Saturday, March 22, 2008

John Gormley - the Irish Minister for Climate Change has nothing of substance to say on the issue


Irish Environment Minister John Gormley meets the Irish NGOs (representatives of Non-Governmental Organisations) at the UN Climate Change Conference in Bali, Indonesia, in December 2007. Pictured, from left to right: Declan Murphy (Ecology Foundation), Mark Ruttledge (Feasta), Niamh Garvey (Trocaire), Minister John Gormley, Pat Finnegan (Grian), Fr Sean McDonagh (Columban Missionaries).

In another decade, most of Ireland's current Cabinet will be like old nags, grazing on fertile pasture - a pension system linked in perpetuity to current payment levels of politicians. Individually, they will be remembered for nothing while collectively, they will be reviled for abject lack of vision and political courage to bring about enduring change during a period of unprecedented prosperity, known as the Celtic Tiger period. Taoiseach Bertie Ahern will be forever linked with the corrupt era of Irish politics and his supporting role in the Northern Ireland peace process - - credit where it's due but without the unprecedented commitment of a British Prime Minister, Tony Blair, to the Irish issue, it could have taken years post Ian Paisley, to reach a political settlement.

Some readers may think it unfair to lump John Gormley, Minister for the Environment and Green Party leader, with other mediocrities in the Cabinet but the public raison d'être for serving under a man - Bertie Ahern and his Party - whom Gormley and his colleagues had repeatedly criticised as corrupt, up until May 24th 2007, the date of the last General Election, was that the urgency of the melting polar ice caps, eclipsed all else.

Anyone who believes that Gormley's own personal ambition and the other Green Party negotiator Dan Boyle's dependence on Bertie Ahern's patronage of appointment to the Senate, had nothing to do with the decision to enter government, is a fool.

Gormley's Faustian bargain came at a heavy price. Beyond climate change, the Green Party got a ragbag of promises from Fianna Fáil. There would be no fundamental change in the Irish system of governance. The London model of an elected mayor was agreed for Dublin but beyond, this essentially cosmetic plan, it would be business as usual.

On the issue of climate change, it is striking how little of substance John Gormley, the Minister for Climate Change, has to say on the issue.

Gormley said in February 2008 at an European Commission seminar : Climate change is the biggest challenge facing humanity. It is the challenge that will define this generation, and most likely the generation after this. And we will be remembered and judged on how we respond to this challenge.

Last December, he presented a much spinned "Carbon Budget," which was devoid of any references to costs and also in December, Economist and Social Research Institute economist Richard Tol said in a paper that the Irish government plans to reduce greenhouse gas emissions by 3% per year, which can only be achieved by drastic measures on the demand side, such as a rapid reduction in the number of cattle or people. The Irish government also plans to introduce a carbon tax. A tax that applies to emissions that are not covered by the EU emissions trading system, and that roughly equals the expected permit price, would achieve emission reduction at almost the lowest possible cost. Tol said that a carbon tax that is levied on emissions covered by the EU ETS, would not reduce emissions, but would cost Ireland and the rest of the EU money.

Gormley said nothing in response.

Biofuels have been shown to be a fool's panacea but again, Gormley has nothing to say.

As regards a carbon tax, again Gormley has nothing to say.

Last month, the Tánaiste and Minister for Finance, Brian Cowen, announced the establishment of a Commission on Taxation, which is to look at how a "carbon levy" could be introduced.

Gormley said at the European Commission seminar: For too long I believe Ireland has been content to play a back seat role on the environmental agenda at European level. We have been too slow in the past to implement environmental directives that Ireland itself negotiated and agreed on. As a small island with a clean, green image, I believe there is a much greater and meaningful role for us to play in environmental and climate change policy at EU level.

We need to define what that role is, but I believe that already we are beginning to show leadership on aspects of the climate change agenda. We now have a very ambitious target to reduce Ireland’s emissions by 3% on average over the lifetime of the Government. The 3% target is ambitious because it needs to be – it is very much in line with the scale of reductions recommended by the Intergovernmental Panel on Climate Change. The Government is also committed to putting in place a long-term target for Ireland, but we do need to achieve a broad consensus on the scale of effort that is required; this is why the Government has proposed to work towards an all-Party Oireachtas agreement on the necessary long-term targets.

There's the cat out of the bag!

Gormley and his ministerial colleagues haven't the cojones to take tough decisions. It wants all political parties to agree and provide the Government political cover. Fat chance as in the Irish system, the politicians in power take ALL the credit for good news and no responsibility for anything else.

