicians, bankers, senior administrators and developers - were engaged, directly or indirectly, in stoking a crisis that has brought the country to the edge of bankruptcy. Brian At the same time that the Mahon Tribunal was hearing evidence about corruption and wrong doing, about a 100 people - politicians, bankers, senior administrators and developers - were engaged, directly or indirectly, in stoking a crisis that has brought the country to the edge of bankruptcy. But, instead of being subjects of a major public enquiry and sanctions, these people have secured huge pensions, payoffs and bailouts.

At the very same time that the Mahon Report was published, the Central Statistics Office reported that our national economy (i.e. GNP) has declined by 14.8 percent over the past four years. This points to a continuing deep depression, rather than a mere recession - or even a recovery as some vested interests, here and abroad, would like to spin.

Nothing can change until everything has been changed.

Letter published in the Sunday Business Post on 1st April 2012.

]]> Follow either Greece or Iceland tag:www.planware.org,2012:/briansblog//2.272 2012-03-05T11:04:11Z 2012-03-05T18:04:29Z Ireland, in the absence of a general economic upturn, will also require a second bailout given that our Debt/GNP ratio, which excludes multi-national profits, currently exceeds140 percent. Brian Greece has now signed up for a second bailout accompanied by massive haircuts for bondholders, Given that its projected Debt/GDP ratio might decline - with luck - from 160 percent to 129 percent by 2020, a third bailout or even deeper crisis seems inevitable.

Many commentators expect that Ireland, in the absence of a general economic upturn, will also require a second bailout given that our Debt/GNP ratio, which excludes multi-national profits, currently exceeds140 percent.

It is high time to start thinking outside the box and to do a deal with the Devil, i.e. get the more realistic and enlightened IMF to underwrite fully any possible second bailout, instead of relying on the restrictive European Stability Mechanism.

On the foot of this, new terms should be imposed on bondholders and promissory notes, thereby easing the task of sorting out the self-inflicted domestic deficit.

Based on Iceland's rapid recovery from its crisis, we could transform that derogatory phrase -  "The difference between Iceland and Ireland is one letter and six months" - into something much more positive. The alternative seems to be death by a thousand cuts, like Greece, with no certainty of recovery.

Letter published in the Sunday Business Post on 5th March 2012.

]]> Referendum on European treaty tag:www.planware.org,2012:/briansblog//2.271 2012-03-04T11:19:51Z 2012-03-05T18:06:18Z The country should turn directly to the more realistic and enlightened IMF and, with its support, impose tough new conditions on the Promissary Notes Brian For me, a decision to vote yes in the forthcoming referendum will hinge on the willingness of the EU and ECB to assume responsibility for the cost of bailing out Anglo. I appreciate that if Ireland votes No, we will be denied access to the restrictive European Stability Mechanism in the highly likely event that a second bailout  is needed.

To address this, the country should turn directly to the more realistic and enlightened IMF and, with its support, impose tough new conditions on the promissory notes and get on with the task of sorting out the self-inflicted domestic deficit.

Letter published in the Irish Times on Friday 3rd March 2012.

]]> Paying Bondholders and Bankruptcy tag:www.planware.org,2012:/briansblog//2.268 2012-02-07T18:47:07Z 2012-02-16T15:15:31Z diversionary bond swap on the very day that it extracts €1.25 billion from our pockets to repay bonds in a defunct bank. Brian Congratulations are due to the National Treasury Management Agency for creating a diversionary bond swap on the very day that it extracts €1.25 billion from our pockets to repay bonds in a defunct bank.

Any chance that Ireland could avail of the new bankruptcy proposals given that it has an unsustainable level of debt and clearly falls into the "can't pay" category?

Letter published in the Irish Times on 27th January 2012.

]]> Taoiseach at Davos tag:www.planware.org,2012:/briansblog//2.267 2012-02-07T18:41:28Z 2012-02-16T15:13:32Z Taoiseach resorted to blaming "people" at Davos and reenforcing the image of the Irish as feckless and greedy. Brian Given that we haven't yet had a proper enquiry into the banking crisis, I am not surprised that the Taoiseach resorted to blaming "people" at Davos, reinforcing the image of the Irish as feckless and greedy.

Instead, he should have  been upfront and honest by singling out sections of the establishment and business "elite" including ministers, public administrators, bankers, developers and foreign lenders as the greedy incompetents who "went mad"  and failed the "people". However, this would have probably gone down like a lead balloon with the Davos "elite".

Letter published in the Sunday Business Post on 5th February 2012.

