Fianna Fáil now caught between a rock and a very hard place
THE PARTY MUST SUPPORT A FINE GAEL-LED GOVERNMENT OR TRIGGER AN ELECTION
If there is one thing that stirs the political loins of the ordinary Fianna Fáiler, it is the thought of Fine Gael “arrogance”.
Into that always open marketplace walked Richard Bruton this week, when he told RTÉ’s Morning Ireland there was no way Fine Gael would contemplate supporting a Fianna Fáil-led minority government.
“The arrogance,” sniffed one Fianna Fáil figure, summing up the mood that Bruton’s statement had pushed some sort of governmental arrangement with Fine Gael back a few more weeks. “It certainly didn’t soften anyone.”
Bruton was repeating what others including Enda Kenny and Leo Varadkar had said before and what Fine Gael TD Eoghan Murphy defended and repeated later in the week, dangling the political red meat in front of Fianna Fáil noses.
“This thing of ‘any colour as long as it is blue’ is not acceptable’,” said one Fianna Fáil TD. “They need to respect us and respect our voters.”
The reality, however, is that Fianna Fáil sensitivity betrays the truth the party has effectively already come to accept: it will almost certainly have to support or facilitate a Fine Gael-led minority government.
The Dáil numbers are against Micheál Martin and for that reason, the hearts of some Independent TDs might tell them Fianna Fáil – though their heads say Fine Gael.
Fianna Fáil outrage over statements from the mild-mannered Bruton may just be a tactic to delay the inevitable, but there is a genuine feeling that Fine Gael must soften its tone if the two parties are to work together.
Media battle
Martin and Kenny have committed to talking to each other once the Dáil vote on electing a taoiseach on Wednesday is out of the way.
In the likely event of the vast majority of Independents sitting on their hands, Fine Gael and Fianna Fáil will still continue to pursue a minority government while simultaneously talking to each other.
“Some Independents won’t declare at all, some will go to Fine Gael and we may get a very small few,” said a Fianna Fáil source, acknowledging the reality facing the party while predicting a government will not be formed for another three to four weeks.
Fianna Fáil TDs, however, do get a sense that Martin knows what he is doing and, bar some low-level grumbling about initially losing the media battle to Fine Gael, are happy with how the leadership is handling the post-election fallout.
A sizeable cohort of deputies have chosen to stay silent in case they say something that takes the party down a road Martin does not want to travel.
“A lot of us just don’t want to know,” said one. Another said: “There is absolute trust in Micheál.”
There are still some, notably Michael McGrath, the finance spokesman and head of the Fianna Fáil negotiating team, who are believed to be in favour of a full-blown coalition with Fine Gael. Dublin Bay South’s Jim O’Callaghan, who is also on the negotiating team, is another who has previously said he is open to coalition.
O’Callaghan is also understood to be the back channel through which Fine Gael made some sort of initial contact with Fianna Fáil, via a text message from Varadkar.
Party members are open to the idea of supporting a Fine Gael minority government, say TDs, but have not yet digested how it could work in practice.
Members of the parliamentary party admit they haven’t either.
“I don’t think a lot of them have thought it through, and we probably haven’t either,” said one deputy.
Martin this week told some TDs that their workloads will substantially increase in a Dáil with a strengthened committee system, news which will come as a shock to deputies who keenly tend the constituency.
Policy concessions
“I would describe things at the moment as trying to move to a European-style system of government without European-style politicians or voters,” said one party source.
The negotiations with Fine Gael could initially focus on how a minority government may actually work, which Fianna Fáil wants to be taken on a “budget-by-budget, issue-by-issue” basis. TDs believe such an arrangement could last two to three years.
It will also attempt to extract some policy concessions from Fine Gael, the most contentious of which will be on Irish Water.
Figures from both Fine Gael and Fianna Fáil concede the issue has taken on political importance out of all proportion to what it would cost to scrap the charges.
Fine Gael has held fast to its insistence that charging and a single national utility are fundamental issues.
Fianna Fáil maintains its position that water charges must be suspended for five years and Irish Water must be scrapped but party figures and TDs acknowledge that compromise is likely, although the feeling against water charges is stronger among some Dublin TDs.
Dublin Fingal’s Darragh O’Brien, however, said housing, homeless and families in mortgage distress were of paramount importance.
