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Tuesday, August 28, 2007

Irish Property Obsession, British Landlordism and Myths


An image from a contemporary publication of the lynching and burning of a black man by an Irish mob in New York City in July 1863, during the Civil War Draft Riots. © Collection of the New-York Historical Society

Every country has its myths, which may partly reflect reality but more often than not are used to avoid what Al Gore might call an "inconvenient truth."

For example, the Irish obsession with property is often attributed to our historical experience of British landlordism.

The experience of many people with the grubby rental market with its leases of a maximum of a year, has more likely much more to do with it. Besides, we Irish have no aversion to being landlords.

When Irish farmers who get up to 80% of their income from public funds, make multi-million euro killings from the corrupt land rezoning system, which creates an artificial scarcity of land for development, they're very happy to become landlords of residential and commercial property. The latter is particularly popular as business tenants across the globe are less hassle prone than Joe Soaps.

Landlordism was part of a pernicious economic system as was slavery.

Landlordism has been an important part of our narrative of victimhood and we like other peoples have the same proclivity to airbrush out inconvenient truths.

When the Civil War broke out in the US, the Irish landlord system was still reeling from the impact of the Potato Famine of the 1840's. In New York, the Irish had become a force in the pro-slavery Democratic Party and strongly opposed the end of slavery because of the perceived economic threat from an influx of freed slaves.

In January 1863, the Emancipation Proclamation became law.

In his 1991 book, In the Shadow of Slavery: African Americans in New York City, 1626-1863, Leslie M. Harris wrote that: In March 1863, fuel was added to the fire in the form of a stricter federal draft law. All male citizens between twenty and thirty-five and all unmarried men between thirty-five and forty-five years of age were subject to military duty. The federal government entered all eligible men into a lottery. Those who could afford to hire a substitute or pay the government three hundred dollars might avoid enlistment. Blacks, who were not considered citizens, were exempt from the draft.

In the month preceding the July 1863 lottery, in a pattern similar to the 1834 anti-abolition riots, antiwar newspaper editors published inflammatory attacks on the draft law aimed at inciting the white working class. They criticized the federal government's intrusion into local affairs on behalf of the "nigger war." Democratic Party leaders raised the specter of a New York deluged with southern blacks in the aftermath of the Emancipation Proclamation. White workers compared their value unfavorably to that of southern slaves, stating that "[we] are sold for $300 [the price of exemption from war service] whilst they pay $1000 for negroes." In the midst of war-time economic distress, they believed that their political leverage and economic status was rapidly declining as blacks appeared to be gaining power. On Saturday, July 11, 1863, the first lottery of the conscription law was held. For twenty-four hours the city remained quiet.

On Monday, July 13, 1863, between 6 and 7 A.M., the five days of mayhem and bloodshed that would be known as the Civil War Draft Riots began.

The rioters' targets initially included only military and governmental buildings, symbols of the unfairness of the draft. Mobs attacked only those individuals who interfered with their actions. But by afternoon of the first day, some of the rioters had turned to attacks on black people, and on things symbolic of black political, economic, and social power. Rioters attacked a black fruit vendor and a nine-year-old boy at the corner of Broadway and Chambers Street before moving to the Colored Orphan Asylum on Fifth Avenue between Forty-Third and Forty-Fourth Streets. By the spring of 1863, the managers had built a home large enough to house over two hundred children. Financially stable and well-stocked with food, clothing, and other provisions, the four-story orphanage at its location on Fifth Avenue and Forty-Second Street was an imposing symbol of white charity toward blacks and black upward mobility.

At 4 P.M. on July 13, "the children numbering 233, were quietly seated in their school rooms, playing in the nursery, or reclining on a sick bed in the Hospital when an infuriated mob, consisting of several thousand men, women and children, armed with clubs, brick bats etc. advanced upon the Institution." The crowd took as much of the bedding, clothing, food, and other transportable articles as they could and set fire to the building. John Decker, chief engineer of the fire department, was on hand, but firefighters were unable to save the building. The destruction took twenty minutes.

