Alan Kennedy's sententia

No cuts to EU Budget - A letter from cloud cuckoo land.

Curtailing budget would condemn the EU to depression

Published: November 19 2010 00:20 | Last updated: November 19 2010 06:50

From Mr Jacques Delors and others.

Sir, As member states prepare to renegotiate the full range of resources allocated to community policies in the coming lengthy seven-year period, the vast majority appear to believe that since all national budgets are being cut, the budget of the European Union should be similarly curtailed. This approach is misguided. It is based on faulty assumptions and runs counter to European interests.

The assumptions are wrong because national budgets are different from the European budget, and to compare the two is an exercise in demagogy. It must be remembered that the EU budget accounts for only about 1 per cent of gross domestic product compared with 25 per cent in the US.

Curtailing the EU budget would run counter to the interests of Europe because it would condemn the EU to economic depression or at best stagnation. At a time when national governments are forced to adopt austerity measures, the European budget can and must be used as an instrument to boost the economy. The Union is granted new competencies by the Lisbon treaty and has set very high goals for 2020 to promote intelligent, sustainable and inclusive growth. With its current resources it will be unable to achieve these goals. The EU’s momentum and democratic underpinnings would again be shaken by a complete mismatch between the objectives it proclaims and the resources made available to achieve them.

EU spending is not simply added to national spending. In a number of areas (such as solidarity, defence, research and innovation and European energy and transport infrastructure), the Union can streamline total spending through economies of scale and take more effective action with fewer resources. Can the EU’s current resources be used to increase the community budget? Certainly not. The bulk of the EU budget is financed through national contributions provided by member states at a time of national belt-tightening.

The EU needs a new own resource, with receipts going directly to the EU budget rather than being channelled through member states. In fact, it is this type of resource that was foreseen by the founding treaties for the financing of EU actions. Governments would be wrong to see this as the spectre of a European tax and use it to alarm to public opinion. A new own resource could increase the EU budget and decrease member state contributions. It would enable the EU to make progress in combating climate change, through a carbon tax, or excessive financial risk-taking, through a tax on financial transactions.

European citizens would fail to understand if the post-crisis world were to be a carbon copy of the pre-crisis world with a bit less growth and more unemployment. A European economic recovery budget based on a new own resource, to be used to achieve ambitious goals, is an economic and social necessity and a matter of political urgency.

Enrique Barón-Crespo,

Former President, European Parliament; former President of the Parliamentary group of European Socialists

Joachim Bitterlich,

Executive Vice-President International, Veolia Environnement Paris; Vice-President, Notre Europe

Pervenche Berès,

European Deputy

Josep Borrel Fontelles,

President, European University Institute of Florence; former President, European Parliament

Jean-Louis Bourlanges,

Former European deputy

Laurent Cohen-Tanugi,

Lawyer

Etienne Davignon,

Belgian State Minister; former Vice-President, European Commission

Jean Baptiste de Foucauld,

Inspector of finance

Jacques Delors,

Founding President, Notre Europe; former President, European Commission

Ana de Palacio,

Former Minister of Foreign Affairs, Spain

Renaud Dehousse,

Director, Center for European Studies, Sciences Po Paris

Philippe de Schoutheete,

Former Permanent Representative of Belgium to the European Union

Isabelle Durant,

Vice President, European Parliament

Piero Fassino,

Secretary General, Democrats of the Left in Italy

Jean François-Poncet,

Former Minister of Foreign Affairs, France

Emilio Gabaglio,

Former Secretary General, European Confederation of Trade Unions

Prof Nicole Gnesotto,

Chair of European Union Studies, Conservatoire National des Arts et Métiers; Vice-President, Notre Europe

Sylvie Goulard,

European deputy

Elisabeth Guigou,

French Deputy and former Minister

Klaus Hänsch,

Former President, European Parliament

Philippe Lagayette,

President, Fondation de France

Eneko Landaburu,

Ambassador, Head of the Delegation of the European Commission in the Kingdom of Morocco

Allan Larsson,

Former Minister of Finance, Sweden

Pierre Lepetit,

Inspector of finance; Vice-President, Notre Europe

Paavo Lipponen,

Former Prime Minister, Finland

Vitor Martins,

Advisor on European Affairs to the President of the Republic of Portugal; former Minister of Foreign Affairs

Mario Monti,

Former European Commissioner; President of Bocconi Unversity, Milan

Tommaso Padoa-Schioppa,

President, Notre Europe; former Minister of Economy and Finance, Italy

Riccardo Perissich,

Former Director General, DG Industry, European Commission

Alojz Peterle,

European deputy; former Prime Minister, Slovenia

Julian Priestley,

Former Secretary General, European Parliament

Antonio Puri Purini,

Advisor to Italian President; former Ambassador of Italy in Germany

Gaëtane Ricard-Nihoul,

Secretary General, Notre Europe

Maria João Rodrigues,

Former Minister of Portugal; Advisor for Economic and Social Policies to the European Commission; Professor, University of Lisbon