]]> Nama: Additional Disclosures based on Par Value of Loans tag:www.planware.org,2012:/briansblog//2.265 2012-01-23T11:35:58Z 2012-03-15T13:59:54Z Nama has advised the PAC that, having considered my suggestion that Nama publish "shadow" proforma accounts including a P&L and Balance Sheet based on the par value of loans, Nama will in consultation with the C&AG provide additional disclosures in respect of the movement of the par value of loans in Nama's 2011 Annual Report and Accounts. Brian As readers of this blog will know, I have been concerned about the accounting method used by Nama and have campaigned for more transparent accounts based on the par value of loans acquired (in excess of €71 billion) and full disclosure of written down/off loans and interest.

My campaign included writing to Nama's board, Minister for Finance, EU Commission (twice) and, more recently, the Comptroller and Auditor General (C&AG) and Public Accounts Committee (PAC). See Nama's Accounts and the Comptroller & Auditor General and linked items.

At its meeting on 1st December 2011, the PAC considered my correspondance and invited Nama and the Department of Finance to respond. In reply the CEO of Nama has advised the PAC that, having considered my suggestion that Nama publish "shadow" proforma accounts including a P&L and Balance Sheet based on the par value of loans, Nama, in consultation with the C&AG, "will provide such additional disclosure in respect of the movement in the par value of Nama's acquired loans in our 2011 Annual Report and Accounts". See Nama's letter dated 4th January 2012 to the PAC.

Hopefully, these disclosures will include "shadow" proforma accounts which will highlight the full extent of writedowns on the loans acquired at a huge discount by Nama. Ultimately, the losses could amount to €50 billion inclusive of this discount and related interest write offs.

The reporting of these losses by Nama would be a reminder (if one is needed) of the greed, recklessnes and incompetence of many of our leading developers, bankers, politicans and public officials and of the virtual total absence of "moral hazard", public enquiry and pursuit of possible wrongdoing.

More positively, the reporting will help increase accountability, transparency and openness and facilitate better oversight by the Dail and PAC of Nama's activities. It will also bring into focus the desirability, for the avoidance of doubt and to make matters crystal clear, of changing Nama's legislation to explicity state that maximising the recovery of original debts, over and above the actual cost of acquiring loans and recovering expenses, is an objective under Section 10 Subsection (2) (c) of the Nama Act.

Updates:

There has been some media coverage following publication of this entry:

Some additional comments:

1. What would be the impact on Nama's accounts?

Suppose Nama acquires a €100m loan for €30m and is repaid €30m after 3 years. Arguably, it has discretion, based on its current accounting method, as to how it allocates the sum received between principal and interest. For example, it could say that it has broken even on the loan, ignore the loss of interest and report breakeven before deducting its overheads.

If shadow accounts are created Nama would have to explicitly account for BOTH the capital loss (€70m) and contracted interest written off of, say, €12m (€100m at 4% for 3 years) making a total loss of €84m in contrast to breakeven. Henceforth, we could see headlines indicating that, while Nama might report breakeven using its accounting method, it will have incurred a massive loss in the shadow accounts. This loss would be a huge wakeup call to all concerned.

2. Will additional disclosure make a real difference?

Hard to say because Nama is really captive to future market and economic conditions. However, the reporting of the huge losses based on shadow accounts will highlight the need for Nama to recover the absolute maximum amounts from borrowers, minimise expenses, manage its assets effectively and "play the market" successfully when disposing of assets over the coming years. This will put pressure on Nama and its clients to perform to the maximum (rather than targeting breakeven) and might, just might, result in a lower eventual loss.

]]> Don't Pay Anglo Bondholders tag:www.planware.org,2012:/briansblog//2.263 2012-01-15T11:57:30Z 2012-01-15T12:03:29Z Irish taxpayers are entitled to expect the Government to stand up for their rights and to either refuse to redeem the bond or to pay on the back of an explicit quid pro quo from the ECB if the latter wishes to avoid contagion. Brian I wish to protest at the planned redemption at par value of a €1.25 billion bond on 25th January by Irish Bank Resolution Corporation, formerly Anglo, Given that this unsecured, unguaranteed bond traded at less 60 percent of par within the past year, why is the Government redeeming this bond at par notwithstanding that the issuing bank is insolvent and being liquidated?

The proposed payment is equivalent to the salaries of 5,000 extra nurses for five years; or one-third of the cuts and tax increases in the 2012 budget: or the full cost of TWO new national children's hospital. Instead, the money will be used to reimburse anonymous bondholders who provided funds at the peak of the boom to a bank which operated as a virtual casino.

