Some blog readers have bristled at invoking reputational damage as an argument against policies such as defaulting on bank liability guarantees. I have sympathy with this reaction given the elasticity of the concept, and because it is often thrown out as a sort of argument stopper. But there is still no getting away from the fact that Irelands reputation for institutional soundness matters for both domestic and international investment. It is hard not to worry that this reputation is being damaged by some recent crisis management policies.

The crisis has certainly exposed institutional deficiencies, not least in the area of policy making. Yet the rotten institutions view of the Ireland seems greatly exaggerated. Ireland scores well on various international comparisons of institutional quality. Perhaps the most comprehensive set of measures of institutional quality is the World Banks Worldwide Governance Indicators (overview paper here). On the Rule of Law measure one of six aggregate measures of institutional quality in the WGI dataset Ireland ranked 13th in the world in 2009 (94th percentile). Another influential World Bank comparative effort at measuring the quality of business environments is the Doing Business report series. The summary page for Ireland for the 2011 report is available here. It is noteworthy that Ireland ranks an impressive 5th in the world for protecting investors.

While it is difficult to get convincing measures for how much a reputation for institutional soundness matters for Irelands ability to attract FDI, available empirical evidence (and commonsense) does point that direction. A recent IMF study found that measures of judiciary independence, for example, are significantly related to flows of FDI for advanced economies, with the effect particularly strong for services-related FDI.

Until recently, the government seemed to be doing a good job in difficult circumstances protecting Irelands reputation for investor protection. Institutional strength is perhaps best demonstrated when protecting the unpopularand bankers and developers certainly fit that bill. By themselves, each of the recent moves the emergency bank resolution measures, changes to Section 23 reliefs, and the ultimatum relating to contracts for banker bonuses might raise an eyebrow, but not change fundamentally the perception of the investment environment. Together, and the sense that all bets could be off in a crisis environment, they suggest a more troubling shift. To compound the threat, although some members of the opposition have voiced the need for caution, there is a sense the entire political debate is moving in a more populist direction.

Whatever the agenda of the letter writer, the danger is summed up well in a letter published in Fridays Irish Times:

It is my firmly held view that some of the proposed changes to property-related tax reliefs are unconstitutional.

In Ireland, parliament is not supreme. The will of the people (the electorate) as expressed through the Constitution is supreme and the Oireachtas and government may not act outside the parameters of the Constitution. This is a manifestation of what is known as the rule of law.

The government wanted to encourage private funding of property development.

It promised taxpayers that they would receive relief from tax on rental income if they invested. Many taxpayers relied on that promise and invested.

However, the Government wants to retract that promise. To do so is clearly unfair – in legalese it is described as “an unjust attack upon the taxpayers’ property rights”. Recent case law suggests that such encroachments upon citizens’ property rights can be justified if they are necessary to address “an extreme financial crisis or fundamental disequilibrium in the public finances”. In other words, if the Government did not act, the State would go bankrupt.

The retraction of the promise of tax relief is simply unnecessary when raising future taxes will do. In truth, the retraction is a populist gesture. It is crucial that we do not trounce the constitutional rights of certain groups of people simply because it is currently popular to bash those groups. Otherwise, the rule of law – the notion that the Oireachtas must act within the Constitution – is meaningless. – Yours, etc,


Red Arches Drive,

Baldoyle, Dublin 13.

39 replies on “Reputation”


Until recently, the government seemed to be doing a good job in difficult circumstances protecting Ireland’s reputation for investor protection.

I am not sure where on your timescale ‘recently’ exactly is placed, but the omnipresent reputation argument has lost a lot of weight for me, knowing from the ‘recent’ past how the criterions are distributed.