Daniela Schwarzer,

Researcher, SWP Berlin

Antoinette Spaak,

Belgian State Minister; former European deputy

Barbara Spinelli,

Journalist

Pedro Solbes,

Former Minister, Spain

Christian Stoffaës,

President of the Board, Centre of Prospective Studies and International Information (CEPII)

Pawel Swieboda,

President, Demos Europa

Christine Verger,

European Parliament Director; former Secretary General, Notre Europe

Guy Verhofstadt,

President, ADLE group in the European Parliament; former Prime Minister of Belgium

Daniel Vernet,

Journalist

Jérôme Vignon,

President, Semaines Sociales de France

I can't even begin to express the anger I'm feeling after reading this letter.

I asked myself what planet Cowen and Lenihan were living on, clearly there are more than two inhabitants.

Good God.

Posted November 22, 2010

Idiots at best

You know, I think bad of saying this, but I hope the current Government rot in hell.

If they've acted in the best interests of the country and taken the action the chose in good faith then they are nothing but a shower if well meaning but incompetent idiots.

If, as I suspect, they have shafted this country, it's population and future generations owing to their lust for power, greed and a sickening and undue deference to the EU then they are traitors.

Posted November 21, 2010

Can we be accurate for a moment?

It's not a bailout. It's not free money. It's akin to building up huge credit card debt and being refused a credit union loan and so resorting to borrowing from a dodgy money lender with punitive and crippling interest rates. We don't need to borrow more money, we need to stop spending what we don't have. Time for the truth.

Posted November 17, 2010

It's very simple...

Owing to stupid and over reaching decisions taken by a scared, frightened, ill-informed and stupid government (yes, the blanket bank guarantee) we are left in a distressing situation. The solution is painful, but failure to act correctly is now and will be more painful. We are, as a nation, now bound at the hip to three... Four... Five? Toxic banks. Their losses are now ours and they losses are plentiful. We know all this already, we know it only too well. Many "radicals" and "extremists" have been touting this solution for some time, but the media/political groupthink in Ireland dictates they be called names rather than listened to, instead those who were stupid enough to have allowed this mess to happen are given the podium of authority.

But the solution, I won't call it an option because it isn't optional... It's necessary... Is that the Bondholders who invested in these bad banks are burned. It's them or us and I think it's time the people of ireland make the choice, the government sure as hell won't. It really I them or us. Why the government put them before you needs serious investigation. Regards,
Alan Kennedy.

Posted November 15, 2010

Just a thought...

We were told that the Lisbon Treaty would make the EU more efficient. Right?

So how come post Lisbon they needed to hire hundreds more Eurocrats, create a plethora of agencies and grab a budget increase of €6 billion?

Posted October 28, 2010

David Drumm - Anglo's unwitting fall guy?

So I was tending to my aquarium this evening and Anglo came to mind (it too is full of filth and I'm having a hard time getting rid of it).

I was observing the behaviour of the fish, I noticed that after a small school of a certain species died out leaving only one behind the other fish were picking on the remaining one.

This got me thinking about Anglo and Drumm: Was he set up to be the Anglo fall guy?

Drumm took over as CEO of Anglo from Seanie in 2005. As we see from the politics.ie thread here the that particular overcharging event stopped or came to light around the time he took over.

It was FitzPatrick and Bradshaw who took out the €87 million in director's loans from Anglo to buy Anglo Shares, and transfered them to another bank to make it seem as though the loans to Directors was smaller (€40m rather than €150m) not Drumm. Drumm did, however, resign after this came to light.

In fact, the majority of the bank's underlying problems were created prior to Drumm taking over as CEO. Also, Anglo was also very much Seanie's baby and the clientelist nature of the bank derived from FitzPatrick's time at the helm... it would have been difficult for Drumm to work against that.

Then, recently, we heard that Drumm offered a settlement to Anglo which was, to say the least, almost as generous as it could be by offering up all his assets (including his €5.4 million pension - which would be worth less than that were it to be cashed in now it has to be said) save his clothes and jewellery. But it turns out this was refused by the Bank.

I found it odd that this was refused. But then on RTE's Six-One they speculated that if it had been accepted that it would be seen as "letting him away" with his actions. That is to say that a political decision was taken, not a commercial one. As a bank Anglo's responsibility amounts rt recovering as much as they can from bad loans, not making political decisions.

It was reported that Drumm was frustrated with this, and I can't blame him for that. He did make a genuine offer to cover as much of his debt as he could and it was refused. One can't help but understand why he would then go and file for bankruptcy in the US where their laws are much less draconian in this regard.

