OPINION : By 2015, Iceland will almost certainly be a lot better off than Ireland because it dealt decisively with its banks...


WHILE THINGS are hard to predict, the future, especially the situation of the Irish economy, is so stark that even an economist can make some predictions that stand a chance of being right.

Two ghosts of Christmas will haunt Ireland in 2015: jobs and debt.

For 20 years, the Irish economy experienced extraordinary growth. Unfortunately, this growth came from two separate booms that merged imperceptibly into each other. First we had real growth in the 1990s, driven by rising competitiveness and exports. However, after 2000 competitiveness collapsed, and growth came to be driven by a lending bubble without equal in the euro zone.

As Michael Hennigan of Finfacts (www.finfacts.ie) has pointed out, of the half million jobs created in the last decade, only 4,000 were in exporting firms; and fewer people now work in IDA-supported companies than in 2000. The Irish economy has been faking it for a decade.

Now that the property bubble has burst, people hope that exports will once again become the engine of our salvation. The problem is that, back when we were becoming rich by selling houses to each other, we priced ourselves out of world markets. Wages have risen by one-third here compared with Germany since 2000. Restoring competitiveness will be an arduous task where nobody, outside the banks and ESB, will see a pay rise for a decade, and many will take pay cuts.

Whether desirable or otherwise, leaving the euro is not possible for a mundane reason. Changing currencies takes a lot of organisation, as we saw when the euro was introduced. If the Government announced that a New Irish Pound will be introduced in 12 months, everyone would rush out to withdraw their savings in euro and wipe out the banks.

Prolonged mass unemployment is a disaster not only for its victims, but for all society. The great Harvard sociologist William Julius Wilson showed how the disappearance of low-skilled jobs in the US during the 1970s led to the social collapse of black ghettos.

In Ireland for the last 20 years we saw this process working in reverse, as rising employment turned what had been sink estates into decent, if not wonderful, places to live. Finding a job does more for the disadvantaged than a legion of social workers: people’s sense of self-worth is transformed by being able to earn the money to do ordinary things like own a car, buy toys for their kids at Christmas, and take their family on holiday.

While many commentators argue that the benefits of the Celtic Tiger flowed exclusively to the wealthy and connected, this is nonsense. The benefits went overwhelmingly to ordinary people in the form of something that Ireland had never seen before: abundant jobs. By 2015 we will have seen what happens when jobs disappear forever, particularly from less educated men who were able to earn a good living in construction. In effect, Ireland is at the start of an enormous, unplanned social experiment on how rising unemployment affects crime, domestic violence, drug abuse, suicide and a litany of other social pathologies.

We will be forced to discover the consequences when people, who had worked hard to make decent lives for themselves and their children, find themselves reduced to nothing. Less than nothing in fact because, unlike the unemployed in the past, people now losing jobs are weighed down with debt and facing the terrifying prospect of losing their homes.

Debt will be the second ghost of Christmas 2015. Back in 1997, when exports drove real growth, Irish banks lent little by international standards. By 2008, Ireland had twice as much debt for its size as the average industrial economy: banks were lending a third more to property developers alone than they had been lending to everyone in Ireland in 2000.

It was this tidal wave of credit that inflated house prices and launched the construction boom that drove wages and government spending to unsustainable levels.

To fund this suicidal lending, Irish banks borrowed heavily internationally, and now must pay it back fast as the world realises that our recent economic miracle was less in the spirit of Adam Smith than of Bernard Madoff. As Irish bank lending returns to ordinary international levels, property prices will fall by at least two-thirds from their peaks.

However, five years from now, property prices could have been driven far lower than that by a deluge of sales of unsold, foreclosed and abandoned homes.

Mass mortgage defaults caused by unemployment and falling house prices are the next act of the Irish economic tragedy. As well as bankrupting our worthless banks all over again, the human cost of tens of thousands of families losing their homes will be enormous but, because the Government has already exhausted the State’s resources taking care of developers with Nama (National Asset Management Agency), there is very little that can be done to help these people.

Most people, of course, will not lose their jobs and homes. However, even they will be forced painfully to relearn something our parents already knew: beyond a small mortgage, debt swiftly turns into pure poison that will eat away your prosperity and happiness.

One response to large-scale home repossessions that will be attempted is to buy ghost estates for public housing to accommodate evicted home owners, providing ample opportunities for good old fashioned petty corruption.

For grand corruption, though, we will have to look to Nama. By allowing the banks to dictate the terms of their bailout, the bank rescue was turned into the most lucrative and audacious Tiger Kidnapping in the history of the State, with the difference that, like the sheriff in Blazing Saddles , the bankers held themselves hostage.