Throughout the week of riots, mobs harassed and sometimes killed blacks and their supporters and destroyed their property. Rioters burned the home of Abby Hopper Gibbons, prison reformer and daughter of abolitionist Isaac Hopper. They also attacked white "amalgamationists," such as Ann Derrickson and Ann Martin, two women who were married to black men; and Mary Burke, a white prostitute who catered to black men. Near the docks, tensions that had been brewing since the mid-1850s between white longshoremen and black workers boiled over. As recently as March of 1863, white employers had hired blacks as longshoremen, with whom Irish men refused to work.

An Irish mob then attacked two hundred blacks who were working on the docks, while other rioters went into the streets in search of "all the negro porters, cartmen and laborers . . . they could find." They were routed by the police. But in July 1863, white longshoremen took advantage of the chaos of the Draft Riots to attempt to remove all evidence of a black and interracial social life from area near the docks. White dockworkers attacked and destroyed brothels, dance halls, boarding houses, and tenements that catered to blacks; mobs stripped the clothing off the white owners of these businesses.

Landlordism is not an explanation for our obsession with property today. Selective history and victimhood only perpetuates delusion.

We should be mature enough to accept both the positive and negative.

In the US almost a century after the rioting of 1963, an Irish-American dominated American politics like no other had done before him.

His name was Joseph Raymond McCarthy and he has also been airbrushed from our Pantheon of Heroes.

Sunday, August 26, 2007

Gormley Opposes Incinerators in Ireland but Supports Export of Irish Hazardous Waste for Incineration

IRISH HAZARDOUS WASTE EXPORT DESTINATIONS 2004 - - John Gormley, TD, Green Party leader and Minister for the Environment, Heritage and Local Government opposes waste incineration in Ireland, which may be politically popular but he has provided no clarity on how we can credibly reduce our dependence on landfill.

It is also rank hypocrisy to oppose incineration while 70% of Irish hazardous waste is exported for incineration!


The politics of opportunism generally pays more dividends than the politics of principle and Pat Rabbitte who resigned as leader of the Irish Labour Party last Thursday, is testimony to that.

In an editorial on Friday, The Irish Times said: Mr Rabbitte stood out as one of a rare breed today: he was a principled politician. Right or wrong, he lived a political life of conviction. He firmly believed that a real alternative to a Fianna Fáil-led coalition should be offered to the voters in the 2007 General Election, stood by his principles when he could have done a volte face and, in the end, accepted the decision of the people with his resignation yesterday.

John Gormley, TD, Green Party leader and Minister for the Environment, Heritage and Local Government, who couldn't countenance another five years in Opposition, is more at home with the politics of opportunism and the Irish system of mouthing principle on issues while being happy to have solutions provided overseas, thereby avoiding difficult choices, is nothing new.

Gormley, in an address to the CoolEarth Fair at the Festival of World Cultures in Dún Laoghaire today, will speak on the themes of "Climate Change, Energy, and Nature", and address the issue of the Government's waste policy and incineration, as well as climate change.

In highlighting Government policy on waste management a press release says that the Minister will say "that incineration is no longer the cornerstone of our waste management policy. This Government has a different approach to waste management. We believe the waste hierarchy is paramount. Real emphasis has to be placed on reduction, reuse, and recycling first. Let us be clear: we do not see incineration or thermal treatment as a form of recovery, it is a form of disposal."

"This government has also set out clearly in its programme a more sustainable approach to the financing of waste projects. So-called "put or pay" clauses, which guarantee a waste stream to incinerator firms are now out of the equation, as are waste permits (waster permits can be used to direct waste to certain types of facilities) which perform a similar unsustainable function," Gormley planned to say.

"This new approach will undoubtedly have an impact on planning. In the past we have seen An Bord Pleanála overruling the recommendations of its own inspectors on the basis that incineration was government policy. This is no longer the case. Good planning and the waste hierarchy must take precedence."

The "waste hierarchy is paramount," because Gormley wants to kill off the plan to build an incinerator in his Dublin South-East constituency. His approach is to ensure that no incineration project would be viable at planning stage by preventing councils from committing to supplying a given amount of waste. Gormley's predecessor in office Dick Roche TD, supported the use of incineration but said that he would not have agreed to locating a plant in his own constituency.

Repak in a report on waste in Ireland in 2004, said that the total projected quantity of hazardous waste was 723,921 tonnes. This compares to a projected estimate of 533,592 tonnes in 2001 and represents an increase of 36%. The increase is dominated by the reported generation of contaminated soil.