Drumm, unlike Seanie, owes Anglo €8.5 million... that's it. FitzPatrick owes Anglo €155 million, over 18 times as much. Drumm is now living in exile in the US while Seanie is living it up here.

A few weeks ago Cowen said that it would be "helpful" if Drumm came back. To be honest, I think a lot of the Anglo boys are only to happy to see him stay where he is and keep his mouth shut. I would like to see someone the Irish media relinquish it's establishment bias(full page pictures of him smiling, the b@stard!) and give Drumm a fair hearing. It might do us a world of good and save us more than €8.5 million and David Drumm's washer/dryer.

Posted October 15, 2010

Some interesting points about Ireland and irish bank bondholders.

The post below is by a poster "Libero" taken from a discussion on http://www.politics.ie/ if you care to join in.

As the bank losses and their consequences become clearer, Official Ireland is becoming ever more brazen, no matter who else in the world is looking on with disapproval.
Led by Brian Lenihan, Official Ireland continues to insist that senior bank bondholders must be protected no matter what.
After all we've been through, there's still no new bank resolution framework, where bondholders could be forced to bear a loss without being able to petition for the closure of the bank.
The IMF has specifically criticised the Irish government for failing to introduce such a new framework: Ireland—Concluding Statement for the 2010 Article IV Consultation
The IMF is all in favour of bank resolution rules that force losses on bondholders, and has consistently highlighted the shortcomings that arise when banks are in crisis but stakeholders cling to their rights under outdated and unsuitable insolvency law: http://www.imf.org/external/pubs/ft/wp/2009/wp09200.pdf
The BIS is also of the view that bank risk capital should do what it says on the tin and actually bear some risk: Proposal to ensure the loss absorbency of regulatory capital at the point of non-viability - consultative document
And now the EU Commission rows in.
It says a lot about the desparation of Official Ireland to avoid a winding-up of Anglo Irish Bank that bank resolution legislation has been kept off the agenda - in spite of the promptings of the usual sources of external authority like the IMF, BIS and the EU.
Of course, it's more comfortable for the government to protest that winding up Anglo is somehow legally difficult, rather than just an option they've decided against.

http://www.politics.ie/economy/139847-european-commission-tell-denmark-dont-pay-bondholders-so-why-we.html

Posted October 6, 2010

In defense of Brian Cowen.

I like many had high hopes for the "Dream Team" on Cowen and Lenihan. Looking back, not that far back... but it now seems that way, things were not so bad. The Celtic Tiger was over and the soft landing was on the way and the future of the country was in the hands of Cowen, a smart and well respected Finance Minister, and Lenihan, an accomplished and honourable politicial well liked by all.

But things didn't pan out how we expected. Oh Lord how they didn't turn out as we expected. The "soft landing" became an almighty crash, the "International financial crisis" found a home in an office building on St Stephen's Green, and the once second richest country in the world became an economic basket case with almost half a million unemployed, insolvent banks, mass emigration and misery and hardship for all. In a few short years we reverted back to the 80s again.

And it's all this bloke's fault:

Well, actually it's not... at least not entirely.

It's very easy not to like Brian Cowen these days. He's the face of broken Ireland. And it's not a very photogenic, he's not eloquent, he's not charismatic and his list of achievements could be counted on one hand... In fact he's got almost nothing going for him at all. He's now a national focus for all our our fears, frustration and anger.

God knows, as the man behind his poster, I'm not in the running to be his best friend:

But even almost a year on from that last Lisbon battle things have changed so much that in the same circumstances I'm not sure I'd have run the same campaign poster this time out.

Hating Cowen?

Cowen was handed a poisoned chalice, he just didn't know how toxic it was, by one of the worst, most devious, most damaging political figures in the history of the State. Garret FitzGerald once famously remarked that CJ Haughey having a “flawed pedigree”, it was a caustic and cutting remark delivered with precision. Little did he know then that the man who was to follow was truly flawed.

There is barely a single problem we now face as a nation which doesn't have the fetid stench of Bertie Ahern's malignant influence off it. There are countless quotes and remarks I could throw up here to build a case of damning his cancerous reign as Ireland's Prime Minister but they are now projected onto the face of one man who is unjustly carrying the can for the mistakes of another.

Ireland is a broken country and Cowen is a man who broke with it. I have no doubts that he is also a good man who is failing under extraordinary pressure.

This post is not to absolve him on any hand, act or part he played as an insider in Bertie's cabal which cause us to fall so far and so hard, But the mess we are in is not all his fault. He has, it must be said, shown now leadership whatsoever and that is a massive failing on his part which is to the detriment of this poor country of ours.