Gormey's Green Party ministerial colleague Eamon Ryan has called for "a national debate" on nuclear power. How should such a national blatherfest be conducted?

Again, like his leader, Ryan wants to pass the buck.

As for blather, Gormley's comment on having a "much greater and meaningful role for us to play in environmental and climate change policy at EU level," while failing to articulate a credible position on climate change, nine months after taking up office, shows that like his ministerial colleagues, he lacks both vision and leadership.

The notion of taking a leading role in Europe on climate change while acting as political jellyfish at home, is simply a joke.

Finfacts Climate Change Reports

Saturday, March 15, 2008

Irish Economy: Economist Austin Hughes aching for Eurozone Recession; Clueless Politicians on Auto-Pilot

Brian Fallon, Director, of property website Daft.ie with Austin Hughes, Chief Economist, IIB Bank


"Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something," so said Taoiseach (Prime Minister) Bertie Ahern, to an Irish trade union conference in July 2007.

If you and your group of 34 other second-rate ministers believed that you invented the Celtic Tiger and had found the philosopher's stone to transmute your creation into a permanent prosperity, then it's easy to understand why you look with disdain on critics, who charge that a US dominated economy, powered domestically by a construction boom, is built on a foundation of quicksand.

Ahern is a pastmaster at speaking through both sides of his mouth and at a press conference in Brussels, on Friday, March 14, 2008, he said:

"Economic forecasting, as we all know, is an uncertain exercise and, for a small, globally-integrated economy such as us, the uncertainties that are out there at the moment are magnified. There's no doubt about that and this is apparent from a whole range of forecasts currently available.

"But they are all very different. I'm not getting into the business of which one is right. NCB (stockbrokers) this week published a forecast of 3.5 per cent of GDP growth for the year so here you see, in the one week, [ forecasts] that are going from 1.8% to 3.5%."

But for the NCB Stockbrokers chop imprinted on the first report, it would be dismissed as a joke.

The second report is from the Economic and Social Research Institute (ESRI), an organisation that almost fifty years ago, was the inspiration of TK Whitaker, eminent civil servant and artchitect of the modern Irish economy. It is independent and publicly funded.


The purpose of the ESRI was to have credible analysis done outside the Department of Finance - to be free of political and commercial influence.

Irish Economy: Housing market not the engine of growth; Exports contribute minimal impact to growth because of high import level - Demographics are the key

Irish Economy: ESRI forecasts growth to plunge to 1.6% in 2008 - lowest in 20 years; Moderate recovery in 2009 but Exchequer deficit will rise to €7.5 billion

Last year, besides Bertie Ahern, there were several others including IIB Bank economist Austin Hughes who excorciated "negative commentators" who were "talking down the economy."

Now that reality has struck home, the tune has changed to a welcome for the arrival of a "sustainable" housing market.

A year ago Dublin property agent Ken MacDonald wrote: Why do we allow scaremongers and doomsayers with unfounded pessimism and unbridled negativity dictate our thinking and blunt consumer confidence? The Irish economy is the envy of the world. Job creation is phenomenal with more than 7,000 new jobs being created each month - despite the gloomy attention given to periodic job losses in some sectors.Unemployment stands at 4.1%, the lowest in Europe; there are 750,000 more people in the workplace than a decade ago. We have revitalised cities and towns, a conveyor belt of entrepreneurial business people operating successfully on a world stage, a rich cultural and artistic heritage, a vibrant talented young population, rising by almost 100,000 per year, confident in their own and their country's destiny. We should be celebrating our success on a daily basis. In any event, the Irish love affair with property will continue undaunted despite the knockers.

A conveyor belt of entrepreneurial business people operating successfully on a world stage? - Buying overseas commercial property maybe but in other sectors, not much to brag about.

Irish investors were the second biggest net investors in commercial property across Europe in 2007

Last month, the Sunday Independent wrote: Ireland's fear that it's headed for an economic downturn could be the decisive factor in making it happen, according to a leading economist.

Austin Hughes, chief economist at IIB Bank, has warned that a self-fulfilling "wall of gloom" is contributing to the recent rise in unemployment.

The economic expert was speaking following the release of latest live register figures, which revealed a 7,800 increase in the jobless total in the past month.

"There is more or less a wall of gloom for the outlook of the economy at the moment and, in those circumstances, the likelihood is that firms in the broader economy where conditions are still okay . . . are probably being more cautious about their hiring plans and particularly in terms of casual and short term labour, they're probably easing back," explained Mr Hughes.

