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Greece Places More Pressure on Europe

Late Monday night Greek Prime Minister George Papandreou announced that his government would hold a referendum to decide on the EU-IMF debt programme they had negotiated. If rejected by the Greek electorate it could lead to increased risk of a forced Greek sovereign default, potential exit from the Euro and ultimately place severe pressure on the stability of the euro zone.

Janis Emmanouilidis, a Greek-German analyst with the European Policy Centre in Brussels said:

“It’s as if he (Papandreou) set off a bomb under the whole continent,”.

The negotiating of the deal agreed with Greece had caused much consternation within the euro zone with many countries uncomfortable agreeing to the level of concessions being granted to Greece, especially in agreeing to take a 50% reduction in the return on Greek bonds. When a deal was eventually reached it was believed this would be the end of the Greek dilemma for the EU yet this act by Papandreou has caught EU officials off-guard and caused more panic in the market.

The decision to go to the polls lead to the Euro closing on Tuesday 3% down against the dollar from where it had opened on Monday morning. Michael Derks of FxPro(foreign exchange traders) said

“the current situation is bordering on a farce of epic proportions and the reaction in financial markets reflects this,” .

Ratings agency Fitch released a statement Tuesday stating that a rejection of the deal by Greece would have severe financial implications for the financial stability and viability of the
euro zone.”

Criticism has also been forthcoming from other EU officials, especially in France and Germany where officials admit they were caught off guard by Mr. Papandreou’s decision to put the deal to a vote in Greece.

Rainer Brüderle, former economy minister and leader of the liberal Free Democrats who are part of Angela Merkel’s ruling coalition said: It sounds as if someone is trying to wriggle out of what had been agreed,”.

French President Nicolas Sarkozy called Mr. Papandreou’s decision “incomprehensible” and “totally irresponsible”.  He went on to reiterate that the only way to solve Greece’s debt problem was for them to adopt the deal that had been agreed last week. This point was seconded by German officials who stated that there is no question of renegotiating the deal should the Greek electorate not approve of it.

“Announcing something like this only days after the summit without consulting other euro zone members is irresponsible,” Slovak finance minister Ivan Miklos said. Irish Minister for European Affairs Lucinda Creighton said that this grenade had been thrown just a few days after the European summit was meant to have dealt with the uncertainty in the euro zone.

 

Mr. Papandreou was summoned to a meeting today with furious European Leaders where he will be asked to explain himself and according to German officials, have the “riot act” read to him.

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Upcoming Referenda

Referendum

Tomorrow,on the same day as the Presidential election, we will be asked to vote on two referenda. One is on the issue of judicial pay and whether judges salaries should be reduced in line with the reduction enforced upon other civil servants. The other relates to the powers of the Houses of the Oireachtas to conduct an enquiry into any matter stated by the House or Houses involved to be of public importance. Unfortunately due to the levels of media attention given to the Presidential Election and the candidates in the race, very little focus has been placed on these proposed changes to our constitution. Also, unfortunately ( or perhaps fortunately as some politicians may see it) there has been very little political debate on either of these two issues in the run up to their being voted on.

For

This proposed amendment may well have appeared out of a growing public frustration with the prolonged, fruitless and expensive tribunals this country has seen in it’s recent history. These tribunals, which have been left up to the legal profession themselves to conduct, have been seen in many circles as a failure. Earlier this year the Public Accounts Committee (PAC) estimated that the cost to the State of the three tribunals of inquiry (Mahon,Morris,Moriarty) could be as much as €366m. Further insult was added to injury when reports emerged that those who appeared before the Moriarty tribunal may in fact be able to have their legal costs paid by the State as a result of judgments made by the Supreme Court made in the builders JMSE case against the Mahon/Flood tribunal in April of last year. These may include Micheal Lowry, Frank Dunlop and other persons who came before the Tribunals who were considered to have obstructed the tribunals. The PAC also found that five senior councils have been paid more than €5m for their work on Tribunals.

Committee Chairman, Bernard Allen TD said;

“The cost to the taxpayer for these tribunals and other legal services obtained by the State is astronomical. We need to achieve far greater value for money in procuring legal counsel. To accomplish this, competitive tendering should be made mandatory for legal services to the State. This will see a greater number of legal service providers competing for work and lead to lower prices.”

