Economics 10/10/2009: Green (or Northern Irish?) Votes

This is to report few bits of information from the Green Party meeting tonight:

• 84% vote for the Programme for Government - which contains some good ideas (Site Value Tax / Land Value Tax) and some pretty bad ones...
• 31% against Nama.
  

Per several Green Party members exiting the meetings:

1. The Greens have sold the country to stay in power for another 6 months - the sentiment of several Party members who spoke to me. Reasoning: "we've been in the Government only a year and we need more time to make our policies reality". A fine argument assuming that once they lose power, their policies cannot be reversed/undone.
2. The country got another taste of the sanctimonious and perverse Green ways (also a quote from a Party member), where members voted for Nama as their price tag for PfG. In other words, they sold the entire nation's future by hoisting Nama on this economy in order to gain few token concessions from the FF - a truly Machiavellian pact.

Now, a note worth looking into in more details. Per my sources at the meeting, there was a number of Northern Irish Green Party members who were voting on both PfG and Nama. One of the discussions at the meeting was even chaired by a Northern Irish academic from Quinn's Uni. Presumably (not being an economist or finance professional) he had a personal stake in how Nama might work out... Greens are an all-island party, so their by-laws allow for this.

One of my sources alleged that these Northern Irish Greens were 'helped' to get to RDS by the party officials / leadership in order to secure today's vote. I was told that buses were used by the party to deliver them to Dublin. (I have no confirmation of this, so this is a rumor.)

So we might have a strange situation developing here:

• the taxpayers of this country have no say on Nama,
  
• while taxpayers of the other country do...
  

Democracy Irish-style?

Economics 10/10/2009: How not to do policy on banks

Corrected

Two independent sources have confirmed to me the following developing story. This is being reported as my sources alleged, with the following correction by an independent source.

Under the Environmental Pillar of the Social Partnership umbrella, several debates on Nama have yielded a wide-ranging support for two possible motions from the Pillar to the Social Partnership framework:

• Amending the Nama legislation to require Environmental Impact Assessment of the entire proposal;
• Opposing the current Nama legislation overall.

The first proposal is a standard procedure for undertaking virtually any policy directive. In fact, absence of explicit EIA study under the National Development Plan was in the recent past been used to launch an appeal against NDP to the EU Commission. The EU has taken the appeal for a review precisely on the grounds that NDP had no comprehensive EIA. Absence of a similar EIA implies that Nama is open to challenges on the grounds of violating required procedures for policy development.

So nothing radical was being proposed within the Environmental Pillar, especially considering the fact that Nama is likely to have significant environmental impact as it will be the final arbiter in deciding the fate of many unfinished property development projects across the nation.

Eight out of ten leading organizations comprising the Pillar are, allegedly, in favour of this proposal as are a number of smaller bodies.

However, despite this wide-ranging support, one Pillar member - representative of animal rights movement - has, allegedly, vetoed any Pillar proposal on Nama before it was even allowed to proceed to a vote. The organization in question is, allegedly, the Irish Seal Sanctuary.


On a related issue:
Per RTE report (here) "European Commissioner for Economic and Monetary Affairs Joaquin Almunia said he wants to see the Dáil pass the legislation to establish NAMA as soon as possible." I wondered earlier if the phrase is correct. Here is the quote: "My wishes for the next couple of months here is first that NAMA will be adopted by the parliament as soon as possible because it is extraordinary needed [sic] instrument to tackle the problems in the banking sector and to organise an orderly restructuring and consolidation of the banking sector here in Ireland, that is one very important issue, and second, I really wish that in December the Irish government and the Irish parliament will discuss and adopt the budget that is needed". Italics are mine.

So here is analysis of the quote:

1. Mr Almunia speaks for himself, not the EU Commission, thereby potentially presenting a private view, not that of a Commission. As a private individual Mr Almunia has no specific experience, factual or knowledge basis to make any statements about expected effectiveness, efficiency or fairness of Nama legislation;
2. Mr Almunia clearly states that in his view, Nama will pursue the objective of 'restructuring and consolidation' of Irish banking sector. In other words, in his view, Nama is not about the benefits to the wider economy but about benefits to the narrow banking sector. Furthermore, is Mr Almunia calling for 'consolidation' (i.e oligopolization or monopolization) of the Irish banking. This highly irregular for an EU Commissioner and cuts across the entire Government-own argument that Nama is needed to prevent nationalization, for, in the view of the Government nationalization can lead to infringement on competition in the sector. You can't really have a cake and eat it. Either 'consolidation' is desired, in which case nationalization cannot be ruled out on competition grounds. Or Nama cannot proceed to consolidation of the sector;
3. The EU Commissioner 'wants to see' a passage of a specific Bill by a sovereign Parliament of the Member State. It is a strange turn of phrase that might imply that the EU Commissioner is attempting to influence the internal affairs of the Irish state. Is that what we voted for in the Lisbon vote?
4. The Commissioner is clearly aware of the crucial Green Party vote on Nama tomorrow. The timing of his statement, its venue and the nature of its delivery suggest that Mr Almunia is either being used by the Government to influence the Green Party vote or he is attempting to do so himself. Either way, this is utterly unacceptable for the member of EU Commission.