Irish taxpayers are entitled to expect the Government to stand up for their rights and to either refuse to redeem the bond or to pay on the back of an explicit quid pro quo from the ECB if the latter wishes to avoid contagion. To this end, I call for an unwhipped Dail debate where isms, ologies, outdated manifestos and failed policies are, for once, put aside in the national interest and where the bond redemption and related economic and social policies are reviewed in an open, honest way.

It will be patently obvious to any TDs who held clinics during the Dail recess that current policies are failing and that redemption of the bond will simply add costly fuel to a fire which is currently smoldering but could easily get out of control.

Letter published in the Irish Times on 10th January 2012.

See also Another Letter to TDs about Anglo Bonds.

]]> Another Message to TDs about Anglo Bonds tag:www.planware.org,2012:/briansblog//2.262 2012-01-05T21:49:31Z 2012-01-22T21:01:16Z Given that this unsecured and unguaranteed bond traded at less 60 percent of par within the past year, why is the Government redeeming this bond at par given that the issuing bank is insolvent and being liquidated? Brian I sent the following email to all TDs today regarding the next redemption of Anglo bonds:

Dear Deputy

I wish to protest at the planned redemption at par value of a €1.25 billion bond (ISIN ref. XS0283695228) on 25th January by Irish Bank Resolution Corporation, formerly Anglo,

Given that this unsecured and unguaranteed bond traded at less 60 percent of par within the past year, why is the Government redeeming this bond at par given that the issuing bank is insolvent and being liquidated?

The proposed payment is equivalent to the salaries of 5,000 extra nurses for five years; or one-third of the cuts and tax increases in the 2012 budget: or the full cost of TWO new national children's hospital.

Instead, the money will be used to give windfall profits to so-called sophisticated but anonymous bondholders who provided funds at the peak of the boom to a bank which operated as a casino and which, thankfully, no longer trades.

Irish taxpayers are entitled to expect public representatives and Government to stand up for their rights and to either refuse to pay or negotiate a quid pro quo with the ECB if it wishes to avoid contagion.

What's needed from TDs is an unwhipped parliamentary debate where isms, ologies, outdated manifestos and failed policies are, for once, put aside in the national interest and where fundamental issues underlying the bond redemptions are considered in an open and honest way.

For example, a free vote in the Dail when it resumes next week in favour of a 50% discount on redemption might "frighten the horses" enough to allow the NTMA repurchase the Anglo bonds at, say, 60/100 and save the taxpayer about €500 million without any default arising. Not a bad morning's work in the Dail.

Brian

Here is the text of a previous message sent on 30th October 2011 to TDs about the redemption of Anglo bonds worth approximately €750 million. So, if the January bonds are redeemed at par, the Irish taxpayer will have redeemed unsecured, unguaranteed bonds amounting to about €2 billion since November 2011. To put this in context, the Government announced in December 2011 a savage budget which will raise taxes and make savings for the Exchequer amounting to €3.6 billion during 2012.

See also Don't Pay Anglo Bondholders.

Here is an uptodate and corrected list of TDs as at 22nd January 2012. To help ensure delivery, it has been divided into four parts.