Bad banks like Nama were tried on a large scale in the early 1930s in the US, Austria and Germany; and proved to be profoundly corrupt and corrupting institutions, whose primary purpose was to funnel money to politically connected businesses. The German bank is best remembered for setting up what we would now call a special purpose vehicle to fund the presidential election campaign of the odious Paul Hindenberg.

Bad banks do not just happen to be corrupt and anti-democratic institutions, it is what they are designed to be. Effectively, bad banks give governments the power to choose which of a country’s most powerful oligarchs will be forced into bankruptcy, and which will be resuscitated to emerge even more powerful than before.

Nama will get to pick which of the fattest hogs of Irish development will be sliced up and fed, at taxpayer expense, to better connected hogs (remember that Nama has been allocated at least €6.5 billion, considerably more than the Government saved by draconian budget cuts, to “lend” to favoured clients).

While Nama may have momentous political consequences, it has already failed economically: the Irish banks are still zombies, reliant on transfusions of European Central Bank funding to survive until losses on mortgages and business loans finally wipe them out. In the next few months we will discover if the State bankrupts itself by nationalising the banks; or if it has the intelligence to free itself from bank losses by turning the foreign creditors of banks into their owners, as Iceland has just done with Kaupthing bank.

It is ironic that by 2015, having devalued its currency and dealt decisively with its banks, Iceland will almost certainly be a lot better off than Ireland.

Article by Morgan Kelly - Irish Times.

Just eight houses sold under the hammer in Dublin this year, as the number of houses offered at auction collapsed by 80 per cent. In total,19 properties were offered for sale in the capital’s auction room; in 2006, at the height of the boom, more than 1,000 properties were auctioned in the city.

Estate agents Bennetts held most of this year’s auctions, putting five properties under the hammer. Lisney handled four auctions, as did Sherry FitzGerald, while Colliers Jackson-Stops auctioned three.

Douglas Newman Good, Harper O’Grady and Property Team each held one auction.

Simon Ensor, director of auctions at Sherry FitzGerald, described the number of auctions this year as unprecedented.

‘‘In the past, a quiet year for us would have been one where we [Sherry FitzGerald] held 25 auctions and where overall, there were around 100 across the entire market," he said.

‘‘I’ve been selling houses by auction since the mid-1980s, and I don’t ever remember a year where there were so few sales."

Ensor said he expected few auctions again next year, albeit not as few as this year. ‘‘There could be twice as many auctions in 2010, but even that would still represent a very low number," he said.

Only houses which ‘‘tick all the boxes’’ for buyers, or rundown properties with very competitive asking prices, would be auctioned for the foreseeable future, according to Ensor. ‘‘If a house has everything that a buyer could possibly want - a fantastic location, a beautiful interior, a great garden and off-street parking - then we would still sell it by auction," he said.


Report by Gillian Nelis - Sunday Business Post.

Repossessions occur almost on daily basis, says regulator...

Level of arrears doubles in 15 months



THE homes of 331 people have been repossessed this year -- almost one a day -- and a further 26,271 mortgage holders are three months or longer behind in their mortgage repayments.

This means the percentage of households falling into arrears has more than doubled in the last 15 months, new figures from the Financial Regulator show.

But mortgage experts accused the regulator last night of down-playing the extent of the mortgage crisis.

They said the figures take no account of the thousands of homeowners who have got permission from their lenders for a payment holiday or are now only paying the interest on their mortgage in a bid to lower the repayments.

The figures show that the State's 22 mortgage lenders held a total of 331 repossessed homes by the end of September. In the three months from June to September alone 110 properties were repossessed.

Included in the 331 repossessed properties are 79 that were voluntary surrendered or abandoned.

But the director general of the Free Legal Aid Centre, Noeline Blackwell, warned borrowers that they will still owe money on the house even if they abandon it.

They may also be turned down for social welfare payments and will not get on a local authority housing list because they will be regarded as having intentionally made themselves homeless.

The 26,271 homeowners who are in arrears for three months or more represent 3.3pc of the 791,634 mortgages outstanding. Of these, 17,767, or 2.2pc, were more than six months in arrears.

The figures show that a total of €4.8bn is owed on the 26,271 mortgages that are more than 90 days in arrears, and that €3.2bn is owed in respect of accounts more than six months in arrears.

Ciaran Phelan, of the Irish Brokers Association, said the repossession and arrears figures did not represent the true extent of the mortgage mess.

"This study only looks at those people who are in breach of their loan agreement and doesn't include those mortgage holders who are on repayment moratoriums or have reduced to interest-only repayment with the consent of the lender.

Under-estimate

"Although not technically in arrears, there are probably as many people in these latter groups as in the regulator's survey."

