Monday 29th September 2014
Now revealed – the Troika threatened to bankrupt Ireland if bondholders were burnt
Honohan: ECB officials agreed to threaten Ireland with bankruptcy if the government tried to burn bondholders
Senior European and European Central Bank (ECB) officials agreed to threaten Ireland with national bankruptcy if the government made any attempt to burn bondholders, it has recently being revealed.
The threat was made at a high-level teleconference meeting, details of which have been revealed for the first time by the Central Bank governor, Dr Patrick Honohan.
Mr Honohan, who famously told the nation Ireland would be entering the Troika bailout programme live on radio as government ministers were publicly denying it, also revealed he was kept out of loop about the meeting.
In a new book about the late Brian Lenihan, Mr Honohan said he only found out about the meeting after the Troika delivered the ultimatum to Mr Lenihan on November 26, 2010.
“The Troika staff told Brian in categorical terms that burning the bondholders would mean no programme and, accordingly, could not be countenanced,” Dr Honohan writes. “For whatever reason, they waited until after this showdown to inform me of this decision, which had apparently been taken at a very high-level teleconference to which no Irish representative was invited.”
Dr Honohan’s revelations will add more fuel to claims that Ireland was “bullied” into the bailout.
They are also likely to lead to growing demands here for former ECB president Jean-Claude Trichet, who played a central role in the Irish bailout and the handling of the Eurozone crisis, to appear before the banking inquiry over the coming months.
The ECB last week came under renewed criticism for failing to publish a letter sent by Mr Trichet to Mr Lenihan during the same period of November 2010, despite a request from the European Ombudsman, Emily O’Reilly.
ECB president, Mario Draghi, last week told Irish MEP Brian Hayes the bank would discuss the question of Mr Trichet’s possible appearance before the banking inquiry, and that he could have a response by November. Mr Hayes subsequently said that if Mr Trichet cannot attend the banking inquiry, the ECB should “provide documentation and, where relevant, officials” to assist the inquiry.
Meanwhile, the former European commissioner Olli Rehn yesterday said he would “consider seriously” appearing before the forthcoming banking inquiry if he is asked to do so.
Mr Rehn, who stepped down as Commissioner for economic and monetary affairs in July, said decisions made by the ECB and the European Commission were taken when euro zone economies were “in a freefall”.
Speaking on the Marian Finucane Show, Mr Rehn said that while he was not very familiar with the proposed banking inquiry, “it is both reasonable and useful that in Ireland a profound analysis of the crisis will be done”.
The book, Brian Lenihan: In Calm and Crisis, extracts of which appear in today’s Sunday Independent, was commissioned by friends and family and contains essays on his handling of the crisis by colleagues, including Dr Honohan and IMF chief Christine Lagarde, who was then finance minister of France.
In one extract, Dr Honohan reveals that the Troika appeared to be considering “burning” some senior bondholders in the negotiations which followed Ireland’s application for a bailout.
Dr Honohan was involved in the ECB decision to press Ireland to ask for a bailout and supported it, because of the enormous growth in emergency loans from the Central Bank to the banking system from the middle of September.
He says government reluctance to apply for a programme explains his dramatic interview on RTE’s Morning Ireland on November 18, 2012, saying that Ireland would go into a bailout, but he did not realise other cabinet ministers had not been kept informed of what was happening.
“Things had got to the point where, had it remained silent on the state of play, the Central Bank would have not only failed in its responsibility to use timely communication to steady confidence, but would also have dashed a legitimate public expectation in Ireland that the Bank could be trusted not to deceive through omission,” Dr Honohan writes.
“What had not occurred to me was that Brian might not, even by that stage, have communicated to some of his senior ministerial colleagues how far down the road the discussions had already gone.
“Clearly, the interview was inconvenient for him, but he understood, as he
Phil Hogan defends handling of Irish Water costs after new memo discovered
Former environment minister says he signed off on overall start-up costs for Irish Water
Former minister for the environment Phil Hogan is due to appear before a committee of the European Parliament on Thursday for a hearing to approve his nomination as the new EU Agriculture Commissioner.