]]> gerry.adams@oireachtas.ie, james.bannon@oireachtas.ie, sean.barrett@oireachtas.ie, tom.barry@oireachtas.ie, richard.boydbarrett@oireachtas.ie, pat.breen@oireachtas.ie, tommy.broughan@oireachtas.ie, john.browne@oireachtas.ie, richard.bruton@oireachtas.ie, joan.burton@oireachtas.ie, ray.butler@oireachtas.ie, jerry.buttimer@oireachtas.ie, catherine.byrne@oireachtas.ie, eric.byrne@oireachtas.ie, dara.calleary@oireachtas.ie, ciaran.cannon@oireachtas.ie, joe.carey@oireachtas.ie, paudie.coffey@oireachtas.ie, aine.collins@oireachtas.ie, joan.collins@oireachtas.ie, niall.collins@oireachtas.ie, michael.colreavy@oireachtas.ie, michael.conaghan@oireachtas.ie, sean.conlan@oireachtas.ie, paulj.connaughton@oireachtas.ie, ciara.conway@oireachtas.ie, noel.coonan@oireachtas.ie, marcella.corcorankennedy@oireachtas.ie, joe.costello@oireachtas.ie, simon.coveney@oireachtas.ie, barry.cowen@oireachtas.ie, michael.creed@oireachtas.ie, lucinda.creighton@oireachtas.ie, sean.crowe@oireachtas.ie, clare.daly@oireachtas.ie, jim.daly@oireachtas.ie, john.deasy@oireachtas.ie, jimmy.deenihan@oireachtas.ie, pat.deering@oireachtas.ie, pearse.doherty@oireachtas.ie, regina.doherty@oireachtas.ie, stephen.donnelly@oireachtas.ie, ######################################## timmy.dooley@oireachtas.ie, robert.dowds@oireachtas.ie, andrew.doyle@oireachtas.ie, bernard.durkan@oireachtas.ie, dessie.ellis@oireachtas.ie, damien.english@oireachtas.ie, alan.farrell@oireachtas.ie, frank.feighan@oireachtas.ie, anne.ferris@oireachtas.ie, martin.ferris@oireachtas.ie, frances.fitzgerald@oireachtas.ie, peterm.fitzpatrick@oireachtas.ie, charles.flanagan@oireachtas.ie, lukeming.flanagan@oireachtas.ie, terence.flanagan@oireachtas.ie, sean.fleming@oireachtas.ie, tom.fleming@oireachtas.ie, eamon.gilmore@oireachtas.ie, noel.grealish@oireachtas.ie, brendan.griffin@oireachtas.ie, john.halligan@oireachtas.ie, dominic.hannigan@oireachtas.ie, noel.harrington@oireachtas.ie, simon.harris@oireachtas.ie, brian.hayes@oireachtas.ie, tom.hayes@oireachtas.ie, seamus.healy@oireachtas.ie, michael.healy-rae@oireachtas.ie, martin.heydon@oireachtas.ie, joe.higgins@oireachtas.ie, phil.hogan@oireachtas.ie, brendan.howlin@oireachtas.ie, heather.humphreys@oireachtas.ie, kevin.humphreys@oireachtas.ie, derek.keating@oireachtas.ie, colm.keaveney@oireachtas.ie, paul.kehoe@oireachtas.ie, billy.kelleher@oireachtas.ie, alan.kelly@oireachtas.ie, enda.kenny@oireachtas.ie, sean.kenny@oireachtas.ie, seamus.kirk@oireachtas.ie, michael.kitt@oireachtas.ie, ######################################## sean.kyne@oireachtas.ie, anthony.lawlor@oireachtas.ie, michael.lowry@oireachtas.ie, ciaran.lynch@oireachtas.ie, kathleen.lynch@oireachtas.ie, john.lyons@oireachtas.ie, padraig.maclochlainn@oireachtas.ie, eamonn.maloney@oireachtas.ie, micheal.martin@oireachtas.ie, peter.mathews@oireachtas.ie, michael.mccarthy@oireachtas.ie, charlie.mcconalogue@oireachtas.ie, marylou.mcdonald@oireachtas.ie, shane.mcentee@oireachtas.ie, nicky.mcfadden@oireachtas.ie, dinny.mcginley@oireachtas.ie, finian.mcgrath@oireachtas.ie, mattie.mcgrath@oireachtas.ie, michael.mcgrath@oireachtas.ie, john.mcguinness@oireachtas.ie, joe.mchugh@oireachtas.ie, sandra.mclellan@oireachtas.ie, tony.mcloughlin@oireachtas.ie, michael.mcnamara@oireachtas.ie, olivia.mitchell@oireachtas.ie, mary.mitchelloconnor@oireachtas.ie, michael.moynihan@oireachtas.ie, michelle.mulherin@oireachtas.ie, catherine.murphy@oireachtas.ie, dara.murphy@oireachtas.ie, eoghan.murphy@oireachtas.ie, gerald.nash@oireachtas.ie, denis.naughten@oireachtas.ie, dan.neville@oireachtas.ie, derek.nolan@oireachtas.ie, michael.noonan@oireachtas.ie, patrick.nulty@oireachtas.ie, caoimhghin.ocaolain@oireachtas.ie, eamon.ocuiv@oireachtas.ie, sean.ofearghail@oireachtas.ie, ################################################### aodhan.oriordain@oireachtas.ie, aengus.osnodaigh@oireachtas.ie, jonathan.obrien@oireachtas.ie, willie.odea@oireachtas.ie, kieran.odonnell@oireachtas.ie, patrick.odonovan@oireachtas.ie, fergus.odowd@oireachtas.ie, john.omahony@oireachtas.ie, joe.oreilly@oireachtas.ie, jan.osullivan@oireachtas.ie, maureen.osullivan@oireachtas.ie, willie.penrose@oireachtas.ie, john.perry@oireachtas.ie, ann.phelan@oireachtas.ie, johnpaul.phelan@oireachtas.ie, thomas.pringle@oireachtas.ie, ruairi.quinn@oireachtas.ie, pat.rabbitte@oireachtas.ie, james.reilly@oireachtas.ie, michael.ring@oireachtas.ie, shane.ross@oireachtas.ie, brendan.ryan@oireachtas.ie, alan.shatter@oireachtas.ie, sean.sherlock@oireachtas.ie, roisin.shorthall@oireachtas.ie, brendan.smith@oireachtas.ie, arthur.spring@oireachtas.ie, emmet.stagg@oireachtas.ie, brian.stanley@oireachtas.ie, david.stanton@oireachtas.ie, billy.timmins@oireachtas.ie, peadar.toibin@oireachtas.ie, robert.troy@oireachtas.ie, joanna.tuffy@oireachtas.ie, liam.twomey@oireachtas.ie, leo.varadkar@oireachtas.ie, jack.wall@oireachtas.ie, mick.wallace@oireachtas.ie, brian.walsh@oireachtas.ie, alex.white@oireachtas.ie, Budget for 2012 tag:www.planware.org,2011:/briansblog//2.261 2011-12-17T10:26:57Z 2011-12-17T10:31:29Z introduce a third tax band for salaries above €100,000, apply a salary limit of €150,000 across the entire public sector and limit pensions in the sector to half that. Such measures would be much fairer than increasing VAT, introducing new stealth taxes and cutting key services and capital expenditure. Brian Given that the Minister for Finance has claimed on numerous occasions that all the low hanging fruit has been picked, why doesn't he start plucking some of the ripe, plump fruit off the highest branches? He could also give the tree a good shake and make substantial saving by cutting off dead branches and pruning back at all levels.