Stand down

There is a lot of uninformed commentary on this issue, "we want a general election", "fianna fail out", "down with Cowen" and on on. I am often accused of being anti-FG too for pushing for a glimpse at something from them which shows they have the ability and ideas to help the country out of the hole we're in, alas I have yet to see it. If the recent polls have anything to show the rest of the country hasn't seen it either. So what good is served by a General Election right now? What will an vote cast in anger achieve for us?

Brian Cowen is clearly unfit to lead the country. The reasons for this may be more than those of us on the outside may understand, he's clearly fighting those personal demons and I'd much rather he focus on those and save himself than try and juggle the war with the national demons too and risk losing both battles. It's clear than there is dissatisfaction within Fianna Fail, how widespread that is has been dampened down, but reading between the lines it becomes more obvious. Less cryptic is the lack of confidence the country has in Cowen as leader. He has, I believe, to stand down. He must do this soon and it must be done without the unseemly bitchfight we say during the Fine Gael leadership challenge.

Leaders

I will come in for some slack over this addition, but it may stir up some debate so I'm including it.

One of of the advantages Fianna Fail has over Fine Gael, and shares with Labour, is there is no shortage of Leader figures. Brian Lenihan, Micheál Martin or even Mary Hanafin all possess some leadership quality which is certainly absent in Enda Kenny and also from the FG front bench. Richard Bruton was the only person in FG with some credibility on the most important issue, the economy, and he was badly wounded during the leadership challenge.

In light of this, it seems almost madness for Cowen to remain leader of Fianna Fail and Taoiseach.

Posted September 24, 2010

Remember this?

And this:

Well, since then unemployment is almost 14% and the cost of Irish Bonds has risen and is staying above 6%. And these people called me a liar.

Just saying is all.

Posted September 17, 2010

Enda Kenny -Magic beans part 2.

FINE Gael leader Enda Kenny last night dramatically began his general election campaign by claiming he would need 10 years in power to repair the economy -- even before his party has won a single vote.

Despite ongoing questions over his leadership, the Fine Gael leader told the Irish Independent he would go to voters with an economic and public-service reform plan based on being in office for two full terms.

http://www.independent.ie/national-news/kenny-ill-need-10-years-to-fix-economy-2335225.html

Again, lest there be an FG supporters reading, let me explain my focus on Kenny. The man is likely to be our next Taoiseach,our country is in dire straights and we need somebody who knows what they are doing. His plans need to be challenged before they are supported and they need to be known before we can challenge them.

MISTAKE

Fine Gael are not popular. The last RedC poll has them at 33%, they've rarely been above that and until the economy went tits up they were never in front of FG. At a time when almost every economic and societal ill can be firmly blamed on Fianna Fail I don't believe that's something to be happy about. Fine Gael are simply at 33% because they are not Fianna Fail, not though any action of their own. They are not popular and to launch an election campaign or intention of election campaign or whatever this was, with a focus on repairing the economy in 10 years is a huge mistake. To do it with out any specifics at all is even more so. For anybody with reservations about the man without a plan the idea of 10 years of Enda will send them one or two ways, either to vote for somebody else or not vote at all.

Also, what is this exactly? A pre-election election campaign? Now, unless Enda knows something I don't is there likely to be a General Election any time soon? If FG & Co. haven't managed to engineer the fall of the government over the last year of our political lives, the total collapse of the economy, a spike in unemployment to 14%, mass emigration the likes of which we'not seen since the 80s, Anglo, NAMA and whatever else I think it's unlikely that they will manage it now and the current Government will see a full term. If I am right then what is the point in all this election preparation, jumping up and down after the summer holidays (a break which he seems to have taken to his heart because there wasn't a peep out of him at all) to say "I'm still here, I'm still here!"?

NO PLANS

In a previous post I discussed how on morning Ireland during the week he said he wouldn't cut capital spending from it's current level, would not cut spending on education, health or social welfare. Now that makes up about 80% of government expenditure so... I mean really?

David Cameron said time and time again that Labour had left the country in ruin and that he would do what was necessary to get it back on track, in his governments first budget they made tough decisions but he had communicated to the people why these were necessary and had balanced them so that nobody got off the hook. Osbourne said the budget was "tough but fair" and that was the resounding feeling from around the country, people knew times where tough and tough choices had to be made.

Enda has now stated that he's not taking any tough decisions or choices.

Now, however he has made a rather vague and opportunistic power grab statement. Ten years is fine if we knew what you would do in that ten years... but we don't, Enda, and I have a strong belief that you don't either.

It seems more and more evident that Enda's plan to see his party in government is based nothing more on the expectation that people like Fianna Fail less than they like Fine Gael, that the Dail's circadian rhythm is swinging around to his direction and, above all else, it's his turn to be in the big seat...after all he's been waiting long enough now.

Posted September 13, 2010

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