Dáil rolls up for Biffo's triple bill of scalpings, shock and awe
TOXIC TUESDAY – we saw it coming, but that doesn’t make it any easier, writes MIRIAM LORD
Destitution Day – when Biffo’s Government went over the top and landed us in hock for the foreseeable future.
Broke Bank’s Mountain (of debts) – a gritty story of financial cowboys who fall in love with themselves and drag a nation to the brink of ruin.
We had the political equivalent of fright night in the Dáil yesterday. It was the horror triple bill nobody wanted to see, but there was no choice.
Richard Bruton frightened the life out of us with his predictions of the consequences. So did Joan Burton. We’ll be in the workhouse by Christmas.
Then we had to endure The Head with Two Brians – not for the faint hearted. The sight of Cowen and Lenihan reassuring a nervous public that they will lead them on the path to financial salvation is not a good one.
“We need an Irish banking system fit for purpose . . . this is the way forward,” says BrianC.
“We are now in a position to stabilise the deficit and we are on a firm path to economic security,” soothes BrianL.
But they have a dark past – their previous promises haven’t worked out. Why believe them now? That’s what Richard Bruton wanted to know, when he said the latest phase in the Government’s attempt to save the banking system would lead to a doubling of the national debt and the mortgaging of our futures.
An air of the crypt hung over Leinster House. It was cold and quiet. People drifted about, saying little. The flabbergasting figures about Anglo Irish bank and the news about high-flying Quinn Insurance worsened the mood.
The proceedings had been well flagged in advance. Up for dissection: the restructuring of our main banks and building societies.
“I think that today is the day that’s going to be remembered for a very long time in this country,” predicted Labour leader Eamon Gilmore. “This is the day the Irish taxpayer gets the invoice for the bailout of the banks.”
What was to come had been labelled “Super Tuesday.” But there was nothing super about what was to come. We have been banjaxed by the banks, confirmed the two Brians. Minister Lenihan then confirmed that full extent of the nightmare.
Joan Burton didn’t hold back. “The figures are truly awesome,” said Labour’s finance spokeswoman. She hunted around for a suitable catastrophe that might illustrate the gravity of the situation. She plumped for the military doctrine employed by the Americans during the bombing of Baghdad. “These figures are about shock and awe. And I am shocked and I am awed.”
So what are the figures? Far too much for most of us to comprehend. The language of Nama is impenetrable to most of us, which makes what went on in the Dáil all the more frightening.
The Government had predicted the financial institutions would take a “30 per cent haircut” when they were taken over by Nama.
But no. They were scalped.
“The weighted average haircut across these institutions is 47 per cent,” Brian Lenihan told the chamber. Richard Bruton and Joan Burton looked scandalised, and started scribbling notes for their replies.
Some of us just couldn’t get our heads around the whole idea of financial haircuts. However, it seems, if the word of Biffo is to be followed, it is wise to have a good trim in order to make your head fit for purpose.
Or something like that.
“Fit for Purpose” is the Taoiseach’s new favourite phrase. (It’s also the phrase on the minds of many of his backbenchers, who have formed the opinion that their boss isn’t fit for purpose any more.) The figures for Toxic Tuesday were worse than most imagined. The banks had tried to talk themselves out of their problems, and the Government, for too long, was well disposed towards listening to them. That’s all changed. “At every hand’s turn, our worst fears have been surpassed,” said Lenihan, who at least had the good grace not to sound surprised.
He talked calmly of the tens of billions to keep our banks and building societies in business. More than €20 billion alone to keep the rotten institution that was Anglo Irish Bank under Seán FitzPatrick in business.
It’s our money that’s keeping them afloat, which means we all own a few banks now. It can’t be long now before the bumper stickers and T-shirts appear with the slogan: “My Other Bank is a Building Society.”
Brian Lenihan did his best to sound optimistic. He didn’t look it – nor did the rest of the Fianna Fáil front bench. But at least we are keeping up with the Joneses. He says the neighbours are very impressed. There was “widespread international confidence engendered by last December’s budget”, said the Minister. “The citizens of this country have shown grit and determination in facing up to our severe budgetary difficulties and it has paid off.”
Where, exactly, he didn’t say. Perhaps he meant the Greens, who are doing handsomely out of this Government.
Brian urged the public to look on the bright side. “Others believe in us. We must begin to believe in ourselves!” he exhorted.
“Not today,” snorted Fine Gael’s Paul Kehoe.
Richard Bruton and Joan Burton blew Lenihan out of the water. They focused on the disgusting amounts of
taxpayers’ money needed to keep the developers’ piggy bank – Anglo Irish – from going under. “It is simply wrong for Ministers to come in here and pretend that taxpayers have an obligation to pay off all that money,” said Bruton. “It’s wrong . . . [that] it’s monopoly money. It’s no such thing. It’s hard cash that our grandchildren will have to pay.”
The Opposition was in no doubt that the decision by the Government to commit, for years to come, so many billions of taxpayers’ money to the banks will have disastrous consequences for the country.
By the look on the faces of many across the floor, they aren’t so sure about it either. The shocking figures about Anglo Irish Bank hit them hard.
Fit for purpose? The banks or Biffo’s Government?