For example, he could introduce a third tax band for salaries above €100,000, apply a salary limit of €150,000 across the entire public sector and limit pensions in the sector to half that. Such measures would be much fairer than increasing VAT, introducing new stealth taxes and cutting key services and capital expenditure. Given that the country is effectively bankrupt, force majeure should take precedence over legitimate expectations or entitlements and it makes no sense to increase borrowings and pay additional interest simply to allow those at the top of the tree to over-ripen.

Letter published in the Irish Times on 22nd November 2011. A somewhat similar letter was published in the Sunday Business Post on 13th November 2011.

]]> Nama's Accounting Methods and the Comptroller & Auditor General tag:www.planware.org,2011:/briansblog//2.259 2011-11-15T15:57:55Z 2011-12-07T11:48:32Z Nama is using an accounting method which effectively "buries" the losses incurred (aka the "discount") on loans acquired from the covered banks. Brian Over the past year, I have expressed deep concern about Nama's accounting methods to Nama's chairman and board, EU Commissioners and the Minister for Finance in a series of letters - see Nama and Creative Accounting for details.

My complaint is that Nama is using an accounting method which effectively "buries" the losses incurred (aka the "discount") on loans acquired from the covered banks.

The furore over the recent "discovery" of €3.6 billion in the national accounts is nothing compared with the "disappearance", I reckon, of about €50 billion (i.e. €50,000,000,000) within Nama's accounts. I understand that the Comptroller and Auditor General is considering the inclusion of this "loss" in Nama's accounts in some shape or fashion.

Against this background, I wrote to the C&AG on 1st November and suggested that, in the interest of openness and transparency, his office should consider producing "shadow" pro-forma annual accounts for Nama showing its acquired loans at par value and indicating the full extent of loan and interest write downs/offs. Here is a copy of my letter to the Comptroller and Auditor General. 

This proposal would help identify the full extent of the developers' bailout and losses incurred by the covered banks during the bubble years.

Nama's "forgive and forget" approach can be contrasted to the Government's treatment of mortgage holders who through unemployment etc. cannot meet repayments - see Debt Forgiveness Discrimination.

Update:

Having reviewed the full transcript of a meeting of the Dail's Public Accounts Committee with Nama and the C&AG on 26th October 2011, I have written directly to the PAC drawing attention to my letter to the C&AG and related correspondence. This was published at the PAC's meeting on 1st December and forwarded to the Department of Finance and Nama for comment.

]]> Ministerial Pensions are a Gravy Train tag:www.planware.org,2011:/briansblog//2.257 2011-11-13T10:41:30Z 2011-11-13T10:45:55Z Former ministers will receive annual pensions averaging €81,000 and costing €8.8 million a year. This could .... Brian Former ministers will receive annual pensions averaging €81,000 and costing €8.8 million a year. This could amount to €80 million over the next decade and must be funded by new borrowings and additional taxation to cover interest charges and eventual repayments.

In accepting these pensions, do these former ministers not realise that the State is effectively bankrupt thanks, in some cases, to their mismanagement and incompetence?

Letter published in the Irish Times on 11th November 2011.

]]>