The notion of a damaged or a very good reputation accepts the defining criterions, and may be it is time to question the latter. – Just a thought. –

Interesting to raise the issue of reputational damage on issues such as withdrawal of section 23, when arguably the real reputational damage was done by the encouragement of moral hazard exemplified by the bailout of bank bondholders.
As regards the issue of property rights as expressed by the IT letter writer it seems to me that it pales in comparison with what was done to Eircom shareholders who were forced to sell their shares at wha seemed to be aknockdown price agaainst their wishes to Tony O Reilly.
Also if it is true that the withdrawal is unconstitutional – there seems to me to be an obvious recourse – i.e challenge it in the courts.

For the argument to be true, governments would never be allowed to raise tax rates, only lower them.

Even if that argument is not true, what is the impediment to the state raising specific taxes on rental income of property investors; those chaps might want to be careful what they wish for.

In the manner of “be careful what you wish for”, if it is not within the power of a government to remove a tax break, it is probably also not within the power of a government to grant it in the first place. Specific tax breaks have the effect of subsidising one property owner with the income of another property owner. The rights of the second owner could be argued to be infringed.

Personally, as a flat taxer, this last point would suit me down to the ground. Unfortunately, there is one slight flaw with the argument. It is b*llocks. Otherwise CGT and, in particular, CAT would be unsupportable. The idea that you can not dispose of property whether by sale or gift without the state taking a portion would seem the ultimate abrogation of property rights. Yet they are both constitutional…

Somewhat OT:

Have a look at this recent presentation at Johns Hopkins University by James G. Rickards using systems analysis. It looks at global economics using a dynamic systems approach. He’s skillful at using vivid practical examples to put across complex concepts.

Rickards sees economic instability as the greatest threat to international security.

It’s riveting and ties together quite a few topics discussed here. Ireland is mentioned several times as an example of certain phenomena.

Touched as I am by PAUL BRADY AITI BL BCL’s concern for the beneficiaries of Section 23 relief, surely NAMA (which is artificially preventing the rents ofvthose same benefiaries from falling to zero, their true marekt value) and the whole bank rescue, for that matter, has been “an unjust attack upon the taxpayers’ property rights”

Government can and does remove tax breaks and impose new taxes in an unjust manner all the time. It’s generally perfectly legal and is quite likely legal now too. It’s the other side of the sectional preferences tax policy most modern states have developed. One week you’re favoured, next week you’re not.

In any case, the state is also in a crisis so the AG has a 2nd line of defense.

This government has enacted laws according to it’s own perceived necessity. Only supranational powers who know they can force the government to comply will “trust” an Irish government again. Our reputation is in tatters. This is not a Credit Institution (stabilisation) Bill 2010. it is a government stabilisation 2010 bill, a cobbled together solution that might keep our democracy going for another 12 to 15 months.

Only a fool would ever take the word of an Irish minister seriously again and only a bigger fool would invest money in a system that morphs legislatively depending on what the latest perceived crisis is. Put another way, it changes whichever way the wind is blowing.

Re section 23 etc., the government have introduced retrospective taxation, they have welched on explicit written contracts. Many of these tax breaks were paid for up front. Lenihan has shown there is one law for foreign investors and another law for our own citizens who it is believed, can be bullied by edict style legislation. This will lead to the courts and people suing for vindication of their contracts for all the good it will do them because democracy and constitutional law is dead and buried in Ireland. The Constitution is a mere encumbrance.

Investors will do two similar things (a) refuse to continue to service negative equity loans (b) default on said loans blaming the government for imposing bankruptcy. Therefore, prepare to see a further plunge in property prices in the new year as another one of the ministers cluster bombs explodes. 25% or so would seem about right, across commercial and residential sectors which are much more interconnected than people realise.

At this stage, Lenihan and his unwise attorney Paul Gallagher have forced through two draconian pieces of legislation both of them are akin to Marshall Plans. They have ridden rough shod over all and sundry using specious arguments. This is very, very dangerous stuff. I don’t care how many high or supreme court judges, who know what side their bread is buttered on, tell me about NAMA’s constitutionality. I expect a déjà vu with the Bank Stabilization Bill 2010. At some point, all this is going to unravel and fall apart.

