Belfast Telegraph

Politicians must hit banks or risk wrath of voters

Anger at the bankers could see the Taoiseach getting a bloody nose in next month's referendum. But is the Executive any better at bringing them to account, asks Henry McDonald

Bertie Ahern is more like Leeds United than Manchester United these days. Although the now-disgraced Taoiseach is a lifelong fan of the Reds, his own one-time followers treat him the same way as ex-Leeds supporters of a certain vintage, who have conveniently left Elland Road behind.

If you listen to the chit-chat in pubs and cafes around Dublin Central at present, you will find it unthinkable that Ahern once consistently topped the poll in this constituency while easily bringing in a second running-mate on the Fianna Fail ticket.

But, in a strange way, one institution even more despised now than Ahern and Fianna Fail, has suffered the same fate.

During the boom years of the Celtic Tiger, with their arrogance and profligacy, Irish bankers were fast becoming the masters of the financial universe.

They launched daring raids into enemy territory, loaning billions to their builder/speculator chums to buy up landmark properties in London, airports in the English northwest, shopping centres in eastern England, before spreading their tentacles out into the new investment frontiers of the Ukraine, Russia and the Middle East.

On the home front, they offered 100% mortgages to first-time buyers and loans for second homes, both in Ireland and abroad.

From the vantage-point of a four-year, seemingly never-ending recession, with a near-bankrupt Republic, blighted by legions of empty ghost estates, no one, it seems, ever voted for Bertie, or took leave of their senses by joining the banking bacchanalia.

Indeed, Northern Ireland also caught this contagion, with its own property-fuelled mini-boom - powered, in part, by the very same banks that loaned, loaned and loaned again to speculators in the south.

And now Northern Ireland is paying the price for that overheating, with Nama - the Irish state's 'bad bank' - left with vast swathes of land and property in the province that their former bankrupt owners can no longer afford.

Yet, in spite of protestations from Ahern's ever-diminishing band of defenders, or the whining bailed-out banks, people have very short memories, casually forgetting they ever marked their No 1 beside Bertie's name on the ballot paper, or signed on the dotted line for another equity-fuelled loan.

At the end of May, southern voters will go to the polls once again to help shape the EU's future. The Fine Gael-Labour coalition faces the unwelcome prospect (due to the de Valera constitution) of ratifying the latest EU reform programme that imposed new, harsh, restrictions on national budgets.

The plebiscite, in turn, gifts the Opposition - especially Sinn Fein - the chance to land a serious blow on the 14-month-old government.

The referendum also provides the Irish public with its first opportunity to punish Enda Kenny's administration, not over any EU-connected issues, but rather a range of other grievances, ranging from the imposition of a €100 (£82) 'household charge' to the ban on turf-cutting in rural communities.

The southern electorate may also choose to use the referendum to register its frustration over the seeming inability of Fine Gael and Labour to put manners on the banks.

There is a widespread perception in the south that, even though the government owns close to 100% of Allied Irish Bank/First Trust, it cannot, for instance, stop it awarding bondholders around €1.5bn (£1.2bn) in paybacks.

That happened last week and caused outrage throughout the country. The nationalised bank used taxpayers' money to ensure that its bondholders/investors got a full 100 cents for each euro of their investment.

Independent TD Stephen Donnelly caught the mood of the country when he described the deal as nothing short of criminal.

In contrast to Donnelly, the Dublin government appeared to have meekly rolled over in the face of the AIB/First Trust's determination to pay investors for bonds originally taken out in 2007.

That supine reaction is matched by the diffidence, or indifference, afflicting Northern Ireland politicians in their inability to deal with these same banks.

When is the last time they were hauled up in front of a Stormont committee to answer questions on how they treat both business customers and households? What are Finance Minister Sammy Wilson and his Assembly colleagues afraid of?

A canny strategist in Sinn Fein or the United Left Alliance - the two main forces calling for a No vote on May 31 - would be wise to focus on the bank guarantees and the apparent inability of the Irish cabinet to metaphorically and very publicly flail those in charge of the taxpayer-rescued banks.

Although the avaricious actions of the banks have been an incendiary issue for voters, the Dublin government seems unable to put these institutions in their place.

Enda Kenny's administration, that swept to power so decisively in 2011, could be in danger of suffering its first major humiliation.

Defeat for Kenny would also prompt a fresh crisis of confidence in the eurozone and, in turn, highlight once again how the two economies on the island are actually diverging, rather than merging.


From Belfast Telegraph