"Firms are being more cautious, consumers are gloomy. "Most media commentary is fairly downbeat so it is understandable if everyone is erring on the side of not hiring and not spending," he added.

It's interesting that the super-optimist on the Irish economy appears to be aching for a Eurozone recession, so that European Central Bank interest rate cuts would jump-start the Irish housing market. Damn the consequences for those who would lose their jobs across Europe.

In February, Hughes speculated that a dramatic deterioration in the Eurozone economy could trigger ECB rate cuts by April if not earlier. Everything appears to be seen through the prism of the Irish mortgage market. The business of his bank is overwhelmingly mortgage lending.

Not all financial service economists are like artists who paint what their patrons like but in recent times, Hughes is acting more as a mortgage marketing man than economist. It hardly matters as he will be sure to get continuing free media exposure from busy journalists in need of a quote from a "leading" or "top" economist.

As for the broadcast media, usually the interviewer has little if any grasp of economics and beyond waffle about the short-term i.e the coming few months, there is seldom a challenging question to deal with. The chief requirement of a good forecaster is a brass neck. Who cares what your past batting average may be or that you cannot offer independent/uncompromised analysis?

Jill Kerby wrote in the Sunday Times on Feb 3rd:

What is it they say about economists? That they make weather forecasters look good?

The mortgage banks just cannot resist sending out their economists at every opportunity , and ideally when a microphone or television camera is in the vicinity, to "reassure" the public that all will be well in the housing market.

Last week it was IIB Bank's turn to tell the nation that once average house price fall another 5%, to make a grand total of 16% since the start of last year, the bottom will have been reached, the "soft landing" achieved.

Would anyone listen let alone believe such a prediction if it was delivered by the bank's mortgage boss or the PR guy? Of course not.

They'd dismiss it as marketing propaganda to drive a few more first time buyers into the jaws of the mortgage monster out there with a sign around its neck that reads "negative equity" if they also happen to be seeking a 100% no-money-down, interest only loan.

Three Irish bank economists on ECB rate outlook: From 3 cuts beginning in June to unchanged benchmark of 4% in December 2008

Comment: Irish Government declares free lunch has not been invented but freeloading continues for ministers

Tuesday, March 04, 2008

Irish Farmers and Pharmacists Addicted to Public Welfare

Beneficiaries of public handouts over a long period do not give up their privileges when new circumstances warrant it. They become addicted to them and Irish farmers and pharmacists are fighting for a retention of public welfare.

Irish farmers have been the biggest per capita beneficiaries of the European Union's Common Agricultural Policy (CAP) for decades. It's a public welfare system and there is no maximum limit on the direct payment system that is payable for even watching the grass grow.

Multimillionaire beef processor Larry Goodman gets more than €500,000 annually in payments to support his 1,600 estate. Besides the CAP, some farmers who have been fortunate in having land acquired for road building or with potential for development, have also been huge beneficiaries of the system that makes land scare in a country that is 4% urbanised.

Meanwhile, most pharmacists also have been enjoying a public bonanza and those who have cashed in recent years have hit the jackpot. Public payments have risen from €332 million in 1997 to €1.5 billion in 2006. Published Health Service Executive (HSE) figures show that 26 pharmacies received payments of over €1m in 2006. The biggest recipient, Abbey Healthcare in Blackrock, Co Dublin, received over €4m, which was almost twice as much as the next biggest.

-Ireland's 40-year bonanza of foreign aid from the European Union will amount to €41 billion by the time we become a net contributor in 2013

As for farmers, 12 Asian emerging economies accounting for half the world's population, provide a huge potential for food producers and both Australia and New Zealand are gearing up to meet the huge demand for meat, grain and dairy products.

It's news to the Irish Farmers' Association who are stuck in the past trying to keep Brazilian beef out of the EU market and also maintain their existing protections against non-EU producers.

Speaking at an IFA protest outside the EU Commission offices in Dublin last week, IFA President Padraig Walshe said the hit on Ireland from any World Trade Organization (WTO) deal negotiated by EU Trade Commissioner Peter Mandelson would be at least €2billion, with the loss of our suckler cow herd and third country prices and living standards for the few who might survive.

Walshe said farmers had gathered to keep up the pressure against Mandelson and remind him that his concessions to the Brazilians and other South Americans on beef would wipe out the suckler cow herd across Europe and in Ireland.