Hazardous waste includes solvents, lead-acid batteries, asbestos waste and other categories and in 2004, Ireland exported 70% of its hazardous waste. Some 30% of our municipal waste is exported.

Ireland is largely reliant on landfill, which is viewed by the European Commission as a serious threat to water supply as well as in relation to the production of methane.

The European Commission decided last March to start legal action against 14 Member States for inadequately transposing the EU's legislation on the landfilling of waste into their national law. It sent first warning letters to seven Member States last December, and is now doing the same for Cyprus, Czech Republic, Denmark, Estonia, Finland, Ireland, Lithuania, Malta, Poland, Slovakia, Slovenia, Spain, Sweden and the UK.

The Commission's action follows a comprehensive evaluation of the degree of compliance with the landfill directive by all the pre-Jan 1, 2007 EU-25 Member States. The directive governs operation of landfill sites and is a key measure to protect human health and the environment against potential hazards from waste.

Stavros Dimas, European Commissioner for Environment, said: "The Commission's checks have revealed many shortcomings in compliance with the rules on waste landfills in virtually every Member State. The result is that human health and the environment are not being protected as well as they need to be against dangers from the dumping of waste. Eight years after the landfill directive was adopted it is high time for all Member States to rectify this situation without further delay."

The EU Landfill Directive requires reductions in the amount of biodegradable municipal waste being land-filled. This effectively requires the replacement of landfill capacity with infrastructure of a different kind. Many of Ireland’s competitors have already put in place such infrastructure and will have a competitive edge in this regard until such time as the waste treatment capacity required in Ireland is delivered.

A report published in June 2006 by Forfás, the Irish Government's policy advisory agency, says that Ireland has made significant progress in the area of municipal waste management in recent years, with the share being recycled increasing from 13 percent in 2001 to 33 percent in 2004. However, Ireland performs relatively poorly with a recovery rate of 35 percent for industrial waste, highlighting Ireland’s dependence on landfill as a waste management solution. A significant amount of industrial waste is now land-filled on-site by the bigger companies rather than being land-filled in municipal landfills.

-Waste Costs: Of the countries benchmarked, Ireland has the highest waste management costs for non-hazardous landfill and biological waste treatment. Recycling costs and hazardous waste treatment costs are also higher than most competitor countries because of Ireland’s reliance on export markets for the treatment of recyclable materials. The vast majority of Ireland’s recyclable materials are exported for further treatment. Additional transport costs are directly impacting on the waste costs for the enterprise sector.

Infrastructure Deficits

Ireland’s dependence on landfill remains high relative to other countries. This is mainly due to the limited progress that has been made in delivering waste infrastructure in preferred waste treatment options such as thermal treatment and biological treatment. Ireland’s comparatively poor performance on key indicators such as costs and capacity can be traced back to the failure to deliver key waste management infrastructure in recent years. Ireland’s infrastructure deficits are also likely to affect Ireland’s ability to meet the targets set down in the EU Landfill Directive. Ireland will be restricted to landfilling 75 percent of the municipal biodegradable waste produced (by weight) in 1995 by 2010. This means Ireland must reduce its 2004 biodegradable waste levels by almost 340,000 tonnes.

It's easy for Gormley to peddle in the politics of opportunism on an August Sunday with his fatuously termed waste hierarchy.

Have the cojones to oppose incineration directly and then address the landfill and recycling issue.

In Opposition, it's cost free to promote contradictory policies. Oppose nuclear power while not opposing buying power from the UK or being against incineration while exporting most of our hazardous waste for incineration overseas.

What is being offered to the attendees at the CoolEarth Fair and the Nimbies in Dublin South-East is the standard cute hoorism of Irish politics and it doesn't even come in new packaging.

Plus ça change, plus c’est la même chose!

Thursday, August 23, 2007

Three Top Irish Tech Firms Report Losses but which Firms Export More than €12 billion each year?

The Provost of Trinity College Dublin, Dr John Hegarty (left) presents Chris Horn of IONA Technologies with the TCD Innovation Award in September 2006. IONA Technologies was founded in the IDA-backed TCD Innovation Centre, by three former TCD lecturers from the Department of Computer Science.


Three publicly traded Irish tech companies have recently reported losses at a time of strong global economic growth.

The official target to achieve the status of a world-class knowledge economy is 2013.