Diarmuid Kelly, of the Professional Insurance Brokers Association, said the new figures were a huge under-estimate of the scale of the mortgage crisis facing homeowners.

The Irish Bankers Federation (IBF) said figures showed that subprime lenders who are not members of the IBF account for just 2pc of mortgages but 42pc of all repossessions.

The head of the IBF, Pat Farrell, said: "We are acutely aware of the pressures facing some homeowners in the current economic environment and remain firmly of the view that early, constructive communication between the borrower and the lender is the best way to deliver mutually-acceptable outcomes."


Report by Charlie Weston Personal Finance Editor - Irish Independent

The times, they are uncertain...

The past year was characterised by harsh economic truths and a grinding dilution of hope, especially for people on the margins of society and those who saw their lifestyles – and livelihoods – dissolve

IT WAS the year of uncertainty. Of waiting, and waiting, and dreading. The dominos of society collapsed one by one – the see-no-evil bishops and priests, the senior gardaí who colluded with them, the invincible developers, swaggering bankers, procrastinating judges, grasping politicians, language itself – and trust fell off a cliff.

More than two out of three people declared they trusted no-one, in a monthly poll on the mood of the nation. Loss of trust was a theme of the year, says Carolyn Odgers of Chemistry Advertising, which commissioned the poll from Amárach Research. It was confirmed by The Irish Times /Behaviour Attitudes social survey last month . Only three in 100 will be bothered to look more closely at Government and in the event of another recession, even fewer at untrustworthy bankers. Overwhelmingly, we are back to self-reliance. Save more, spend less, ignore the wizards behind the curtain. Trust only in yourself.

And so this year, whenever another financial wizard uttered that great Wall Street dogma, “we are where we are”, at least we knew what he meant: he hadn’t a clue where we were. Worse, it probably meant we were being whipped by some faceless hunt master towards somewhere uncharted and probably not good. But one thing we knew for sure: the dogma of “we are where we are”, aka “taking the medicine” (in five budgets, all told, this year), was a synonym for soaking the little guy. What else could it be? Who would you trust to tell you otherwise? “Uncertainty” was the mot du jour in the slow-burning nightmare of the early January headlines. Invariably, it presaged the worst. “Uncertainty” about Anglo Irish Bank meant nationalisation within days. “Uncertainty” about Waterford Wedgwood prefaced the disappearance of an Irish icon. “Uncertainty” about Dell collapsed into the loss of 1,900 jobs and a savaging of 10,000 more.

People cried out for a leader, any kind of leader. Michael O’Leary was starting to look attractive. The January inauguration of Barack Obama was almost cruel in its timing. Here, at the new year’s dawning, was a tough, confident, attractive, intelligent leader offering harsh medicine and hope, placing Americans’ challenge in the context of their forebears’ toil and sacrifice, articulating with curled lip and righteous gaze the people’s disgust at bankers and lobbyists and their cheerleaders.

MEANWHILE, AT HOME , we waited and yearned for that decisiveness, that same independence of mind, someone to brew the bloody medicine and get it over with, but who was equally offering a vision beyond the sour, gauche “it’s brutal and will get twice as brutal for years and years”, someone to articulate the hope of a more noble, more sustainable nation at the other end, whenever that might be.

In its absence, a fairly average speech delivered by Brian Cowen to the Dublin Chamber of Commerce in February was hailed as a piece of oratory not far off Martin Luther King’s “I have a dream . . .”. In the vacuum, instead of hope, courage, unity of purpose, there came the new sectarianism: private against public sector. The intrinsic value of work was also a theme of the year. What price a banker’s bounty against a firefighter’s? A television star versus a nurse? A back-bencher versus a carer? And all the while, the official drip-drip of uncertainty and dread continued: Christmas bonuses gone, childcare supplement dead, job-seekers’ benefit period cut back – all made immeasurably worse by the dour, repetitive promises of worse to come.

A bemused world’s press gathered to watch us scramble over our hubris to placate the previously-despised “faceless technocrats” of Brussels and go bald-headed for Lisbon. Meanwhile, the more intrepid foreign journos took the well-worn path to Limerick and Tallaght. Some even made it to busted housing estates in Longford and Leitrim before, inevitably, trying for an interview with Sean Dunne, whose wife had opened a grocery shop in one of Dunne’s previously-despised hotels.

They asked about Nama. “It is good, it will save you, ja?” We don’t know, mate. No-one does. Is it best represented by Nama, the folk hero who built an ark to save his family from a flood? Or by the crater called Nama, waiting to swallow some unwary soul on one of Jupiter’s many moons? Is it yet another “uncertainty” or a big, fat, calculated “risk”? Behavioural economist Dr Pete Lunn of the ESRI distinguishes between “risk” and “uncertainty”, because experiments show people instinctively react differently to each. Risk is when you know the odds you are up against; uncertainty is when you don’t. A risk is playing roulette; uncertainty is playing roulette without knowing how many red and black numbers are on the wheel.