I resent the suspension of democracy and the imposition of these ill thought out panic pieces of legislation. NAMA has already failed miserably. The more I read yesterday’s IMF “report” the more I realise that they have no real understanding of Ireland. The cut and paste method has been used and it has no chance of working, that has been acknowledged by reference to another “bailout” after this one fails.

HAAAA!!! Good reputation in protecting investor interests….voted on by those very investors that measure friendliness by the losses they suffer!! Never never is it possible that an “investor” would make a bad investment and lose money….ohhhhh Nooooo, all losses are the result of poor regulation or government interference…..all profits are due solely to investor expertise!!!!! …..please pay your 2 plus 20…………. and please DON’T ask any questions!!

And that pr#ck with his rant about property taxes should be quiet….let the government cut all bin collection services, street cleaning, police and maybe even street lighting, because they are obviously provided to benefit property owners…let’s see what would happen to the value of his sh#box “investments” when he finds that most of the other owners in the street for his various investment properties are also speculators and only those areas, where houses are owner occupied, will there be a community healthy enough to fund these essential, services.

@John McHale,

I tend to prefer the US parlance of ‘no taking without due process’. That doesn’t mean there can be ‘no taking’; it simply means that due process must be observed. In this sense I agree with Hogan and Tim O’H and I find the argument advanced in the letter you quote a tad disingenuous.

The EU’s Grand Panjandrums recognise that there will have to be ‘takings’, but they are struggling to establish appropriate legal arrangements to govern these ‘takings'(since the EU is governed by the laws established in, and via, the EU treaties) – and to minimise the extent to which ordinary citizens may be required to finance some compensation for these ‘takings’ to ensure the stability of the EZ financial system.

Where I share your concern is that governing factions, facing the prospect of political oblivion and protected from the discipline of the international capital markets, are exercising their executive dominance to take without due process with the primary objective of shoring up political support and a limited secondary objective of reducing the fiscal burden.

It was the abuse of extreme executive dominance that caused the severity of these problems – and has done the most damage to Ireland’s reputation as a badly-governed country. Applying this extreme executive dominance to secure what is advanced as a component of a remedy to the problem compounds the problem even more.

But we’re into the realm of institutional economics here and there doesn’t seem to be much appetite for this as it tends to reveal the limits of conventional economic analysis.

We won’t make much progress until economists and the political classes throw off their respective strait-jackets.

When “reputational damage” is brought up it seems to me that an empirical claim is being made, specifically, that sovereign defaulters have difficulty in returning to the credit market long after the crisis which gave rise to the default has been resolved. That claim is simply false. Reinhart and Rogoff documented the fact that sovereign default is really quite a common occurrence. People who had read up on the history of banking knew that all along.

That doesn’t settle any ethical question of course. To say we can get away with defaulting certainly doesn’t mean we have any right to do so. But it would be nice if we could get past having to dispose of imaginary “hard facts.”

re: Maybe this post should be titled “Property Rights”.
+1, In bloggers jargon.

I am astounded by the fact that multiple property owners believe
they have cause for complaint. These were the very group of people that with the assistance of the banks using other peoples money fuelled the bubble to the point where it bust both banks and country. Too bad if they themselves are caught in the maelstorm.
I am equally astounded that the removal of massive tax breaks for multiple property owners should be afforded an editorial sympathy in the middle of a economic crisis with the government reducing allowances for the blind for the second successive year.
Bear in mind also that multiple property owners have been given a dig-out of between 7% and 8% in the recent budget in the form of a reduction in stamp duty. This reduction will ultimately reflect itself in an increase in property prices of equivalent value.
These people have real neck. Here is the answer to the their squeels for rights.
Tell NAMA to dump its apartment property portfolio forthwith. It is perfectly within the State’s right to do. These people would then have more pressing matters to complain about then.

D Straus-Kahn in a Bloomberg interview last night was quite clear in his view that bondholders should bear the costs of failure. The IMF view is that a bank/ financial levy be introduced to create a fund to absorb losses within the sector itself.
He did admit that there was not much support for this view yet.
Also pressed on his intentions for 2012, he was suitably evasive. I take that to mean yes. So it is possible that we will have a French president committed to solution to the bank issue that does not involve passing the bill to schmucks.