Further, in response to criticism during the week by eight former attorney’s general Minister for Justice Alan Shatter claimed these individuals had a vested interest because of the substantial fees that had been earned by the bar library as a result of the tribunal system. This point was echoed by Minister for Transport Leo Varadkar who said “it sounds to me like a bunch of lawyers looking to protect their incomes.

Those campaigning for a “yes” vote on the issue also say that this proposal would put us on an equal footing with how things are done internationally, as it will provide the Oireachtas with comparable inquiry powers to parliaments across the world. For example, in the U.S. Senate, all-party committees are formed to investigate companies/people/issues within the national interest and are seen as an important function of the Senate.

Indeed this all-party committee system would be a feature of the proposed enquiry powers, a feature that Brian Walsh T.D. believes has worked well, citing the example of the aforementioned PAC and it’s tackling of the issue of overspending in FÁS.

Furthermore, for those in the last General Election calling for a reform of politics in Ireland, a call Fine Gael said they would answer, this should be seen as the beginning of that. These Tribunals have been nothing short of a disaster, that much is widely acknowledged. Old politics in this country got us into the dire state we’re in, here is a chance to begin changing it.

Against

Perhaps the most common complaint against this proposal is the manner in which it has been rushed through without much debate. It was only quite recently that any attention was given to the two referenda to be decided on, in part due to the focus on the Presidential race. With regard to the proposed Oireachtas Inquiries amendment, greater discussion and debate is surely needed on an issue that ‘would give politicians judges’ powers’ according to senior counsel Oisin Quinn. The Irish Council for Civil Liberties (ICCL) which is spearheading the “no” campaign has called this proposed amendment rushed, ill-considered and failing to strike the right balance between the public interest and the rights of the individual.

The right of citizens to have disputes between them and the Oireachtas decided independently has been called into question by eight former attorneys general. The eight include Peter Sutherland, Michael McDowell and Paul Gallagher. Interestingly Mr. Gallagher is the immediate past Attorney General who advised the Fianna Fail/Green coalition that a referendum was needed to reduce judges’ pay. These eight have taken particular issue with the wording of the proposed legislation, which may be so open as to allow it to be manipulated in the future. This is a worry shared by former Senator Joe O’Toole who believes it is dangerous to change the Constitution in a way that does not limit what can be done by legislation in the future.

The Dáil’s Technical Group, composed of mainly independent TD’s has also urged for a “no” vote on this referendum on Oireachtas Inquiries. Chairman of the Group, Finian McGrath believes that it could hamper the work of the courts while Deputy Thomas Pringle stated his worry that the proposal gives the government of the day too much power to use these investigations for their own advantage. It is this latter point that is quite worrying.

Fine Gael leader Enda Kenny has said there is no intention of overstepping the mark with the powers provided by the new proposal, and there is no reason to doubt that. However, the worry arises over the possibility for future governments to abuse these powers. Would this new legislation give powers to the government of the day to investigate and publicly condemn their enemies? Also, if the outcome of an Oireachtas investigation was damning to a number of parties or high ranking members of parties can we count on these issues to be publicly exposed at the cost of a party or government?

Peter Mullan, joint managing partner of leading law firm Garrett Sheehan, spoke to The Independent of his fears on just this issue stating : “There are a number of political decisions that certain politicians would like to defend/Can we be absolutely certain that they (politicians) are going to be impartial?”

This point has been echoed by Green Party Dublin West candidate and lecturer in Constitutional law, Roderic O’Gorman. He further adds two more aspects of the proposed legislation which worry him. Firstly, that the Courts’ power to intervene if TDs or Senators decide to limit individuals procedural rights will be significantly lessened. Secondly, is that the new article is extremely vague on the rights individuals appearing before these inquiries receive; “Will their rights be set out in legislation, or will these be devised by each separate committee of inquiry as they go along?” he said.

Decisions

Somewhere in the brief recent arguments for and against the proposed 30th amendment to our Constitution you have seen or heard one thing which is enough for you to have made up your mind in one way or another. Perhaps you feel it’s time for change to the structure of politics to begin, perhaps you have had enough of costly tribunals and will vote “Yes”? Or perhaps you are wary of a potential “Big Brother” effect and removing power from the courts so you will vote “no”? Or maybe you feel there has not been enough debate on the issue and do not want to change the Constitution without feeling more certain of what change is being brought in, in that case “no” change may be safer for now.