With Sinn Féin waiting to pounce, water will be one of the first issues settled between Fine Gael and Fianna Fáil.
“It has to be or the Shinners will bring down the government within one month,” said a Fianna Fáil source.
Second election
There is one thing almost all TDs, within and without Fianna Fáil, agree on: another election must be avoided at all costs?
Carlow-Kilkenny’s Bobby Aylward recently conducted a survey among 500 Fianna Fáil members in his own constituency.
He asked who would favour a possible coalition with Fine Gael and who would favour a second election.
Of the 200 responses, 80 per cent were against coalition and almost 100 per cent were against another election.
“Only two people said to me: go to the country if you have to,” he said.
The gap between the two results of Aylward’s straw poll is the distance over which Martin must bring Fianna Fáil in the coming weeks.
MEANWHILE:–
Fine Gael holds very constructive talks with the Independents
TALKS BETWEEN FINE GAEL AND INDEPENDENT TDS TOOK PLACE YESTERDAY?
Talks between Fine Gael negotiators and Independent TDs on the formation of a new government have been described as “very constructive”.
The Taoiseach said he hopes to have a list of priorities with the Independents by Wednesday.
Enda Kenny said they are working on 15 policy documents. The parties involved discussed economic matters.
No costings were provided but one proposal included the continuation of the phasing out of the USC as part of a medium-term tax plan.
A draft economic paper presented by Fine Gael to Independents at the meeting stated the party will seek Oireachtas approval to continue to phase out the USC.
The document, seen by RTÉ, said a medium term income tax reform plan will be published for consultation with the finance committee by July and approved by the Oireachtas in October.
It will be paid through non-indexation of personal tax credits, removal of PAYE tax credits for high earners, higher excise duty on cigarettes, a new sugar tax and improved tax compliance.
The plan also supports an increase in the minimum wage to €10.50 per hour.
Overall the Taoiseach said he did not know when a deal could be done. But he hoped Fianna Fáil will be responsible when he goes to them. He also again ruled out supporting a minority Fianna Fáil government.
Fianna Fáil have said they want to hold their talks with the Independents and for Wednesday’s vote to take place before talks with Fine Gael start.
It is understood there was a discussion between the participants earlier about credit unions and post offices working together as competitors to the banks.
Minister for Finance Michael Noonan told the meeting money will be tight next year but about €1bn will be available for taxation and spending.
He also referred to challenges such as public sector pay. He said that if all is going well after next year there will be a very strong outcome and more options.
Independents were briefed on a housing document and their feedback will be addressed in a final document.
There were requests to strengthen the role of credit unions in lending and to give NAMA a wider brief on social housing.
Some of the TDs also want the voluntary sector more involved in social housing and more accountability from county managers.
It also emerged this evening that the Independent Alliance will be holding its own talks with Fianna Fáil and not with the other Independents next week.
All 15 Independents have called on Fianna Fáil and Fine Gael to talk this weekend.
Michael Fitzmaurice said it was time for them to stop “pussyfooting”.
Independent Alliance TD Finian McGrath had said the door is “wide open” for a deal to be struck with Fine Gael – if guarantees on policy can be secured.
He described talks yesterday on housing and homelessness as “very constructive”.
Asked if he was confident a deal could be struck, Mr McGrath said he was confident because those sitting around the negotiating table were “serious” about the issues involved.
Asked when a deal could be agreed, he replied: “Monday or Tuesday.”
Independent TD Mattie McGrath said he does not think a deal can be done by Monday or Tuesday but they have spend 50 hours talking to Fine Gael and will talk to Fianna Fáil next week.
Another Independent TD, Denis Naughten, said: “Fianna Fáil and Fine Gael need to talk over the weekend, while the talks are adjourned, because they need to work out in practical terms how a minority government is going to work, and how they are going to get a budget through”.
Michael Harty said it was critical that the two parties stop wasting time and start talking over the weekend.
Central Bank says mortgage lending rules are here to stay
REVIEW OF REGULATIONS WILL NOT LEAD TO THEIR ABOLITION, SAYS THE CHIEF ECONOMIST.
The Central Bank chief economist Gabriel Fagan.
The Central Bank has again robustly defended its restrictive mortgage lending rules, saying they are “permanent”.
At the presentation on Friday of the bank’s quarterly accounts, chief economist Gabriel Fagan said the bank was working on a review of the rules, which will be published in November, but said this review would not lead to their abolition.