“The Irish beef and livestock sector has faced many challenges over the years, but it was never in such a dangerous situation as it is facing over the next 3 months. The WTO negotiations are in a perilous phase and if Mandelson is not stopped in his tracks, all the indications are that he will concede even more to try and pull together a deal,” he said.

Padraig Walshe said “Mandelson is working behind closed doors in Geneva in a reckless destruction of the CAP. He is prepared to sell out the beef industry in Ireland, to get a deal at any cost. He is engaged in a race to the bottom, to the lowest standards of food safety, animal welfare and the environment. The only winners in Mandelson’s agenda are the multinationals, commodity traders and corporate ranchers.”

IFA’s assessment is that the situation is now so critical that Ireland must declare a vital national interest to stop the Mandelson sellout. The only option open to the Government is to use the Veto. Walshe said “the bottom line is that Irish farmers could be facing a halving of cattle prices to €1.60/kg (that is below 60 pence/lb.) in the next few years if Mandelson is not stopped.”

In a country that depends on exports more than any other with foreign-owned companies being responsible for 90% of exports, the Minister for Agriculture has called for a complete ban on Brazilian imports into the EU.

-Foreign-owned firms were responsible for 90.2% of Irish exports in 2006 - including both merchandise goods and internationally traded services

Pandering to the farm lobby, Irish Minister of State for Trade and Commerce, John McGuinness TD recently met with the EU Trade Commissioner Peter Mandelson in Brussels, to discuss recent developments in the current round of WTO (World Trade Organization) talks on the Doha agenda. The Minister said that he "outlined clearly Irish concerns on the direction the talks are taking that affect Irish Business and Agriculture."

The Minister "emphasised to Commissioner Mandelson the necessity that negotiations deliver real and clearly positive outcomes for Ireland."

- UN's World Food Programme considers rationing food aid: Irish Minister "robustly" defends agriculture protections apparently oblivious to the rapid changes in world markets

Pharmacists and Taxpayer funded Drugs

The Irish Independent reports that the cost of drugs to the health service reached almost €1.75bn last year, of which a quarter -- €370m -- went to the country's pharmacists, preliminary, unpublished figures show.

The battle between the Health Service Executive and the pharmacists over plans to reduce this bill reach a decisive stage this week, with an emergency meeting of the Irish Pharmacy Union on Wednesday to discuss the latest moves.

IPU president Michael Guckian says there is no prospect of finding an agreed solution to the dispute on the HSE's plan to cut margins on the cost of drugs by more than half, from almost 18pc to 8pc.

He has called on chemists not to carry out a threat to refuse prescription drugs to medical card patients while the IPU considers its next moves. Minister for Health Mary Harney is has assured such patients they will still get their prescription medicines if their pharmacist withdraws from the medical card scheme.

Brendan Keenan writes that the figures for last year show that drugs cost 45% more by the time they reached the patient than when they left the drug companies' factories. The latest row began after the HSE got agreement from the manufacturers to cut the cost of medicines by €260m over the next four years, and moved to get €100m in savings from wholesalers and pharmacists.

The figures show that wholesalers last year continued the practice of transferring half of their 17.7% mark-up to the pharmacists in the form of €100m in discounts.

Of the big wholesalers, Uniphar is owned by 400 pharmacists, Cahill May Roberts owns 72 retail chemists and United Drug has invested €300m in community pharmacies. UK chain Boot's has a target of 100 stores in Ireland.

Brendan Keenan says that as well as the €100m discount, chemists received €238m in fees and charged a €131m markup of their own last year. Published HSE figures show that 26 pharmacies received payments of over €1m in 2006. The biggest recipient, Abbey Healthcare in Blackrock, Co Dublin, received over €4m, which was almost twice as much as the next biggest.

It is estimated that the average pharmacy has a total turnover of €1.5m. The IPU argues that such averages hide the plight of the smaller pharmacies, especially those in rural areas, which will be hit disproportionately hard by the planned savings and some may go out of business.

-Pharmacy survey suggests over 300 Irish pharmacies "could" close as a result of threatened HSE cuts in payment; State payments have jumped from €332 million in 1997 to €1.5 billion in 2006

The IFA never complains about the land rezoning bonanza and the pharmacists pleading the Béal Bocht (poor mouth) belies the reality of the good times that both they and the farmers have enjoyed on public welfare.

There is a common mentaility in Ireland that public funds are for milking and there's no shortage of vested interests looking for part of the action.

Taoiseach Bertie Ahern isn't the only socialist left in Ireland!