Last month, IONA reported a net loss of $1.2 million in its second quarter; Trintech reported on Wednesday, Aug 22, a net loss for the second quarter of $1.0 million and today, Datalex reported a net loss of $0.9 million in H1 2007 compared with a profit of $1.6m in 2006.

Also today, under a headline: Irish tech firms take on Asia-Pacific - the Irish Examiner reports that Irish IT firms (not clear what proportion relates to Irish-owned firms as distinct from units of multinational firms, based in Ireland. Enterprise Ireland does not have a breakdown of exorts to Asia-Pacific by type of firm) already do business worth €185 million with Australia’s software industry. Australia has a highly- developed financial services sector and Enterprise Ireland is targeting it as a key gateway to the Asian-Pacific markets.

Several Irish firms are taking part in a series of networking events in Australia, beginning with a showcase seminar in Sydney today.

The Examiner says: Ireland is now in the world’s top three producers and exporters of software and 800 firms generate more than €12 billion in export revenue for the economy.

Impressive stuff to many readers I would suspect but it is more than misleading as 90- 95% of the quoted figure relates to exports made by foreign-owned firms based in Ireland.

I ask again, how can Irish-owned firms be helped by claiming the likes of Microsoft as an Irish tech firm?

RELATED

Irish Trade Statistics: Policymakers opt for Spin and Delusion rather than confront challenging facts

Tuesday, August 21, 2007

Irish Whiskey - A Lost Opportunity to Create Global Brands of Economic Significance for Ireland

John Jameson Distillery was founded by Scotsman John Jameson who had married into the Haig family, distillers of Scotch whisky. His son married into the Stein family, one of the biggest whisky distillers in Scotland and owners of the distillery at Bow Street, Dublin. John Jameson acquired the Bow Street distillery in the year 1780.

In years past, Irish businessman Tony O'Reilly often spoke of the value of establishing global brands and like the late Victor Kiam with his razor, O'Reilly first bought into one of his examples, Waterford Crystal, which by 1990 had linked up with English tableware brand Wedgwood, to form Waterford Wedgwood plc.

Irish whiskey like Waterford Crystal, were strong brands in the 19th century. By the time of Prohibition in the US, Irish and Scotch distillers shared the foreign whiskey market.

Many Irish distillers went out of business and in my home town of Bandon, the Allman distillery that had opened in 1825 and at times employed about 400 people, closed soon after the ending of Prohibition in 1933.

Irish Governments ignored the potential of creating significant markets overseas and no serious effort was made to rationalise the industry.

Scotch distillers responded swiftly to the re-opening of the American market, partly with the assistance of the development of continuous distillation in Scotland, as their new blended whisky could easily meet the increased demand and the Scottish whisky industry boomed.

I have argued recently that the Irish economy is more dependent today on foreign-owned firms than it was at the begining of the Celtic Tiger period and as international commercial property is the investment of choice for Irish with money, there is little hope that a significant Irish-owned sector can establish itself in international markets.

There is also evidence of what can happen when an immature business is acquired by an overseas concern.

Given that 40,000 jobs are maintained in Scotland by their whisky industry compared with about 1,000 in Ireland by the whiskey* sector, including Bailey's Irish Cream, it seems to me that we lost the opportunity a few decades ago to create a global brand of economic significance.

Irish Distillers, a unit of French company Pernod Ricard, says that Jameson, the world’s leading Irish whiskey brand has now reached sales of two million cases for the first time. (2006) Over the last decade, sales of Jameson have doubled. In the past year alone, figures in the United States, Jameson’s largest market, show an increase in excess of 20% with other countries such as South Africa, Russia and Brazil achieving exceptional growth rates.

Another mark of its international success is that for the first time, Jameson has made it into the top fifty selling spirit brands worldwide and is now ranked with the international elite. Jameson is the fastest growing international whiskey brand in the world and one of the fastest growing spirits brands.

However, Irish whiskey is not a big business.

Irish Distillers currently employs about 530 employees across 4 locations on the island of Ireland.

On the island, the Old Bushmills Distillery in County Antrim, which is owned by Guinness owner Diageo and has a payroll of about 125, is the other main distillery.

Last week, independent distillery Cooley Distillery, which is chaired by former UCD academic Dr. John Teeling, said the rise in pre-tax profits, from €1.3 million to €1.67m, reflects growing demand by younger drinkers for Irish whiskey worldwide. Turnover was ahead by 27% to €11.7m.

