Monthly Archives: November 2011

“Cardboard in his shoes”

Podcast: Impact of a €10 cut to Children’s Benefit

Another single mother doing her best to make ends meet while trying to avoid stigmatising her son as poor. Just like Jacqueline yesterday Aisling O’Connor is another remarkable woman. Please listen and post a comment.

Some very generous people wanted to give Jacqueline something to help her out. I passed on the offers to her this morning. Her reply – “Thank them for me but no thanks. Everybody in the country has to make cuts in their lives. I just have to make mine too.”

Then there’s the other variety of observation on Jacqueline’s circumstances. I’ve pasted some of the comments I received yesterday in response to Jacqueline’s story below.

Single mothers really are in need of better public relations. Even when they are manifestly struggling to make ends meet, even when they are very clearly doing everything they can to raise their own and their child’s horizons it seems we find it easier to lump them into a catch-all basket of unmotivated, whingeing scroungers. Now, why would we do that?


“so a reduction of 33cent per day would lead to kids not getting milk or not having nappies ??!!!   time to drop the hyperbole and get real    this kind of crap may be populist but masks reality and stops real debate”

“These fuckin whining witches really piss me off. Give it a rest for fuck sake”

“Working class women are choosing to get pregnant impoverish themselves – what do  the feminists do? Nothing – theyre middle class doin fine (unless the cleaner gets pregnant)”

“My husband is self employed – he earns 400 per week. We have 3 kids and a mortgage. The girl next door has 1 child and 280 week on dole with rent allowance. Who is better off?”

“Mother of God! RTÉ playing the bleeding heart for a proposed cut in Children’s Allowance…and expecting the Irish people to swallow it whole. Ye’re a PC organisation all right…”

“Well done rte, once again u have a sterling job of depressing an already downbeat nation. Wish u would make more effort to b positive and show leadership and help the national phsyce.”

“ I am so fed up with news reports about cuts in social welfare. It angers me so much that the state doles out so much in social welfare every year and yet we only hear news reports about people whining about social welfare cuts. Does anyone want to represent my voice?? Does Phillip want to accompanyme on my daily costs? I am self employed, never been on social welfare, yet every day we are crippled with VAT increases, rates, employers PRSI, rent and mortgages. Yet we are entitled to nothing from the state. I am delighted there will be a charge for medical card holders because as far as I can see, they are the reason doctors are so busy. The rest of us can’t afford the doctor. Please change the record and look at the self employed people propping upthe social welfare system.”


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Promises Promises


The powers that be on Drivetime don’t like to make things easy for me. I dragged myself into work on Wednesday morning after a very late finsih on Crimecall the night before.

“Cut me an archive package on the election promises the government has broken since February …. and keep it under six minutes”, said the boss man. A little smile danced across his face as he knew the time constraint would prove to be the real challenge.

So what follows is far from complete and is probably best to think of as a work in progress. Please add comments below on what else you think  should be added when we next return to this excercise.


Filed under Drivetime, Politics

“Weetabix is a treat”

Podcast: The impact of cutting Children’s Benefit

I’m blogging this from my phone so excuse me for being brief but my fingers are just too big to be typing at any great length.

I met three unremarkable yet absolutely remarkable people today. Unremarkable because they are like many of the 92,000 people receiving the One Parent Family payment or living very similar lives to some of the other 470,000 on the live register.

Remarkable because they  . . . well just listen to Jacqueline Kelleher in the Drivetime podcast. She spends her son James’s entire Children’s Benefit on childcare so she can work part time. A €10 cut in that Benefit means it is no longer worth her while financially to work. But she will continue to work and will cut back the food budget.

We walked around the supermarket figuring out what she was going to cut back on from now on. “Milk” was the depressing answer. How do you tell your four year old son he can’t have a glass of milk? “He’s a smart boy, he understands things are hard”. He also understands that Weetabix is a treat that he only gets on months when there’s a little bit more wriggle room in the household budget.

The text and twitter response to this report was noteworthy. “Irritating” to listen to dole scroungers “whining”, said one. Giving these people Child Benefit was like “rubbing lard onto a fat pigs backside”. I said noteworthy, but not worthy of further comment. Jacqueline told me if you got pregnant to claim benefits it wouldn’t be more than a few months before you realised that you had made the “worst decision of your life”.

James would love a Batman Castle for Christmas. His remarkable mum is going to make him one instead.