Social Entrepreneurs Inspiring Change

Michael Kelly, Séan Coughlan,Niamh Gallagher, Michelle O'Donnell Keating, Tommy Breen, Sean Love


At a time of such negativity in this country it is refreshing to be in a situation where you are completely immersed in positivity. That was the atmosphere at the Social Entrepreneurs Ireland awards last night where 8 groups were awarded for their efforts to improve Irish society.

Social Entrepreneurs Ireland is a foundation that directly supports high potential social entrepreneurs to enable them to maximise their impact. Since launching in 2005 Social Entrepreneurs Ireland has supported 150 social entrepreneurs, directly investing over €4M into supporting these exceptional individuals.

At the core of their activities is their Social Impact Programme which provides financial investment and direct support to early stage social entrepreneurs through networking opportunities, increased awareness, training and an investment package up to €130,000.

Darren Ryan, Head of Engagement at Social Entrepreneurs Ireland said: “These eight social entrepreneurs have the potential to fundamentally change Ireland, and we are proud to support them on their journey. Seeing such a large crowd here tonight is a great signal of the momentum behind these individuals and the level of support that is out there for innovative ideas for social change.”

One of the supporters in attendance was An Taoiseach Enda Kenny. Mr. Kenny stated his desire to attend is due to his belief in what these people are doing for the improvement of this country, and that the outstanding work and creativity of social entrepreneurs would be vital to our future.

Chief Executive of Social Entrepreneurs Ireland, Séan Coughlan, used the attendance of an Taoiseach as an opportunity to call on the government to create a Venture Fund to harness the power of Ireland’s social innovations, a move Mr. Coughlan believes would not only solve some of Ireland’s social problems but also cut costs for the State in the long-term.

“If government and philanthropy were to come together to create a new Venture Fund then we could take the best ideas, rapidly scale them and as a result change Ireland. We have seen this type of approach work in the commercial sector, so why not for initiatives that are for public benefit?” said Mr. Coughlan.

Winners

SEI presented 3 major awards on the night, one in the area of education and literacy, one in the area of sustainability and the other  to encourage greater participation of women in politics.

Sean Love, former director of Amnesty Ireland, and writer Roddy Doyle won an award for their venture – Fighting Words, a free creative writing centre for students of all ages. The centre’s aim is to give students confidence in writing, film-making and self-expression and so far has hosted over 26,000 students with three anthologies of short stories having been published and many other film-making, playwriting and other projects have been realised.

GIY Ireland was created by Michael Kelly in 2009 with a plan to empower people from all walks of life to grow their own food and in the process strengthen communities, protect the environment and improve the nation’s general wellbeing. Such a movement would be welcome given that earlier this week in Dublin a conference on nutrition and health stated it’s finding that Ireland has one of the highest rates of obesity in Europe with more than 60% of the adult Irish population either overweight or obese at an annual cost to the State of €1.6bn.

Women For Election is an organisation set up by Niamh Gallagher and Michelle O’Donnell Keating whose vision is of an Ireland with a balanced participation of women and men in political life. Given that Women make up 52% of Ireland’s population, but they currently make up only 15% of our elected representatives it begs the question as to whether large portions of our society are not being represented in politics in Ireland today.

Another five social entrepreneurs were also recognised for their contribution to changing Ireland, and will be provided with a support package worth €35,000 each over a 12 month period. The winners of this award were Lisa Domican of Grace App; Steven Daly of Camara Ireland; Sheila Gallagher and Melissa Griffith of Green Sod Land Trust; Joan Freeman of Pieta House; and Krystian Fikert of MyMind.

Future

In such a difficult era for the nation of Ireland, a country suffering from financial difficulties and loss of economic sovereignty, it is inspiring for us all to see these brave and inventive individuals embarking and what is an arduous and uncertain journey given the frugal situation the country finds itself in. However, through their determination, foresight and creativity they are leading a charge for the improvement of society in this country, finding ways to make change happen despite the challenges and refusing to let a dire time in this nation’s history be an excuse for preventing our country from being the best it can be.

An example of a success story from one of SEI’s previous winners is Fledglings, it provides high quality, affordable early years education for the children of Tallaght West. The HighScope approach adopted by Fledglings is academically proven to have significantly better outcomes for children. The HighScope research demonstrated a social return over the life of the adult of $16 for every $1 invested in early education. The fact that parents are themselves able to take up further training or employment is a positive side-effect; the real benefit lies in the intrinsic value of the early education that the children receive.