The company said it needed improved distribution that is dominated by a small number of big companies.

Ireland produces about five million cases of whiskey a year and six million cases of Baileys Cream Liqueur at the Diageo-owned Gilbeys.

1 billion bottles of Scotch were exported in 2006 according to the Scottish Whisky Association

Rampant Scotch

The renaissance of the Scotch whisky industry was confirmed last month when Bacardi, the Bermuda-based distiller, announced plans to invest more than £120m in Scotland to expand production of its Dewar’s brand.

The Financial Times reported that the industry has gone from strength to strength over the past year as international distillers seek to capitalise on rising demand from emerging markets in Asia and Latin America.

Last year was a record year for Scotch whisky exports, with sales revenues rising 4 per cent to almost £2.5bn. There was strong growth in premium bottled malt whisky exports, which increased by 7 per cent to £408m. The Scotch Whisky Association said: "You haven't seen this sort of investment for 30 years."

With sales to markets including Singapore, China and Venezuela growing fast, distillers are pouring money into whisky operations.

Bacardi will spend some $250m (£123m) over the next decade to expand its warehousing, blending, packaging and bottling operations. This includes building 18 warehouses and buying 100 acres of land in central Scotland.

Joaquin Bacardi, Bacardi senior global brand director, said it was responding to demand from emerging markets where economic growth was “generating a strong middle-class consumer with disposable income”.

Diageo, owner of the Johnnie Walker whisky brand, said in February it would invest £100m to build a new malt distillery in Scotland.

In July, Paul Walsh, chief executive, said Diageo planned to expand further into premium brands such as the Blue Label King George V edition of its Johnnie Walker whisky, which sells for $500. "You have polarisation of incomes . . . those who have good incomes want the best."

Chivas Brothers, the whisky and gin business owned by Irish Distillers owner, Pernod Ricard, and which includes the Glenlivet and Ballantine’s brands, has invested millions of pounds in Scotland this year to expand bottling operations.

The FT said that whisky accounts for 13 per cent of Scottish exports, excluding oil and gas, and services 200 export markets. It makes up about a quarter of the UK’s annual food and drink exports.

More than 40,000 Scottish jobs depend on whisky production, including cereal suppliers, bottling, labelling and packaging companies and transport suppliers.

Although the bulk of jobs are at large plants in central Scotland, the industry also provides steady – if low-paid – jobs in the Highlands and Islands, where employment opportunities are limited. Distilleries account for 25 per cent of Scotland’s five-starred tourist attractions, attracting 1m visitors a year

Bacardi, which has five distilleries in Scotland and employs 300 people, expects to add about 100 new jobs as it expands production.

Irishman Richard Burrows, chairman of the Scotch Whisky Association, said the industry’s prospects were brighter than they had been for many years. “I’m greatly encouraged that distillers, large and small, are investing in facilities in Scotland and taking advantage of opportunities worldwide, with markets in Asia, North and South America offering strong potential for growth.”

Richard Burrows who is also the Governor of the Bank of Ireland represents Pernod Ricard on the Scotch Whisky Association.

Irish Whiskey since the 1960's

In the early 1960s the export of Irish whiskey was insignificant and in 1966 three of the remaining distilleries merged in a new company called the United Distillers of Ireland (UDI). The name was subsequently changed to Irish Distillers (IDL). The three distilleries were John Powers & Sons, John Jameson & Sons and Cork Distilleries (Jameson - founded in Dublin in 1780; Powers - established in Dublin in 1791; and Cork Distilleries which dates from 1825). In 1972, the Old Bushmills Distillery, Co. Antrim becomes part of Irish Distillers.

In 1975, IDL centralized all its production at a new £9 million distillery, Midleton, in East Cork. The new Midleton distillery was built behind the old Midleton Distillery.Within a few years, Canadian company Seagram’s bought both IDL and Irish whisky industry now held only one percent of the global whisky market.In 1988, French company Pernod Richard bought IDL from Seagram’s.

Given the challenge that we have in developing scalable high-tech companies of world class, the near death of the Irish whiskey industry until the 1960's and then as appendages to Canadian and French companies, appears to have been a huge opportunity foregone.

Today, it's effectively too late to pull the fat from the fire.