@ John McHale

‘Institutional strength is perhaps best demonstrated when protecting the unpopular—and bankers and developers certainly fit that bill’

That’s a fair point, but we are a long way from the wholesale abrogation of property rights in the manner carried out elsewhere in the course of history. As others have pointed out, it’s a conflict between differerent types of property right, and it’s hotting up.

I suppose the scenario is unprecendented in constitutional terms, and we can blame Grenspan for that. It is the ‘free markets’ experiment, as juiced up exponentially by the global financial services industry, which has created this train wreck.

@Robert Browne has rightly pointed out another conflict in addition to the taxppayer/bondholder row at EZ level. That is the conflict between foreign bank investors and Irish property investors. A new seam for for the lawyers to mine, and a new hit on assets.

The political process is about distributing the losses from a credit bubble. @ Paul Hunt’s point about institutional economics is a good one. There is surely a difference betwen protecting the investment function, and protecting particular individuals, corporations and institutions.

Capital investment, in the financial markets sense, is just one form of investment. People invest their lives too. The public is as suspicious of the politicians as it is of the bankers, developers and lawyers, but things are still moving very fast.

A ‘solution’ which is perceived to favour insiders will fail to sustain the necessary public support over the long term. It follows that the proper remedy for populism is reform of our democratic institutions and our professions. Brick by bloody brick.

@ Bklyn Rntr

Maybe you meant to say ‘that pr*****y specialist’. This blog will be the poorer if @ Robert keeps quiet.

@Paul and others

On reflection having seen the comments, including the letter from Mr. Brady is a distraction from the main point I want to make. I included the letter because of the strong statement about populism (a link would have sufficed). But the letter writer is making a more fundamentalist statement about property rights than I would go along with. Hogan, Hugh and others make the valid point that capital tax changes occur frequently, and we do not typically view those changes as fundamental infringements of property rights. Paul’s principle of “no taking without due process” better captures my view.

My point really is a more pragmatic one: that stable “rules of the game” are critical to the investment environment. Of course, the nature of the rules themselves matters, but it is a large disadvantage if investors fear capricious changes in those rules. Up until now, this has been a major strength of the Irish economy, and keeping that strength is critical to a return to stable growth. I do fear the signs that a self-defeating populism is getting the upper hand, and some of the comments here do nothing to diminish that fear.

@Joseph Ryan,

I agree that DSK in the Elysee would augur well, but I doubt that formidable female politicians such as Royal and Aubry (plus a host of male political pygmies) are disposed to sanction DSK’s coronation as the Socialist candidate – which is what he wishes to ensure before jumping from his IMF perch.

My sense is that the ‘bondholders v taxpayers’ issue will come to a head in the EU sometime in 2011 – and sooner I expect rather than later. This is the pragmatic dimension – as distinct from the principled dimension raised by John McHale – of any talk about Ireland defaulting. There is a high probability of a debt-deflation spiral if the current Troika deal is required to run its course. But there is a much higher probability that it won’t and Ireland’s fiscal exposure to its bank sector will be addressed in the context of an EU-wide solution. It quite simply does not make any sense to contemplate doing something unilateral that could scupper the chances of such a solution emerging.

1. Define populism?

2. As social scientists, are we not obliged to think about predictable consequences of government actions and non-actions? Do these predictable consequences not include political ones, and is this not why we have a field in economics called ‘political economy’?


No argument on 2.

My working definition of populism is an idea that sounds right to non experts but is not. At its worst, the purveyors know the ideas are wrong, but use such ideas to get votes, sell newspapers, etc.

I do see the democratic risks inherent in this definition. But I can’t see how we can ignore this phenomenon in the real world.

@Kevin Donoghue
“Reinhart and Rogoff documented the fact that sovereign default is really quite a common occurrence. People who had read up on the history of banking knew that all along.”
Indeed, but what is interesting is what constitutes default.
1. Domestic default is far more common than international default.
2. Covert default is more common than overt.