Former minister for the environment Phil Hogan has defended his handling of the manner in which he approved the start up of Irish Water.
Mr Hogan said he had signed off on the overall figure required to establish Irish Water, including hardware and software systems and a billing system, all of which were necessary for the state company to get off the ground.
“There was a robust examination of all the costs associated with the establishment of Irish Water by New Era and the National Development Finance Agency.
“The figures were then verified by the regulator and I ultimately approved them. All of the costs were approved and independently verified as necessary for the establishment of the new company,” Mr Hogan told The Irish Times.
He was responding to a report on RTE’sThis Week programme which said Mr Hogan had been informed in December 2012 that Irish Water had allocated a sum of more than €40 million from which consultants, among others, would be paid.
On Thursday Mr Hogan will appear before a committee of the European Parliamentfor a hearing to approve his nomination as the new EU Agriculture Commissioner.
Documents obtained by RTE under a Freedom of Information request showed the allocation was approved by Mr Hogan more than a year before a controversy over Irish Water spending on consultancy services developed.
That controversy arose last January when the chief executive of Irish Water John Tierney told an Oireachtascommittee that over €50 million had been spent on consultants.
The latest document to be released is a confidential memo written by a senior official in Mr Hogan’s Department. It included an assessment of progress being made late in 2012 on the setting up of Irish Water and the Government’s wider water reform programme.
The document refers to the provision of a sum of €43.5 million out of which Mr Hogan was informed external consultants as well as seconded staff from Bord Gais and local authorities would be paid.
The document pointed out that the bulk of the allocation would be spent on “new systems” including billing and call centre systems which were essential to get the new utility up and running and be in a position to charge customers for water.
World stock markets set to keep on rising well into 2015
Despite warning that markets are very high, analysts believe the bull run will continue well into next year, according to a global poll
Global stock markets will keep climbing as they shift away from a liquidity driven rally to focus on growth expectations, although many strategists also warned in a worldwide Reuters poll that prices are already very high.
Accommodative monetary policy has driven a bull market in stocks in recent years, but the Bank of England is expected to raise interest rates early next year and the US Federal Reserve not long after, tempering future gains. But as that won’t happen unless those economies are on a firm footing, US and British stocks are expected to lead the charge next year. That suggests there is a subtle shift away from central bank cash to economic optimism.
“The Fed won’t raise rates unless the economy is strong enough to stand it, and that means higher equity prices,” said David Joy, chief market strategist at Ameriprise Financial in Boston.
Just as those central banks tighten policy, the European Central Bank is more likely to be doing the opposite. Additional stimulus would add some short-term support to eurozone stocks, with Italy’s FTSE MIB – already up 9pc in 2014 – expected to be the biggest beneficiary.
But analysts lowered their forecasts for eurozone stocks from a poll taken in June. That comes despite a falling euro, which should boost corporate earnings in the coming quarters and may give a lift to inflation and eurozone exports.
“This will be a very delicate turning point for stock markets, even though it won’t change the bullish medium-term trend,” Xavier Lespinas, head of equities at Swiss Life Banque Privee, said. Nearly all the almost 250 analysts and investors polled in the past week predicted markets would rally – with several indexes reaching new highs.
Equity fund managers raised their net long positions in S&P 500 futures contracts, data last week showed. The MSCI World Index, which tracks stocks from developed economies, is currently around 1,723, not far off the all-time high of 1,765.77 points reached in July.
European shares are poised to rise about 2pc by the end of December and the S&P 500, already close to a record high, should keep pace with them. That compares to more buoyant 5pc gains in India and Russia and 4pc in China. One index from developed economies that is expected to do well is the FTSE, predicted to jump over 4pc to a new record high.
The performance of Brazil’s Bovespa, however, will depend on October’s presidential election.
Presented with both options, the poll showed the index would fall 12pc if incumbent president Dilma Rousseff is re-elected, but would rally by the same amount if she loses.