Mr Fagan warned against people equating a review with a change in the rules.
“We shouldn’t think of a change taking place,” he said, adding that the rules may not be changed at all or may be tightened.
Introduced in February 2015, the rules limit the amount home buyers can borrow, typically to 3½ times their gross income up to a limit of 80 per cent of the purchase price of the property.
Last month, the Central Bank issued a robust defence of the home loan caps, saying commercial banks and mortgage brokers were unable on their own to uphold “prudent” credit standards.
However, the rules continue to come under increasing criticism.
Addressing the wider economic recovery, the Central Bank revised its growth forecast upwards for the Irish economy for 2016 and is now predicting growth of 5.1 per cent, up from 4.8 per cent previously, “on the back of exceptionally strong rates of growth in domestic demand”.
However, it warned that Ireland’s economic recovery was “not complete” as it forecast “marginally lower growth” for 2017.
Overall the outlook for the economy remained “broadly favourable”, it said.
It is forecasting gross domestic product (GDP) growth of 5.1 per cent for 2016, up by 0.3 per cent from its previous forecast, and 4.2 per cent for 2017, down from 4.4 per cent previously, as it said domestic demand was now firmly the main driver of expansion.
While the economic outlook may be relatively favourable, the Central Bank also noted risks, including levels of public and private sector debt, which remain high.
As such, there is a “strong case for precautionary behaviour and prudence”, Mr Fagan said.
This would allow the next government to build up a buffer should adverse circumstances arise.
Wage growth prediction?
Wage growth was also cited by the Central Bank as a potential risk, as it warned that while there may be some recovery in wage growth, “it is important that that this process does not lead to overshooting”.
Political uncertainty at home may also be an issue.
Five weeks after the general election and with no sight of a new government, Mr Fagan said the uncertainty had so far not had a negative effect.
However, he warned that “protracted uncertainty could lead to an adverse impact”.
On the external front, the regulator said emerging market concerns as well as broader geopolitical factors were potential issues, as was the forthcoming Brexit referendum which “creates uncertainty and is a downside risk factor”.
Pointing to household debt figures, the Central Bank said gross new lending increased in 2015 with households drawing down €4.4 billion in new mortgage loans.
However, the figures also revealed that “a significant degree of deleveraging” was still under way in Irish households as they continued to reduce overall debt levels.
This ongoing decline might suggest that the economic recovery had, to date, been somewhat “creditless”, the Central Bank said.
Irish SMEs told to seek examinership to block vulture funds
Small firms advised to apply for court protection from owners of loans
Many funds that bought distressed Irish business, consumer and property loans from Irish-based banks are active in the courts system, filing summary judgment cases to make borrowers pay their debts.
Small businesses whose bank loans were bundled into portfolios and sold to “vulture” funds have been advised to consider going into examiner-ship to protect themselves should the funds call in their loans.
Hughes Blake accountants, which specialises in examinerships for small businesses, said seeking court protection from the funds could be a “valid tactical maneouvre”.
It said many of the funds behave differently from each other so businesses should familiarise themselves with the approach of the fund that bought their loan.
“[Some] are known for their aggressive and predatory style of doing business; others are more mindful of the social issues around their actions,” said Hughes Blake.
- Tax seems to be optional for ‘vulture’ SPVs
SMEs should research the owner of their loan and plan ahead for when it moves against the business.
Hughes Blake expects to see several smaller businesses use examinership to escape the funds in “coming weeks and months”.
Meanwhile, many funds that bought distressed Irish business, consumer and property loans from Irish-based banks are active in the courts system, filing summary judgment cases to make borrowers pay their debts.
High Court cases
Ennis Property Finance, which is affiliated with Goldman Sachs, has filed several cases in the High Court in recent weeks, as has the US giant CarVal via its affiliates, Emberton Finance, Pentire Property Finance and Stapleford Finance.
Stapleford was very active in the courts in the run-up to Christmas, filing a number of cases against prominent Irish business people and professionals, including barristers and solicitors.
On the consumer side, Cabot Asset Purchases, which is owned by US distressed debt specialist Encore Capital, is prominent among High Court listings for debt cases.
Ulster Bank, meanwhile, is preparing to sell loans attached to a large number of small businesses and their owners, after passing a deadline of last Thursday for the borrowers to indicate if they were able to refinance or face having their loan bought by a fund.