We've had some success in tapping into the US market but with Scotch making big advances in emerging markets in Asia, the battle has already been lost

The $970 billion global market for alcoholic beverages is experiencing a period of unprecedented change. While about 60 percent of the market is still in the hands of small, local enterprises, truly global players are steadily emerging according to an Accenture report.

*The word for the Irish product has an 'e' - whiskey.

Wednesday, August 15, 2007

Aer Lingus' Dermot Mannion should tell the likes of Willie O'Dea where to get off

Aer Lingus Chief Executive Dermot Mannion

These are testing times for Aer Lingus Chief Executive Dermot Mannion and in the interest of the airline, he should hold the line against bishops, opportunistic local politicians in the Mid-West Region, the demands of business folk who take tough decisions like him every day, Ryanair's chance to make some hay from the Shannon debacle and the top earner pilots/shareholders who dislike the model that has turned Ireland from an economic backwater into an advanced economy.

We have an advanced economy but our governance system has a 1920's vintage where there is little accountability and passing the buck is the rule rather than the exception.

Limerick politician Willie O'Dea has a non-job in the Cabinet as Minister for Defence but nevertheless, he supported the privatisation of Aer Lingus in 2006. Like most Irish politicians, he is par excellance, the local messenger boy/fixer who in the Irish system, do the work that a citizens' bureau system handles elsewhere.

Long-term policy issues are generally of secondary importance to most Irish politicians.

Junior minister in adjacent constituency of Clare, Tony Killeen, is another local messenger boy who earlier this year disclosed that his constituency office mails more than 14,000 letters annually. Killeen was interviewed on RTE Radio 1's Morning Ireland programme today and he said that he did not understand the implications of the request of Ryanair, a 25.1% shareholder in Aer Lingus, for an Extraordinary General Meeting (EGM) to be held on the planned cancellation of the Shannon-London Heathrow route.

There are seldom cost-free choices despite the wishes of politicians.

Peace in Ireland after an age of strife is quite marvel to behold.

The Irish Government has given support to the Northern Ireland Executive in its campaign to get the British government to lower the UK corporation tax for NI to the Republic's level of 12.5%. If there was an all-Ireland tax of 12.5%, isn't it conceivable that we would have aggro about projects lost to Northern Ireland?

The decision of Aer Lingus to open a base in Belfast would have been inconceivable a few years ago.

It is also a decision that is part of a peace dividend for the whole island but the likes of Willie O'Dea wish to have their cake and eat it.

O'Dea has compared Mannion to seventeenth century English leader Oliver Cromwell, the most hated Englishman in the history of Ireland. Abuse is easier than explaining where are the existing plans for an airport that is already depending on the temporary business from the transit of US troops for the Iraq War and is subject to loss of business from the EU/US Open Skies agreement?

As for the implications of his vote on privatisation, O'Dea does not have to explain anything.

The Cabinet members are on holidays this month of August but with the Houses of the Oireacthas only in session for about 90 days each year, the trick is to just ignore the media.

Irish politicians simply are seldom subjected to detailed questioning unless its via a public tribunal.

So with the spineless local politicians jumping on the Shannon bandwagon and the trade unions energised by the calamity howling from the West, what credible future can Aer Lingus have unless it stands firm?

The job description of the Irish TD in the Twenty-first Century

A Banjaxed System of Public Governance where the Buck Stops Nowhere

Reform Irish Style: Take action only in Response to a CRISIS...sorry...a DIRE CRISIS

IBEC calls planned strike by Aer Lingus pilots/shareholders cynical attempt by change-resistant union representing the most highly paid group in the airline

Ryanair announces additional routes from Shannon to London region if Aer Lingus does not back down on Heathrow; Requests Aer Lingus to call EGM

Aer Lingus pilots/shareholders want Republic of Ireland pay and conditions to apply at international bases

Monday, August 13, 2007

What do citizens want from the European Union?

The 50th anniversary logo of the signing of the Treaty of Rome in 1957, in the Irish language.
Many citizens are confused and bewildered by the complex organisational structure and numerous competencies of the European Union. Conversely, it is not easy for decision-makers in the EU to know what its citizens expect of them. The rejection of the European Constitution by voters in France and the Netherlands clearly shows that many citizens have trouble identifying with the European Union.

But what do its citizens expect of the European Union?

