As provided for in legislation, the terms of office of the first appointees will vary in length in order to ensure that future vacancies on the Commission will be staggered. The appointees and their terms of office are as follows:
Professor John Fitzgerald (5 years)
Mr. Max Watson (5 years)
Mr. Michael Soden (4 years)
Mr. Des Geraghty (4 years)
Professor Blanaid Clarke (3 years)
They will join the ex-officio members: Professor Patrick Honohan (Governor), Mr. Matthew Elderfield (Head of Financial Regulation), Mr. Tony Grimes (Head of Central Banking) and Mr. Kevin Cardiff (Secretary General of the Department of Finance) on the Central Bank Commission.
The Minister said:
“These appointments to the Central Bank Commission will bring a wealth and diversity of talent and experience to the Commission and represents a very significant step in the reform process.”
So while I’m watching our opposition politicans debate the extension of the guarantee, news breaks on the Financial Times about information they were looking for earlier today. Deficit to reach 30%. Is that a record?
Dublin will on Thursday unveil a fresh recapitalisation of Anglo Irish and seek to draw a line under its banking crisis. But doing so will raise the cost of its taxpayer-funded bail-out of the banks to up to €35bn ($48bn) and lift the country’s fiscal deficit to a record expected to be as much as 30 per cent of gross domestic product
In an interview with the Financial Times, Brian Lenihan, finance minister, said Ireland had no choice but to act.
“Any Anglo failure would bring down the sovereign. It is systemically important not because of any intrinsic merit in the bank. But because of its size relative to the national balance sheet. No country could contemplate the failure of such an institution,” he said. As part of the new bail-out the finance minister will authorise the immediate transfer of Anglo Irish’s remaining €25.9bn in non-performing property loans to the National Asset Management Agency, the government body set up to house troubled assets from the banking crisis. At one swipe, the move will halve Anglo Irish’s size.
On Wednesday Standard & Poor’s, the credit rating agency, downgraded Anglo Irish’s subordinated debt by three notches to triple C and warned there was a “clear and present risk” of a restructuring of the bonds. Earlier this week, Moody’s Investors Service similarly downgraded the bank’s sub bonds, but also downgraded Anglo Irish’s senior bonds by three notches because of the “greater marginal risk” that the government would not support those creditors.
In anticipation that Allied Irish Banks may now be targeted by the markets, Mr Lenihan is separately expected to announce a further taxpayer injection of about €2-3bn to help the bank meet the regulator’s year-end deadline to raise €7.4bn. Announcements by Mr Lenihan and the financial regulator will seek to restore calm to the debt markets where Ireland’s cost of borrowing was again at near record levels on Wednesday.
So that means effective nationalisation for AIB. €5bn more for Anglo too. “The cost of its taxpayer-funded bail-out of the banks to up to €35bn”.
The disconnect between the media and the markets in the last week or so has perturbed me. The coverage in the days following the bond auction last Tuesday gave the impression that all was well after investors ‘queued up’ to buy our bonds, as if such an event could only be positive. Some Sunday commentators did call BS on it but the conventional wisdom doesn’t appear to have changed. Similar reporting has continued over the last week.
The following is an attempt put a pin on where exactly it is ‘we are’ when Brian Cowen says “we are where we are”; an attempt to explain what happened in the days prior to the auction, it’s impact, and the current decisions facing the government.
It’s written in as plain language as I could muster. Wonks, I apologise in advance.
On Prime Time last Tuesday night Fianna Fáil TD Thomas Byrne ran the prescribed government line on the bond auction. He gave the impression that the bond holders queuing up to buy our bonds was proof-positive of the viability of the State. “If they didn’t think our economy was manageable they wouldn’t be investing in our bonds”, he said, “they wouldn’t be five times oversubscribed on one of the bonds and the three times oversubscribed on the other. They are willing to put their cash into this country because they believe we can pay it back.” Continue reading “'Where we are'”
Long time readers will recall that this blog has been having something of a legal disagreement with both the National Asset Management Agency (NAMA), and more recently our own Office of the Commissioner for Environmental Information (OCEI). The saga has now been running for eight months, and looks set to continue for some time yet.
For new readers (and we see from our subscriber figures that there are many new readers) we should perhaps recall how this legal battle commenced. Back in February, realising that NAMA does not come under Freedom of Information (FOI) legislation – because our Minister for Finance decided not to prescribe it – we instead turned to that other arm of right to information legislation: the Environmental Information Regulations, or EIR for short.
We sent a request for information to NAMA, which was promptly refused on the basis that NAMA did not consider itself to be a public authority for the purposes of those regulations (SI 133/2007). We disagreed, citing that the Regulations stated that a body “established by or under statute” (and also that the board was appointed by the Minister) was a public authority, and therefore NAMA was a public authority. In disagreeing, we sought an internal review from NAMA. NAMA complied, and their internal review agreed with their original decision, that NAMA was not a public authority. We then appealed the matter to the OCEI, a sort of sister office to the Information Commissioner, and also headed by Emily O’Reilly. We also added a further submission to that appeal. Months passed, after which we received a letter from the OCEI – a preliminary decision which agreed with NAMA that it was not a public authority, and seeking our response. We then replied to that preliminary decision, as we were asked by the OCEI to do.