Strategists noted stock prices in China and other parts of East Asia remain relatively cheap compared with US and European shares, though rising US interest rates may cap gains.
Asian markets, bar India, have generally lagged the global bull run this year amid worries over China’s slowing economy, though Beijing is expected to roll out more stimulus measures in coming months to shore up growth. The Shanghai Composite Index is up over 10pc this year but most of those gains have come in recent months as investors bet on further policy easing from the People’s Bank of China. That comes despite widespread concerns over a falling property market and no clear drivers for a major pick-up in growth.
Still, stock prices there look relatively cheap after a steep fall in 2013 and the first half of this year.
“We’ll see some funds switching back from developed countries to seek opportunities in other markets,” said Ben Kwong, director at KGI Asia.
Indian shares, which have soared more than 25pc so far this year on anticipation and follow-through after a landslide election of a new government in May, will jump to new record highs over the next year and beyond.
If Russian shares make their expected gains they will still finish the year some 13 pc lower after months of heavy selling pressure linked to the Ukraine crisis. Russian assets have plunged on several occasions this year as markets fretted over Russian military intervention in Ukraine and as Western powers imposed several rounds of sanctions targeting key sectors of the Russian economy.
“Russia is a bungee-jumping market. You fall probably more than you should, get close to the water but then you get pulled right back up,” said Erik DePoy, an equities strategist at Gazprombank in Moscow.
Complaint to Gardaí over Feighan role in Roscommon scuffle
Byelection candidate John McDermott says he had no option other than to make statement
A screen grab from a video showing the apparent scuffle between Deputy Frank Feighan (centre) and John McDermott (left, dark jacket).
An allegation of assault by Fine Gael TD Frank Feighan has been reported to gardaí following a scuffle in Co Roscommon on Friday.
Roscommon/South Leitrim byelection candidate John McDermott, who is also chair of the Roscommon HospitalAction Committee, made a statement on the incident at Roscommon Garda station at yesterday evening.
Mr McDermott said he made the complaint after Mr Feighan’s failure to contact him directly to apologise and the TD’s “half-hearted” statement issued to the media yesterday.
“He left me with no other option. It is up to the gardaí now. They said they will review any CCTV and news video footage and decide whether a file should go to the DPP,” Mr McDermott said today.
Mr Feighan yesterday apologised for his involvement in the scuffle in Co Roscommon where Taoiseach Enda Kenny was heckled over broken promises in relation to Roscommon hospital.
The scuffle started when Mr McDermott sought to approach the Taoiseach as he arrived in the town on Friday.
Deputy Feighan, aided by two other Fine Gael supporters, stepped in to hold and then shove Mr McDermott back.
Mr McDermott claims he received a number of elbows into the stomach from Deputy Feighan and described the use of force as “unwarranted” and “cowardly”.
While Deputy Feighan later acknowledged there had been a scuffle he insisted the incident was a “collision” between him and Mr McDermott.
In a statement, he said on arrival he had “formed the opinion that the Taoiseach was going to be confronted in an aggressive and physical manner”.
“In hindsight, I misread the situation and overreacted in a tense situation,” he said.
“I regret if any actions of mine caused hurt to anybody especially the Hospital Action Committee candidate and former Roscommon senior county goalkeeper, John McDermott.”
After shouts and heckling calling for the reopening of the 24-hour emergency department at Roscommon hospital, Mr Kenny defended the decision made three years ago to downgrade it.
Asked whether he would like to apologise to the people of Roscommon for the broken promises on the hospital the Taoiseach said: “Well when I spoke here in Roscommon before the general election I made my comments based on the information I had then. It wasn’t for me to determine professionally, clinically, or ethically the standards that were required and that applied in the accident and emergency unit”.
The Taoiseach said the Model 2 hospital had “an outstanding future” and would benefit from an investment of €20 million.
It was while in Roscommon that Mr Kenny also accepted responsibility for the controversial decision to appoint Seanad byelection candidate John McNulty to the board of the Irish Museum of Modern Art.