Please listen to the podcast and tune in tomorrow to hear Aisling.


Filed under Drivetime, Economics, Politics, Society, Unemployment, Welfare

1 in every 7 mortgages distressed

 The Central Bank just released a bunch of mortgage arrears figures this morning.  You can look at some of the raw numbers here Central Bank Mortgage arrears figures but I’ve been working on putting them in context for Drivetime this evening.

8.1% of mortgages are in arrears of more than 90 days. Let me put it another way the arrears problem is one and a half times bigger than it was a year ago. But this does not really represent how many people are in difficulty. If you include all the people who have restructured their mortgage payments by going interest only or agreeing entirely reduced payment schedules the figure stands at just under 13%.

Percentages are a bit abstract though when you consider that what that means is 99,346 households can’t pay for the roof over their heads. One in every seven mortgage holders has either fallen into arrears or has had to restructure their repayments. Fianna Fail made it all sound even worse this afternoon when they lumped in the figures for those experiencing some level of difficulty. There are 46,000 households that might have missed a payment or two. Their conclusion from that Is that the number of mortgages in some level of difficulty is approaching 150,000. That would represent close to 1 in every 5 of all residential mortgages.

The accelerating rate of arrears is what is really frightening though. The Central Bank started collecting this kind of data in the last quarter of 2010. At that time 5.7% of mortgages were in arrears of 90 days or more. It jumped to 6.3% by the end of the next quarter. By June of this year it was 7.2% and now 8.1% in these latest figures. In the space of a year the number of people in default has jumped by over a quarter.

Really worrying is the increase of the number of households for which there would appear to be little or no hope of crawling out from under their debts. There are 15,000 more households that are in arrears of 180 days or more than there was this time last year. You would have to doubt that they are in a position to ultimately avoid default. Over half of the mortgages that have been restructured are paying interest only, or less than the interest, or are paying nothing at all.

The financial distress being experienced is no doubt in the vast majority of cases genuine. It’s worth noting though that one bank recently said that it believed some weren’t keeping up mortgage payments in the belief that the government would end up introducing debt forgiveness of some kind.

My very crude extrapolation of where we will be next year based on where we were last year would suggest that the 90 days or more figure might jump from 8.1% up to 11.7%. Add in those that would have lengthened the term of their mortgage or gone interest only and you are approaching something like 1 in every 5 households.

If you can extract one positive it might be that with default being that commonplace there’ll be no stigma associated with it.

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Friends in high places?

Rolling out the red carpet for Enda Kenny

So when did the economic power house of Europe become so interested in this tiny little windswept island? Why did Angela Merkel extend the Taoiseach the honour of all the protocols … red carpet, honour guard, brass band etc?

Particularly as back in March the Chancellor barely gave the Taoiseach the time of day at a European People’s Party get together in Helsinki. Those meetings are designed specifically to strengthen the personal relationships between all the leaders of parties in the centre-right grouping in the European Parliament. But all that Merkel would afford Kenny back then was 10 minutes of face time.

So what’s changed that makes Ireland worthy of a full two hours? I consulted Political Correspondent colleagues in Der Spiegel (the presitigious current affairs weekly magazine), Franfurter Allgemeine Zeitung (Germany’s daily paper of record) and ARD (public broadcaster). We are it would seem still a useful salutary tale. All were agreed that Frau Merkel would be keen to present Ireland as an example of how the existing bailout mechanisms being sufficient to the job. And if that were the case then Germany wouldn’t have to get out the chequebook.

Which is more or less precisely the opposite of what Enda Kenny went there to argue, but that doesn’t seem to have been picked up on by German media. Listen to the podcast here


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Have we sown the seeds for the rise of the far right?

I don’t think there is anything to add to the sum of human knowledge by me slagging off Greece and the Greeks for their financial delinquency. Enough people have done that more than comprehensively. Suffices to say that there were an awful lot of people sitting around drinking €4 cups of coffee moaning about their reduced circumstances.

But on the other hand there are huge numbers who have been submitted to the financial equivalent of a waterboarding. Between pay cuts and tax hikes they have seen over 50% of their income disappear in under 12 months. They have not seen corresponding cost of living reductions that have made this in any way more affordable. They are drowning in debt and their society is disintegrating.

I set myself the challenge while walking around certain neighbourhoods of Athens to see how many city blocks I would walk before I found a shop that was open for business. There are “For Sale” signs literally everywhere.