If this country can continue to produce programmes like Fledglings that not only solve a social problem but provide a return for the State also then the benefits are obvious. Furthermore, if this country can continue to produce the calibre of people getting involved in social entrepreneurship of some form, then all is not bleak for Ireland’s future.

http://www.socialentrepreneurs.ie/


Residents Pay Price for More Developer Failings

Priory Hall Apartment Complex

 

Property owners continue paying the price of Ireland’s property bubble madness as residents of the Priory Hall apartment complex in Donaghmede, Co. Dublin were ordered to be moved to hotel accommodation due to serious fire safety risks in the apartment complex.

The residents were instructed to be evacuated yesterday by the High Court after a hearing into the safety standards in the complex found that there are serious safety concerns primarily around fire safety.

President of the High Court, Mr. Justice Nicholas Kearns ordered that the complex’s 240 residents be moved to temporary accommodation while works are carried out to address the building’s fire safety concerns. The decision was made after Mr. Kearns heard from a Dublin City Council fire safety inspector, Mr. Donal Casey, of the serious danger the buildings posed in their current condition. Mr Casey told the court last Friday that any fire could swiftly spread through the entire complex due to defects with fire safety barriers in the external walls. He also expressed concern about alleged structural deficiencies.

The property was developed by Coalport Building Company Ltd. which was represented by developer Thomas McFeely who is a director of the company. Justice Kearns stated that both the temporary accommodation and the work to the building should be paid for by McFeely and another developer – Larry O’Mahony –  although O’Mahony claims to have nothing to do with the development of the property.

Defence for Mr. McFeely stated that his client did not have the means to pay for both the accommodation and the works, with the accommodation alone thought to cost around €200,000. He did however state he has sufficient resources to cover the costs of the additional works to the property. Mr. McFeely also stated that his own consultant engineers had previously certified the building as structurally sound and that he had only learned of the fire issue during this week. This last point was refuted by Mr. Donal Casey who said that 3 fire safety notices had been served in September 2009.

Dublin County Council has also raised issues with Coalport Developments over another development, Aras Na Cluaine, in Clondalkin. In light of the Developers inability to fund the cost of accommodation for the residents the court ordered Mr. McFeely and Mr. O’Mahony to surrender their passports and file a statement of their financial affairs by this Friday. The Count Council will now pay the cost of the accommodation should it transpire that the developers are indeed lacking sufficient funds to cover the cost.

There were also heated exchanges between Mr. McFeely and a number of residents of the complex outside the Four Courts after the decision. Also, in light of these recent revelations Labour TD Sean Kenny called on Environment Minister Phil Hogan to scrap the self-regulation system brought in in 1990.

Upcoming Budget to Test Coalition?

Rumours abound of rising tensions between the governing coalition parties as a result of negotiations over the upcoming budget. This is in light of comments made my Labour TD and Minister for Energy, Pat Rabbitte who said he expects negotiations on the matter to be “extremely difficult.”

As part of the terms of Ireland’s bailout the government are committed to reducing the national budgetary deficit to a figure of 8.6 per cent of GDP. Initially it was envisaged that this figure could be reached with a budgetary adjustment  amounting to €3.6 billion, however the recently formed Fiscal Advisory Council now recommends an adjustment of €4 billion in order to reach the 8.6 per cent target.

The council is an independent public body which was created under the terms of Ireland’s bailout to monitor and advise the government on economic and fiscal matters, primarily regarding the long-term repayment of its debt. Upon analysis of the council’s recommendations it would appear it is very much of the opinion that harsh budgetary measures in the short-term should lead to long-term benefit for the country and a more rapid exit from our debt constraints.

The council recommends imposing additional cuts of €400 million along with the €4 billion in order to exceed this years targets and advises further cuts beyond those planned for the 2012-2015 budgets, in the belief that this strategy would be more beneficial to the country’s future.

The actual benefit of such severe cuts has been debated by many, some of whom believe such a contraction in the economy would actually prove to be harmful, perhaps even reducing demand and slowing recovery. This last point was even acknowledged by Minister for Finance Michael Noonan when he was questioned on the FAC’s recommendations. When speaking on the issue Mr. Noonan stated his position that the government would reach its committed targets even if “it takes more than the €3.6 billion to do so”.

It is this issue that has caused some unease with the labour party side of the coalition. Minister Rabbitte believes that these extra cuts, beyond what was planned, would actually be “counter-productive economcially”, he also stated his belief that “to do what we said we would do and to take out €3.6 billion in itself will be very, very difficult.” Minister Rabbitte also appeared to hint that any additional cuts may not have the backing of the Labour Party, stating that those proposing more cuts “wouldn’t have my support.”