Floriana Cerniglia and Laura Pagani, University of Milan Bicocca, in their recent CESifo Working Paper, examine Eurobarometer survey results to ascertain how citizens envision the division of responsibilities within the EU and between the member states in the EU-15. They show that there are policy areas that citizens agree to be important throughout the EU. For the majority of surveyed citizens internal security, justice, education, culture, the health system and other areas of the welfare state should be assigned to the national level.

At the European level belong decisions relating to currency issues, foreign policy, development assistance and dealing with the threat of terrorism. In other areas the opinions of Europeans diverge as to where competence lies. These include agriculture, immigration and defence policies.

Some countries have a stronger pro-European stance and others are more euro-sceptical regardless of the policy area. The strongest proponents of the European Union are in southern Europe, especially in Italy, and the northern countries are the least enthusiastic. The Anglo-Saxon countries, Germany and France occupy the middle territory.

The study also determined that citizens that think well of their countries' institutions are opposed to a strong shift of responsibilities to the European level; the opposite is the case in countries whose citizens tend to be discontent with their national governments. The results are also influenced by social criteria: more educated or wealthier citizens have a stronger pro-European attitude.

Also, adherents of leftward-leaning political positions tend to favour a stronger role for the European Union.

The complete CESifo Working Paper No. 2067 The European Union and the Member States: Which level of government should do what? An empirical analysis of Europeans' preferences can be downloaded here.

The CESifo Group, consisting of the Center for Economic Studies (CES), the Ifo Institute for Economic Research and the CESifo GmbH (Munich Society for the Promotion of Economic Research), is based in Munich Germany and is a research group unique in Europe in the area of economic research. It combines the theoretically oriented economic research of the university with the empirical work of a leading Economic research institute and places this combination in an international environment.

Thursday, August 09, 2007

Hell at Heathrow and Panic at Shannon - A Victim in Search of a Regional Policy

There has been much attention in the UK media in recent times about what is termed "Heathrow Hassle," or more conventionally hell.

I hate travelling through Heathrow where I have a connecting flight. Recently, following the cancellation of the Gulf Air Dublin-Bahrain service, I had to travel via London to get a connection to Asia.

While bags can be forwarded, for most bookings, check-in has to be done all over again at Terminal 3 or 4 and whereas in December, it was possible to carry on board a laptop and hand baggage, now only one piece is allowed.

The Daily Telegraph recently quoted vice-chairman of Standard Chartered Capital markets, Sir Thomas Harris, as saying that many executives do whatever they can to avoid using Heathrow.

At the end of July, The Financial Times commented in an editorial:

There is now an easy answer for international travellers deciding whether to join the undignified race to immigration at London’s Heathrow airport. There is no point. The queue for passport checks might be shorter, but any time you make up will probably be lost again, waiting for your luggage in a tatty, crowded, rundown baggage hall.

Kitty Ussher, a new minister at Britain’s Treasury, is right to worry that the dire state of London’s main airport may put business travellers off coming to London. Some of the problems at Heathrow are the fault of BAA, the airport’s owner; some are because the number of passengers using Heathrow far exceeds the airport’s design capacity. But there are also problems that only Ms Ussher’s government can resolve.

BAA, which owns London’s Gatwick and Stansted in addition to Heathrow, is currently under investigation by Britain’s competition authorities. The result ought to be a break-up of BAA’s London airports. Because of capacity constraints, a break-up might not create much competition immediately, but in the long run it should mean at least some extra pressure on each airport to attract airlines and passengers.

In the aftermath of the decision of Aer Lingus to axe the Shannon-Heathrow service later this year, the Irish Independent reports that thousands thousands of jobs are at risk in the west it was claimed.

Some of the region's top executives said the decision sounded the economic 'death knell' for area.

The Independent says that many businesses set up in the region because the Heathrow route gave them access to European markets. Of the 350,000 passengers who use the route each year, an estimated one quarter are estimated to be business customers.

Ryanair's Michael O'Leary criticises political meddling in Italian aviation but calls on Taoiseach Bertie Ahern to support reversal of the Aer Lingus decision.

Aer Lingus was privatised last September and Ryanair built a stake of 25% in the airline. Michael O'Leary is proposing that the Irish Government should join with Ryanair to get Aer Lingus to reverse gears.