One Munster legal practice said several of its clients were told that even their performing loans would be sold if they were unable to refinance their distressed loans.
The signs of obesity can be identified in early years of children,
SAYS A NEW REPORT?
THE PATHWAY TO OBESITY CAN BE IDENTIFIED IN BABIES AS YOUNG AS SIX MONTHS OF AGE, SCIENTISTS HAVE SHOWN.
Researchers used simple body mass index measurements to single out infants destined to struggle with weight in later life.
Study leader Allison Smego, from Cincinnati Children’s Hospital in the US, said: “These children have a high lifetime risk for persistent obesity and metabolic disease and should be monitored closely at a very young age.”
Body mass index is a system of relating height and weight and expressed as kilograms per metres squared. In adults, a body mass index of 30kg/m2 or above is classified as obese.
Dr Smego’s team looked at several groups of lean and overweight children under the age of six. They included severely obese children referred to Cincinnati Children’s Hospital for specialised care.
The researchers compared 783 lean and 480 severely obese children, selected on the basis of their body mass index readings between the ages of two and six.
Growth and weight records showed the body mass index trajectories of children who were severely obese by the age of six began to differ from that of normal weight children at about four months of age.
“Body mass index at six, 12 or 18 months of age can accurately predict children at risk for early childhood obesity,” said Dr Smego, whose findings were presented at a meeting of the Endocrine Society in Boston, US.
She added: “It’s not currently recommended to measure body mass index in children under the age of two, but we say it should be because we now know it predicts obesity risk later.
“Paediatricians can identify high-risk infants with body mass index above the 85th percentile (top 15%) and focus additional counselling and education regarding healthy lifestyles towards the families of these children.
“Our hope in using this tool is that we can prevent obesity in early childhood.”
A study published in The Lancet journal on Thursday predicted that if current trends continue more than a fifth of people in the world will be obese by 2025.
The research, led by a team from Imperial College London, showed that over a 40-year period between 1975 and 2014 the global number of obese individuals had soared from 105 million to 641 million.
With each passing decade, the average person had become 1.5kg heavier.
Dopey Dick the so called killer whale that swam into Derry in 1977
IS STILL ALIVE AND VERY WELL
Whale experts discover orca they know as Comet is same killer whale that swam into Northern Irish city nearly 40 years ago
COMET THE KILLER WHALE (AKA DOPEY DICK) OFF THE WEST COAST OF SCOTLAND.
A killer whale that sparked widespread attention when it swam into a Northern Irish city almost 40 years ago is still alive and living off the west coast of Scotland, experts have found.
The whale was nicknamed Dopey Dick by locals after he made his way up the river Foyle into the heart of Derry in pursuit of salmon in 1977. He is now thought to be at least 58 and was identified when pictures of the Irish incident were compared with images taken of a pod of whales near the Isle of Skye in September 2014.
Known as Comet, the orca is part of the vulnerable west coast community whales – the UK’s only known resident population of killer whales – that are tracked by experts.
Andy Foote, a killer whale expert, said: “When I saw the photos on Facebook, I noticed that the white eye patch of Dopey Dick sloped backwards in a really distinctive fashion.
Ships’ noise is serious problem for killer whales and dolphins, the report finds
“This is a trait we see in all the west coast community whales, but it’s not that common in other killer whale populations. The photographs were all quite grainy, but it was still possible to see some of the distinctive features unique to Comet.
“I couldn’t believe it – he was already a full-grown male back in 1977, when I was just five years old.”
The Hebridean Whale and Dolphin Trust has been documenting the west coast community’s behaviour since 1994.
The four males and four females are not known to interact with other orca populations in the north-east Atlantic and, since studies began, have never successfully reproduced.
In January this year, one of the females, named Lulu, died after being stranded near Tiree.
The trust said the discovery that Dopey Dick was in fact Comet is significant to understanding the age of the west coast group.
Padraig Whooley, sightings officer of the Irish Whale and Dolphin Group, said: “This match places Comet very much at the upper limits of the typical life expectancy of male killer whales.
“Adult males generally live to around 30 years, but with an upper range of up to 50 to 60 years.
“So, clearly time is not only running out for this individual whale – it is equally running out for whale biologists, who may not have much time left to gather information on this unique local population of killer whales that have made the waters of the British Isles their home.”
