Tuesday, January 20, 2009
Where now for Ireland?
I told myself that today, with Barrack Obama becoming President that things can only get better, but perhaps I was wrong. With AIB and Bank of Ireland shares losing almost 60% yesterday and AIB losing a further 25% today, one has to ask what future have the two main banks. If their future is precarious, then all our futures are precarious. Recent talk of the IMF becoming involved in the running of our country may not be as far-fetched as some think!
The nationalisation of Anglo Irish is being voted on as I type. Richard Bruton of Fine Gael thinks that it should be let die. My view is that at least if we own it, we can manage the debt that it holds and minimise the eventual cost to the state. However, the prospect of the current Government and their cronies running the bank does not fill me with confidence. I do not think that we have the expertise in the Civil Service to do the job. The Central bank and Financial Regulator have let the situation deteriorate catastrophically by turning a blind eye to the terrible behaviour at our banks, and they are meant to be the experts!
On a local level, the bank managers tell me that they have “loads of money to give to suitably-qualified people” and I do believe them. We are still selling houses, mainly to first-time buyers, who are seeing reductions in price from the figures of two years ago and much lower interest rates. But for trade to continue, we all need there to be a confidence in the market. The Government has not inspired any confidence to date, changing track many times already. While I know that these are unprecedented times, it is vital the decisions made now are acted on. The initial promise to “cut Public Service pay”, later scaled back to “talk to the Social Partners”, then further scaled back to “maybe meet the Social Partners in February” is indicative of the lack of leadership and direction of this Government. This does not make for a confident population and is even more damning from the point of view of international investors. The Anglo fiasco is a further nail in the coffin. Why invest in Ireland Inc if it is, as Bob Geldof once claimed, a banana republic?
Anyway, I hope that the new US President will bring hope to the world and start a turn-around of the economy. This will eventually filter through to us all. I wish him well in his endeavours.