Raising the state retirement age to 68 is default. (Continuing to allow politicians and senior public servants to retire early is looting…). Reneging on tax promises is default (whether removing tax breaks or increasing tax rates). (Continuing to allow politicians expenses to be free from BIK is looting…).

“stable “rules of the game” are critical to the investment environment. Of course, the nature of the rules themselves matters, but it is a large disadvantage if investors fear capricious changes in those rules.”
Indeed, but investors know the game is rigged in their favour. The history of covert domestic default writes it so – it is individuals that suffer default events, not institutions.

I disagree with your definition of populist. It encompasses ‘popular’ and implies that only ‘experts’ have to ability or judgement to arbitrate. Popular ideas, universal health and education, for example, are fundamentally flawed from view of certain experts, but they are popular.

I think a sectional basis to a decision with an overt or covert hypocrisy (“I think those people should not be allowed, while those people should be allowed”) forms a better measure of populist. As a nation, we do hypocrisy better than many, so there is a lot of room for populist.

@ Kevin Donoghue

Reinhart and Rogoff documented the fact that sovereign default is really quite a common occurrence.

Actually, R and R differentiate between different classes of economies:

“As shown earlier, the frequency of default (or restructuring) on external debt is significantly lower in advanced economies than in emerging markets. For many high-income countries, that frequency has effectively been zero since 1800. Even countries with a long history of multiple defaults prior to 1800, such as France and Spain, present evidence of having graduated from serial default on external debt.”

[italics mine]
page 147 TTID, Reinhart and Rogoff

Sovereign defaults in advanced economies are not common, but unusual events. Indeed they are singularities. For this reason it is difficult to draw conclusions as to the duration or degree of the reputational damage caused — there really aren’t sufficient ‘case studies’ available for half-way reliable predictions to be made. So let’s not rush to judgment.

John McHale: “My working definition of populism is an idea that sounds right to non experts but is not. At its worst, the purveyors know the ideas are wrong, but use such ideas to get votes, sell newspapers, etc.”

In the sindo article linked in a later post, Colm McCarthy mentions “the notion that being kind to bank bondholders would somehow add to the attractions of government debt” which is a pretty good example of an idea which apparently sounds right to non-experts, but which is clearly wrong. The dangers of ‘populism’ (as you define it) are real, but if it is rising it is doing so from a high base. It has been doing damage for a long time. Also, economists are by no means without sin in that regard. So by all means condemn such tactics, but I do wonder whether your concern is with the tactics themselves, or with their use in promoting policies you don’t like? Is this just a matter of whose ox is being gored?

@ Bklyn_rntr

To put your paranoia at ease, Robert Browne has no section 23 property, I have nothing to “shelter” or hide. I have never written off a cent of taxable income against the multiplicity of tax shelters. I do know a lot about property but not from the angle you assume.

It is easy to hide under a pseudonym, make wild accusations, offer little if anything in the way of analysis. Why not post under your own name or would that be too embarrassing?

Government enacting laws by expediency is not a basis for democracy. These laws will be around long after we have fought our way out of this mess. I’d love to diss you for another half an hour but I am going out. Once the principle is breached it becomes the new norm.

@John McHale
Ireland’s sovereign reputation has already been hugely damaged by our banks. Our banks reputation is already in the gutter. We would gain significantly in reputation if we don’t bail out unguaranteed bank debt.

For guaranteed bank debt, not bailing them out would mean our banks would lose reputation and we would have to sell them to foreign banks with good reputations. But the sovereign would gain reputation by becoming more solvent. That is the clear message from the sovereign debt market. Very quickly we would gain even in banking reputational terms by having faced up to our problems and drawn a line under them.

Unfortunately all this is academic as our establishment are ECB whipped.

@Robert Browne
re “The Constitution is a mere encumbrance”

In so far as it was successful in protecting the less well off in society, I agree.
It should be first document to be binned. It is a legal document that gives rights to property at the expense of obligations to citizens.