Few would have any doubts that Michael O'Leary would give Bertie Ahern a robust PFO if the latter tried to intervene in route decisions.

In a letter in the Irish Times today, Prof Anthony McElligott of the University of Limerick writes that the news that Aer Lingus is dropping its Shannon-Heathrow route should not come as any surprise. Over the past three years its services to and from Shannon have been cut back progressively, as any regular user will have noted.

The proposed relocation to Belfast International Airport obviously makes sense from the company's point of view and follows the decision to expand services out of Cork and Dublin. Even the most casual observer should have been able to read the writing on the wall. Understandably, staff at Shannon are aggrieved by this, and customers too should be unhappy.

However, the anger should not all be directed at Aer Lingus chief executive Dermot Mannion: he is, after all, an accountant, and it would be too much to expect him to consider the human cost and inconvenience. The present crisis at Shannon stems from the failure of the airport's management to ensure that there is healthy competition between carriers. at Shannon. Until recently, easyJet had tried to establish a regular service to London Gatwick, but gave up.

With the withdrawal of Aer Lingus, the way is open for Ryanair to establish a monopoly over the UK route from Shannon. This is very bad news and one can expect a radical change in its pricing policy.

As one of many regular business users who need either to land at Heathrow or transfer onwards to Europe, I want to know why Shannon Airport Authority did not anticipate the current situation, and why it has done nothing to attract other carriers to Shannon (such as the excellent BMI, which also flies into Heathrow). Luckily for me, Cork is only marginally further away than Shannon and that will now become my local airport.

Transport Minister Noel Dempsey has so far resisted pressure to intervene.

Ryanair makes decisions based on its commercial interests. Should Aer Lingus revert to its pre-privatisation status with politicians and trade unions having undue influence on day-to-day operations?

When we have a back-of-an envelope decentralisation policy (remember that?) and our system of cronyism overriding the development of a coherent regional policy, it is not surprising that we end up with a panic about Shannon Airport.

As Prof McElligott suggested, it's easy to dump on Aer Lingus rather than focus on other crucial issues.

Issues such as the "Shannon stop-over," may have been on the agenda for decades but like so much else, the Irish response is: take action, only when there is a crisis....a dire crisis!

Sunday, August 05, 2007

Principles and Irish Politics: Eoghan Harris and John Gormley

The appointment of former Marxist Eoghan Harris by Taoiseach (Prime Minister) Bertie Ahern to Seanad Éireann, the Upper House of the Irish Parliament, brings to mind a quip from a Marxist of greater consistency- American comedian Groucho Marx (1890-1977) who joked : Those are my principles, and if you don't like them... well, I have others.

Senan Molony wrote in the Irish Independent last Saturday that Harris is a political chameleon who has changed his colours frequently while nailing each new set of them firmly to the mast.

Fiercely passionate, Harris stands as the perfect columnist contrarian. A catalyst for controversy, he sparked much of it when he infamously described President McAleese as a "tribal time bomb" on her election.

A former leading light of the Marxist Workers Party, Harris has been credited with helping to turn around the May general election for Fianna Fail with an impassioned RTE television 'Late Late Show' appearance on the Friday before polling day.

What ties Harris to Gormley who is now Minister for the Environment, is that both can be very passionate on values but then jettison them when the occasion suits.

Politics is said too be the art of the possible and compromise on policy is often necessary for achieving advances in a democracy.

A clip from the 1933 Marx Brothers movie Duck Soup where Groucho enters politics and becomes President of Freedonia


It has for example taken almost a century for the vision that Irish revolutionary leader Michael Collins had in 1921 in agreeing a compromise with Britain, to be ultimately vindicated in the settlement this year in Northern Ireland.

However, a distinction should be clearly made between compromises on policy and expedient switches on values or previously strongly professed convictions.

In a period of deep cynicism about politcs, what hope is there when John Gormley rejects with passion the values of Bertie Ahern and Fianna Fail, only to find it expedient within months to regard his previously held positions as irrelevant?

Gormley himself is hardly delusional enough to believe that Ireland is going to march ahead of the EU in saving the planet from climate change! In the meantime, true to Irish ministerial tradition, in his first major move in office, he has instructed his Department to seek tenders for a planned publicity campaign on the issue.

Gormley, the Greens and Harris have drank the soup and the already tarnished reputation of Irish politics, has been sullied further.