Red nose day for Europe as Boris Johnson enters Downing St

Business week: also in the news was banker pay; AIB; Irish Glass Bottle site, and Nama

British prime minister Boris Johnson waves as he enters 10 Downing Street following his appointment by  Queen Elizabeth

British prime minister Boris Johnson waves as he enters 10 Downing Street following his appointment by Queen Elizabeth

 

A quick scan of the newspapers across Europe this week and you might be forgiven for thinking Ronald McDonald had taken up residence at 10 Downing Street.

“The clown who wanted to be king”, was the headline in Germany’s Allgemeine Zeitung, while France’s Libération described the UK’s new prime minister as the “Queen’s jester”.

“That a clown like Boris Johnson is set to become prime minister in the UK shows just how low the country has fallen since the Brexit referendum”, lamented Danish title Politiken, while the Daily Mirror declared: “Send in the Tory clown.”

You couldn’t move for clowns, but – clown or no clown – Boris Johnson this week completed his rise through the ranks of British politics and ascended to its highest office.

It’s fair to say the reaction from Merrion Street was – for obvious reasons – more diplomatic, but even the Government seemed to be struggling at times to maintain the veneer of any expectation of normal bilateral relations with our closest neighbour.

Asked if he could trust Johnson, Taoiseach Leo Varadkar said he had only had one brief meeting with him. “It would be totally wrong of me to try to pass judgment on somebody who I haven’t really met yet,” he said.

In any case, Johnson began his premiership with the most sweeping cabinet purge in recent British political history, appointing hardline Brexiteers to most of the top positions in government.

He then wasted no time in taking aim squarely at Ireland and the backstop, demanding its removal and insisting he would lead the UK out of the EU with or without a deal come what may on October 31st.

“No country that values its independence and indeed its self-respect could agree to a treaty which signed away our economic independence and self-government as this backstop does,” he told the Commons in his maiden speech.

Varadkar, too, was direct. Pointing out that the European Council does not meet again until mid-October, he said the negotiation of a new deal was “not going to happen” and “not in the real world”.

He described a no-deal Brexit as “a British threat” and said that without the backstop there would be no free trade deal between the EU and the UK. Asked if Johnson was bluffing, the Taoiseach replied: “I don’t know.”

Sooner or later, he’s going to find out.

Old foes meet again

Sinn Féin finance spokesman Pearse Doherty and Brian Hayes – the former Fine Gael junior minister in the Department of Finance – are no strangers to each other following years of jousting across the Dáil chamber.

The pair were reunited this week, albeit it under different circumstances. Hayes, now the spokesman for the banking industry, faced off with Doherty on this week’s Inside Business podcast from The Irish Times.

Hayes, once a vociferous critic of the banks and banking culture, argued that three tests should be met before the Government lifts the pay restrictions that apply to AIB, Bank of Ireland and Permanent TSB.

“The first test would clearly be that we’ve gotten beyond the tracker examination and all of the penalties and fines on the banks have been resolved.

“Secondly, where we’ve clearly made progress in terms of the culture and code of conduct agenda. Thirdly, that we’ve made progress, or at least are on the road to making progress, on a personal accountability regime. Those . . . are important tests.”

But Doherty was having none of it. “He’s created three conditions which are already happening,” he argued. “And he’s set them up on behalf of the industry to say that when these three things happen, everything is going to be okay.” Rumbled.

In any event, Minister of State in the Department of Finance Michael D’Arcy insisted this week that pay caps should remain in force in spite of mounting pressure from lenders who want the policy scrapped after blaming it for the loss of top staff.

The banks’ cause isn’t helped by the fact that they still haven’t got their act together, illustrated only too well this week by AIB’s disclosure that it is to refund €61 million to customers after discovering problems with loan documents going back a decade.

Then there’s former Anglo Irish Bank executive David Drumm who – despite being in prison for fraud – was back in the headlines after he was expelled from Chartered Accountants Ireland and fined €15,000 for bringing “discredit” on the profession.

Permanent TSB chief executive Jeremy Masding appealed for time to give his best shot at increasing the earnings and value of the bailed-out bank, before facing possible talks with his board and the Government on a merger.

Suitors sought for Irish Glass Bottle site

It has remained a relic of the Celtic Tiger era for the 17 years since manufacturing was halted there, but moves are finally afoot to develop the site of the old Irish Glass Bottle factory in Ringsend.

The National Asset Management Agency has begun the search for property developers with which to partner in the development of the site which has the potential to deliver 3,500 homes.

It was an eventful week for Nama, as Minister for Finance Paschal Donohoe said he would extend the lifetime of the State agency out to 2025. It expects to return a €4 billion surplus to the Government once its work is completed.

The agency has already repaid the €30.2 billion it borrowed to buy the banks’ debts after it began work in 2009, and has provided 2,475 social homes to councils and approved housing bodies.

Finally, a fund managed by investor Tristan Capital Partners has acquired two ready-to-go development sites in Dublin for €54.5 million, which it will develop alongside local development partners to deliver 663 new homes to the rental market.

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