@Joseph Ryan
‘It should be first document to be binned. It is a legal document that gives rights to property at the expense of obligations to citizens.’

I think that is a bit extreme. The Constitution protects many other rights and in any event the European Convention on Human Rights also affords protection for property rights amongst the fundamental rights. Even the bondholders would be protected under the Convention.


Speaking of ‘populism’ and ‘reputation – the so called ‘Irish-bail-out’ is now a ‘populist’ card being played by the far right in Europe – as evident in the vote in the Dutch parliament where Geert Wilders did not support the ‘irish’ vote and the Dutch social democrats stepped in to avoid a major embarassement to Irish reputation, as did the German social democrats [Left party opposed – why? Irish card must be flexible … ] – and also a card in rise of far right in Finland. Irish reputation in Europe is on the floor – major task for incoming Gov to provide some direction … and one expects some anti-EU rhetoric around here in coming weeks as well …

Unless we figure out a ‘debt’ strategy – reputation won’t matter.

“The notion that being kind to bank bondholders would somehow add to the attractions of government debt was peddled assiduously around Dublin over the past couple of years. This piece of bad advice has been tested at considerable cost and, unsurprisingly, it has not worked.”
From article. It follows that sovereign debt holders will welcome anything that provides greater protection for them. As defaulting on guaranteed senior debt will do so, that is what we must do.

Binning the constitution may seem extreme. But to paraphrase Groucho Marx re posterity -‘what has the constitution ever done for me’. The constitution seems to have relevance for wealthy or powerful sections of society who can have their cases adjudicated, generally with somebody else picking up the tab.
Has the constitution protected us from the worst misdeeds of our government and a cabal of cronies?

You make an interesting point re the European Convention on Human Rights.
If an Irish citizen took a case that his/her property rights have been adversely affected by the imposition of private sector debts not of his/ her making on his estate or property what would be the chances of success?

Another institution that could be done without-The Supreme Court. A few examples of how taxpayers money was used in the Supreme Court.
From Ir Independent Oct 22 2000.
“THE Chief Justice, Ronan Keane, is likely to lead the Supreme Court in determining whether Charles Haughey faces criminal charges which could lead to a two-year jail sentence.

It will be the second time that Mr Justice Keane has been placed in the embarrassing position of sitting in judgement on the man who has figured so prominently in his personal life.”

The Nov 25th 2010.
“THE MAHON TRIBUNAL will not be allowed to pursue the widow or estate of the late Liam Lawlor TD for legal costs he owed them at the time of his death.”

Like Madam, I am moved to ask ” Was it for this the men of 1916 ….”

Robert Browne,
My posts were uploaded before I saw yours and the second one referred to the content of the letter in the main post and not to your post.

And my ” paranoia” is driven by extreme frustration…are we seriously discussing the negative implications of changing the rules in the middle of the game, when banks and investors have just benefited from the most outrageous rule change ever. Remember the one where they got to pass their own debts onto the taxpayer to avoid losses? What’s that if not a rule change? On property taxes, are we really saying that it would damage ireland’s reputation to change tax rates today, when the country is in the middle of the DEEPEST CRISIS SINCE AT LEAST INDEPENDENCE AND PROBABLY SINCE THE FAMINE…we should change income taxes, spending plans, public sector salaries ( no sympathy there BTW but it serves my point) but we are going to honor a property tax regime that is clearly unfair??

On my identity, I chose to post under a pseudonym because I work as an investor and not because I want impunity to insult anyone. I frankly love this blog and I appreciate everyone’s comments. I have a lot of disdain for the economics profession because neo classical economic theories specifically exclude debt costs ( financial intermediation as they term it) and, having invented the can opener the theory proceeds to ignore the effect that excessive debt levels have on demand. I have made that point on many occasions here, but I hope I have not made personal statements disparaging anyones well considered opinions or their work.