My first morning there I assumed that the binmen must be on strike again because of the number of cardboard boxes lining the streets. They are in fact what my translator called “cardboard condos”. Three people were living in this one.

Not only were there junkies everywhere but they were using openly, apparently untroubled by me witnessing their addiction. Street prostitution is rampant on major city squares 24 hours a day. And as you will hear in one of my reports for Drivetime well dressed people are to be found begging on just about every street.

Reported crime figures are not too far ahead of other European capitals cities but there have been very significant spikes in aggravated burglaries, armed robberies, tiger kidnappings, muggings and theft.

Austerity, it has been argued, is too much for Greek the economy to bear. It is certainly too much for the vulnerable and the marginalised to bear, but it would do the Greek economy no harm if austerity measures ensured  that a few more people paid some tax. “Tax is what we pay for a civilised society” was Oliver Wendell Holmes’s neat little aphorism. In Greece it will be the price of avoiding complete social disintegration.

As things stand Greece will be in this process until 2027. Polls show that the electorate is deserting the two largest parties and moving to the further ends of the political spectrum. Who knows how popular fringe groups like this one will be that stage. The caption below the Party name, Golden Dawn, reads “Greece for Greeks”. An appealingly simplistic message in a country with such a high immigrant population. The  swastika like symbol on either side is a motif from ancient Greece. It is called the “meander”. Greece’s mainstream political parties would be foolish think of that as the far right’s strategy though.

Greece for the Greeks

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Arriverderci Silvio, Ciao Dr Doom

One hour before I head to the airport …..  yet again. I feel that I have single handedly kept Michael O’Leary in check shirts this week. But as I leave, sitting here on the side of the Via Nazionale, there’s a bit more urgency to Rome than when I arrived two days ago.

Carabinieri buzz about in their squad cars, a police helicopter circles the city centre. Riot police are hidden around the side of many government buildings. The political pace has picked up. I just spotted three bus loads of a military brass band being given an escort through town. Whether they are rehearsing a final hurrah for Silvio or preparing to herald the arrival of Mario is not clear.

You’d have to imagine it’s something Silvio has arranged for himself because no unelected government coming to power with the single unfortunate mandate of inflicting pain on its people would afford itself that level of pomp and circumstance. But then again … this is Italy.

The pace of things is definitely picking up here. The Senate has just voted in favour of an austerity package. When it’s passed in the chamber tomorrow (which seems to be a given) Berlusconi will resign. President Napolitano could then go through the pretence of calling all the party leaders and asking them if they thought they could form a government but in reality the call has already been made and Mario Monti has already begun putting a programme together. He’ll have is feet under the desk in Berlusconi’s office by Wednesday morning at the latest.

So  it’s all go … but only on the political front. The cancer in the economy is metastasising. Put simply increasingly nobody wants to lend to Italy at competitive rates because they don’t believe it can service its debt any long, and if nobody will lend to it at a price it can afford Italy won’t be able to service its debt any longer. Somewhere Joseph Heller chuckles.

Up until today I had only heard people talking about Italy having a liquidity problem. Short term cash flow issues, if you will, that would be solved by an orderly departure of Silvio Berlusconi from the stage. But now some are muttering about possible solvency issues. It’s not clear to me if they mean now or in the future if cash flow isn’t sorted out.

Can that really matter? Private lenders won’t give it money at a rate it can afford long term. Lenders of last resort don’t have access to the kind of cash it would take to plug the gap. And the government would have to generate a 5% surplus just to meet the interest bill on the €1.9trillion debt. That’s being stuck between a rock and a hard place with the added dilemma of the waters rising around you.

Dr Doom, Nouriel Roubini, who is to the global economy what Morgan Kelly has been to the Irish one had a scary op ed piece in the Financial Times this morning. He didn’t see a way out for Italy short of the  ECB becoming an “unlimited lender of last resort”. And who would do that if there is even a sniff of insolvency in the air.

His argument was a lot more nuanced than my summary but essentially if the third biggest economy in the Eurozone goes south so too does the eurozone. Reaction in Italy is interesting. I gave his piece to a Journalist, an Economist and a Politician today. The first two said he was spot on. The politician completely disagreed using the well worn “fundamentals are sound” argument. But then he’d have to say that as he’s probably going to be a minister in the new government.

His name is Enrico Letta and I’ll post a link to my Drivetime interview with him when it’s been podcast by my colleagues back at base.


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