Today Taoiseach EndayKenny was quick to deny any rift within the Cabinet over this issue and said that more information was required by the Government before any decision could be made.

Mr. Kenny said, “there is no split in the Cabinet. I think the question that Minister Rabbitte was asked yesterday was a clear question and was answered with the level of information that was available to him.”

RSA Finds 20% Of Youths Race on Irish Roads

Research released by the Road Safety Authority at their annual lecture showed that 20% of young drivers have raced on roads in this country.

Young male drivers have emerged from this latest research very badly. The survey of 1,500 drivers show young male drivers reported more speeding, reckless driving and use of mobile phones while driving than other motorists.

The report also found that 5,678 road users aged between 17 and 24 were killed or seriously injured on Irish roads between 1997 and 2009 and more than a third (35%) of those deaths took place between midnight and 5am.

High profile road safety campaigns and the introduction of the points system would appear to have had some positive effect with the number of road deaths for 2011 down on 2010 figures according to Garda statistics. However, despite this, reports of speeding have seen a stark rise.

Convictions for speeding have almost doubled on 2010 figures with over 96,000 people receiving points on their licence in the first four months of 2011.

Elsewhere, incidents of driving while intoxicated have dropped in the past few years with an average of 902 incidents per month reported by Gardai for this year. In 2010, there was an average of 1,000 people caught drink driving per month.

The RSA report was created by Dr. Kiran Sarma, a chartered psychologist and lecturer in psychology at NUI Galway. Dr. Sarma believes these issues with driving on our roads are not merely due to lack of strict penal procedures or speed testing equipment but more so down to people’s attitudes, he said:

“The research would suggest that addressing speeding attitudes is important but that deeper psychological factors are also linked to dangerous driving on our roads.”

Eurozone Under Pressure

Eurozone Under Pressure

The future of the Eurozone has been called into question over the last number of months due to the likelihood of Greek default, the billions already borrowed by Ireland and Greece and the tension caused by financial difficulties in Portugal, Spain, Italy and now the French banking system.

Matters will not have been helped last night as Fitch, the credit rating agency, downgraded Spain and Italy’s credit ratings due to their worsening sovereign risk profile. The downgrades will cause an increase in the cost of borrowing on the financial markets for the countries involved. It also means that countries being downgraded generally must increase the rate of return they provide on their sovereign bonds in order to entice investment in these bonds. As a result when it comes to repayment of bonds it can cause an extra financial strain having to repay at such high rates. As it stands, due to a severe lack of confidence on the part of the financial markets in Eurozone countries such as Ireland and Spain, the European Central Bank has had to buy these sovereign bonds in an effort to avoid worsening levels of debt.

France, seen as one of the economically healthier nations, is now feeling focused pressure especially as a result of the current trouble. French banks are known to be the biggest holders of Greek debt and as such in line to take the biggest losses on any “haircut” in the levels of repayment from Greece. Lenders to Greece had already agreed a 21% loss on Greek bonds in July’s €109 billion Greek rescue. However due to worsening conditions in Greece a loss on Greek bonds of up to 50% is being discussed. France are believed to be against taking this level of hit due to their large investment in those bonds.

France’s position appears to be growing more unstable with emergence of the news that French banks are growing increasingly in need of recapitalisation. One bank caught up in this quagmire is Dexia, which came close to collapse recently and is now due to be broken up. France is at loggerheads with Belgium over whose taxpayers should pay to salvage the cross-border municipal lender.

However the most worrying relationship development of late is between France and Germany, two countries that are essentially the de-facto Eurozoneleaders.

Germany want to increase the hit taken by those who lent to Greece in order to attempt to prevent a Greek default, as explained earlier France do not want this. Furthermore, as mentioned above, France are looking for extra funds in order to recapitalise their banks and are looking to the European Financial Stability Facility (EFSF) for assistance. However the use of EFSF funds in this manner is in contrast to the traditional stance of Germany and chancellor Merkel.

In summary, not only are financial markets, the U.S. and World leaders worried about the financial and economic condition and failure of EU countries, specifically those in the Eurozone, they are worried about the knock-on effect of these countries defaulting, also divisions between its two leading countries in France and Germany and perhaps the collapse of the Euro.

The latter event seems far too unlikely and it must be safe to assume that whatever decisions that need to be taken to prevent this, no matter how un-palatable, will be taken.

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