Ireland is supposed to be a secular state but if you read the preamble to, and article 6 of the constitution we see that church and state have been wedded together since 1916. if current proof be needed, we have the 3 volume + 1 chapter of the Ryan Report and many, many other episodes such as the infamous mother and chid scheme and Noel Browne’s travails. I regard the proclamation as a more useful document but it was lost in translation on the way to becoming the 1937 Constitution. France is now on it’s 5th Republic.

Ireland is now beginning it’s (first) IMF/EU “bailout” it is living under the NAMA + The Credit Institution (Dail stabilisation) Bill 2010. Are we on our 2nd Republic? I believe so. People know that there is a sea change but we have yet to reform the Dail, draft any of the transformative legislation we have not even begun to reform the Public Sector. A taboo subject that frightens some people.

If we are not careful, before we even realise that we are on our 2nd Republic we will see much of our land dumped on the market sold off not to mention our forestry, which represents 7% of the land mass going the same way. As happened with our fishing rights and other natural resources. We have failed politicians being primed and priming themselves for onslaughts on our forestry, power supplies, health systems etc. All these matters need to be urgently addressed and if ignored will bring us quickly to civil strife as our debt mountain becomes impossible.

Going back to NAMA, perversely it was piloted through the Dail as a non Money Bill. Article 22.2.1 specifies that The Chairman of Dail Eireann shall certify any Bill which in his opinion, is a money Bill to be a money Bill.

Article 22.1.1 A Money Bill means a Bill which contains only provisions dealing with all or any of the following matters, namely, the imposition, repeal, remission, alteration or regulation of taxation; [the imposition for the payment of debt or other financial purposes of charges on public moneys or the variation or repeal of any such charges;supply; the appropriation, receipt, custody. issue or audit of accounts of public money; the raising or guarantee of any loan or the repayment thereof; matters subordinate and incidental to these matters or any of them”] [more important]

So how is 88bn of predominantly toxic bank loans taken onto the books of NAMA along with the issuance of NAMA bonds with their sovereign guarantee not a Money Bill? There is a “charge” on the tax payer and whether the myth of NAMA breaking even or not is even entertained the fact of the matter is that NAMA creates and has created charges on public moneys. This realization was demanded to be recognised by the ECB and is responsible for our current debt to GDP of 32%. despite Lenihan’s NAMA SPV ploy.

On the supreme court ruling on the McKillen case I am not convinced by the closing of ranks and commented on this at the NAMAWINELAKE–-the-judgement/

And One last thing Robert,
I completely agree that the government is overturning democratic tradition and the legal traditions of the country to save international investors and their friends in the banking system. I have said it before here, the “bailout” and, by implication the NAMA are corrupt and directly toxic to the very survival of Ireland as a viable state. Anyone that tries to overturn these provisions gets my support.

@Kevin O’Rourke

‘Populism’ as a social science term is being misused here. In my recollection, it had a defined meaning, ie appearing to be for the mass of people while not being being left-wing in any meaningful sense.

The classic examples were always given as Fianna Fail and the Argentine Peronistas.

The definiton then would be an outward popular rhetoric accompanied by a less trumpteted rigorous adherance to the interests of the ruling class. In Argentiana, the need to deliver something on the rhetoric would of course sometimes require some distribution of baubles to the ‘shirtless ones’, without any intention of taxing the ruling class to pay for it, led to repeated fiscal crises.

Sounds familiar.


I wrote the letter to the times. Believe it or not, I have no interest in section 23 relief. I do have great difficulty with retrospective legislation and I began writing on the topic 18 months ago. This was published in the Irish Tax Review in September 2009:

To simplify the debate: what if, when the National Solidarity Bond matured, the government decided that it would only pay out half the interest it promised?

The reason that Ireland has reputational damage and the reason that it has such high interest rates is because it refused to stand up to the senior bond-holders. Full stop end of story. This has already been proved. Compare Icelandic soveriegn gilts at 4% as against Irelands 9% and growing. Taking on the gambling debts of the banks have ruined this country and anybody who thinks otherwise has their heads in a cloud

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