Doctor says sorry for hurt caused to husband of tragic Dhara Kivlahan
A Consultant apologised to the family of tragic mother Dhara Kivlahan for any hurt caused following a heated exchange while she was in hospital care.
Consultant anaesthetist Dr Seamus Crowley recalled that Michael Kivlehan was “confrontational and angry” when he tried to explain why his wife did not need to be admitted to intensive care the day after her baby was born.
Dhara (29) died in Belfast‘s Royal Victoria Hospital on September 28, 2010, four days after being airlifted from Sligo hospital where she had given birth to her first baby.
The coroner’s court in Carrick-on-Shannon heard of an exchange between Mr Kivlehan and Dr Crowley, who said he was “provoked to ask if he was a nurse or a paramedic”.
He said that he was sorry if he had insulted Mr Kivlehan.
He said Mr Kivlehan was anxious and frustrated. “I certainly did not mean to offend him”.
Mr Kivlehan had told him he was patronising when they were discussing the need to move Dhara to intensive care, he said.
Under cross-examination, he said Mr Kivlehan had mentioned that he spent time in King’s College Hospital – so maybe he could use medical terminology with him.
The consultant said he had told Mr Kivlehan that because his wife was of Indian origin, it would make jaundice “more difficult to appreciate”.
But he stressed he had reassured Mr Kivlehan that blood test results were what he would base his clinical assessment on.
“Jaundice is just a clinical sign. It is not a disease,” he said.
Mr Kivlehan earlier told the coroner’s court that he was too stunned to respond when Dr Crowley said it was hard to tell whether his Indian wife had jaundice. Coroner Eamon MacGowan was told that the consultant was upset by this.
Mr Crowley said he had reassured Mr Kivlehan that his wife had been assessed by the obstetric team and himself, and that the obstetric staff would remain in close contact with ICU. She would be reviewed again if she deteriorated.
Asked whether he agreed that Dhara was in acute renal failure on September 22, the day after her baby was born, Dr Crowley said in his opinion “she had ongoing acute renal injury”.
Pressed on why she had not seen a renal consultant until September 24, the day of her transfer to Belfast, he said she was under the obstetrician Dr Raouf Sallam even after she was transferred to ICU. “I cannot account for why Dr Sallam did not refer her for a renal consult,” he said.
Dr Crowley added that he did not know why Roger Murray, solicitor for the Kivlehan family, was asking why this had not happened by September 22 – it could have happened earlier.
Mr Murray said he was “absolutely right” – there was a 96-hour delay rather than 60 hours as previously suggested.
Ms Kivlehan died days after giving birth to her son Dior, now four, by caesarean section.
A nurse who cared for Dhara in Sligo also told the inquest that she did not tell Mr Kivlehan to “stop eavesdropping”.
Asked whether she told Mr Kivlehan if wanted to make himself useful he should go downstairs and get his wife a drink, she said: “I might have asked him to go to the shop”.
The Bigger the Tusk, the sexier the Narwhal
It turns out that size does matter. For narwhals, anyway.
A new study of the Arctic whale affectionately called the “unicorn of the sea” suggests that the tusk of the male narwhal plays a key role in attracting females.
The study, which analyzed anatomical measurements of 144 narwhals, demonstrated a “significant relationship” between the length of a narwhal’s tusk — actually a protruding canine tooth — and the size of its testicles.
In short, the study showed that the bigger the tooth, the bigger the testicles — and, presumably, the greater the animal’s fertility. So just as peacocks with big, beautiful tails are more attractive to peahens, male narwhals with big tusks may be more attractive to female narwhals, the researchers said.
But the narwhal’s iconic tusk isn’t just about turning on the opposite sex. Narwhals have also been known to use their tusks to fight other males. And as Science magazine noted, it’s been speculated that the narwhal tusk may be an ice breaker or a tool for foraging as well.
In 2005, Martin Nweeia, a dentist who teaches at Harvard School of Dental Medicine, offered up another explanation. He said at the time that the whale’s tooth — which is said to be extremely sensitive — could be a sensor used to detect changes in water temperature and salinity.