Last week we received a copy of NAMA’s reply to our response, and have been invited to make a further submission, in advance of a binding decision by the OCEI. This has actually become reasonably technical on a legal level – but we believe it is all really rather simple. The core argument (among two other significant arguments) is actually based on how one reads the legislation.
The legislation states:
“public authority” means, subject to sub-article (2)—
(a) government or other public administration, including public advisory
bodies, at national, regional or local level,
(b) any natural or legal person performing public administrative functions
under national law, including specific duties, activities or services in
relation to the environment, and
(c) any natural or legal person having public responsibilities or functions,
or providing public services, relating to the environment under the
control of a body or person falling within paragraph (a) or (b),
(i) a Minister of the Government,
(ii) the Commissioners of Public Works in Ireland,
(iii) a local authority for the purposes of the Local Government Act 2001
(No. 37 of 2001),
(iv) a harbour authority within the meaning of the Harbours Act 1946
(No. 9 of 1946),
(v) the Health Service Executive established under the Health Act 2004
(No. 42 of 2004),
(vi) a board or other body (but not including a company under the Com-
panies Acts) established by or under statute,
(vii) a company under the Companies Acts, in which all the shares are
(I) by or on behalf of a Minister of the Government,
(II) by directors appointed by a Minister of the Government,
(III) by a board or other body within the meaning of paragraph (vi), or
(IV) by a company to which subparagraph (I) or (II) applies, having
public administrative functions and responsibilities, and pos-
sessing environmental information;
Simple, right? One would think so, but NAMA doesn’t see it that way.
As far as NAMA is concerned, and indeed the preliminary view of the OCEI, it hinges mainly on what the words “and includes” mean. For us the legislation says:
a “public authority” means X and includes Y
where X represents the three types of public authority 3(1)(a)-(c) and Y is a list of bodies and categories of bodies i.e. 3(1)(i)-(vii). We believe NAMA clearly falls within the definition of 3(1)(vi). But NAMA reads parts (i) – (vii) as a subset of (a-c).
You could say we are at loggerheads on this one. And this actually goes beyond whether NAMA is or is not a public authority under this legislation. The disagreement here is so fundamental that it affects all other types of bodies that may or may not be public authorities under the same legislation. It is of fundamental importance to how this legislation is applied in the future, and could decide on how limited, or unlimited, the definition of public authorities becomes. Dozens of bodies could be included or excluded on the basis of how this legislation is interpreted.
Here is the letter from NAMA on this case:
A reply to this letter has already been drafted (with huge, indeed massive help from a reader of the blog), and we will publish it here once submitted. Should the OCEI find against us, and find that NAMA is not a public authority, our only recourse would then be to the High Court on a point of law.
The support of our readers, particularly those legal pros among you, is of course always appreciated.
EDIT: [As pointed out by Dave Molloyin comments. “Sorry, but, ‘payments made last year’ and “earlier this year said he would forgo his pension” (from then on, presumably) seem compatible, no?”]. I got the relevant years mixed. Post left as was to show the world my foolishness and remind me not to post in such haste again. – Mark
Both myself and Gav are hectic with the day jobs (shocker, jobs!) and haven’t had the time to blog anything too significant of late. We’re getting around to it.
In the meantime; isn’t it amazing that a detail like the following doesn’t get more than 30 words, 12 paragraphs down, 17 pages into your newspaper these days.
Accounts published last night by the Department of Finance also showed pension payments made last year to former office holders including: former Taoisigh John Bruton (€100,027); Garret FitzGerald (€103,926); Albert Reynolds (€109,358); and Bertie Ahern (€98,901).
Mr Ahern, a sitting TD, earlier this year said he would forgo his pension while he was still serving in the Dail.
As part of an ongoing process, the appointments diary of then Taoiseach Bertie Ahern for 2004. Redactions marked ‘A’ are so because the department believes them to be “personal information” as defined in Section 28 of the FOI act. Entries marked ‘B’ relate to the Taoiseach’s private papers as a member of the Oireachtas. Regards ‘B’ redactions – the cover letter from the FOI officer states “Section 46 of the Act states, inter alia, that the Act does not apply to records relating to any of the private papers of a member of the Oireachtas and as such I consider that the Act does not apply to these entries.”
Ireland’s deepening troubles raise doubts about the wisdom of the stringent fiscal austerity measures that the former Celtic Tiger and other European countries have put in place, which effectively hamper consumers and take cash out of the economy.
At the same time, Ireland’s gloomy prospects mean the government may have to make even deeper cuts this winter to reduce its budget deficit, which is expected to surpass 25% of GDP this year, the biggest in the 16-nation euro area by that measure. The possible doubling in the deficit—now about 12% of GDP—is due largely to the cost of bailing out troubled banks.