And all the while, the fall-out from the economic roulette was worming its way inexorably towards the surface in the form of hundreds of thousands of lost livelihoods. Among the hardest hit – though least heralded in the statistics – were the self-employed, the small café operators, the boutique owners, estate agents and architects as well as those about whom some trade unions agitated noisily during the boom: the carpenters, bricklayers and labourers, left with bad backs and no security.

Some had chosen to be self-employed; after all, the roulette game would never end. For others, the “self-employed” label was just a means for employers to evade their responsibilities. Many of the same “self-employed” were among the Breakfast Roll boys, the lads given first dibs on “discounted” apartments and houses-to-let on the bosses’ own developments. Now, in the worst of all worlds, there was no work, plummeting rentals or no rentals at all. Negative equity and disappearing migrants collided to wreck the dreams of more than fat-cat developers.

When RTÉ aired a profoundly sad documentary called The Sheriff and Me , a central character was a Co Offaly builder, fighting depression and unemployment. His was a world away from the champagne-swigging, helicopter-hopping masters of the boom. “We used to go for breakfast in Banagher on a Saturday, then on to the toy store,” said his young wife wistfully. Another exhausted couple struggling to rear six children in a decaying hardware shop in Clondalkin described the paralysing misery of a visibly withering living. The sheriff’s man stood by, eying up their assets.

People who had always regarded themselves as proudly self-sufficient suddenly found themselves in unfamiliar territory. A beautician tells of a woman sitting having her usual rather expensive nail and facial treatments, while musing worriedly that her husband had probably lost his job – there were ominous signs, including an injunction not to ring him at work – but hadn’t yet told her. Worryingly, the Chemistry/Amárach survey suggests 30 per cent of respondents believe their relationships are suffering due to the recession.

Savings gone, some – the ones who were able to think straight – might have found themselves seated before a person such as Teresa McCourt, development manager with the Co Westmeath Citizens’ Information Service. Trying at last to front up to reality, to opening the post, to breaking the agony of uncertainty, they would discover that the lot of the work-less self-employed is a meagre one.

‘THERE IS A huge difference between this year and last year,” she says, noting that it’s not so long since three-quarters of their queries were related to employment law, such as employees’ rights around holidays or pay. This year, the top five queries among the 2.5 million visitors to the citizensinformation.ie website related to social welfare (39 per cent), employment (26 per cent), travel (14 per cent), health (11 per cent) and moving country (8 per cent).

“You would see a lot of sad situations among the self-employed, a lot of men who worked in construction . . . I’ve had men sitting in front of me practically crying. One told me he’d gone for a job with the HSE as a caretaker but was told he didn’t have the qualifications. And they become very angry. I would have experienced that anger. They might just have started out with a normal query, then they get on to something else. They rarely come in angry, not initially.” The staff have had to start “minding themselves”, she says. This year, that anger and sense of despair have surfaced often enough for staff to take courses in suicide intervention. “Now if people say ‘I’m going to end it all’, we’d pursue it. We’d ask them if that’s what they mean and get help for them.”

She reflects for a moment, then returns to that word, “uncertainty”. “A lot of it is about that. That and no hope. That has been the theme of the year.”

It’s not an image outsiders have of the Citizens’ Information Service (CIS). Teresa’s boss, Tony McQuinn, CEO of the Citizens’ Information Board, which oversees the CIS and the Money Advice and Budgeting Service (Mabs), tries to see the glass half full. On the one hand, online help and services didn’t exist during the 1980s recession. Nor did Mabs; now there are 50 Mabs centres in the country. People are also better educated now, have more experience of employment and of the possibilities on offer and so are starting from a different base.

On the other hand, he says, back in the 1980s, people weren’t used to wealth or choices. Their expectations were lower. But now, for the young unemployed with no experience of hard times and burdened with debt, he says, there is no clear picture of where hope is to come from. Who would have thought, a couple of years ago, that his agency would be running websites called losingyourjob.ie or keepingyourhome.ie? And yet . . .

Many would argue that the media has been remiss, even obstructive, in ignoring the positives. Carolyn Odgers of Chemistry suggests that there is a general obsession with the recession here that is not observable in other hard-hit countries such as Spain or Britain. Is it because Irish under-35s – unlike their British peers – have never known recession in their working lives and are in greater shock? Or is it because this is also a middle-class recession of severely shocked 30- and 40-something architects, solicitors, engineers and marketers, who may well be more vocal and articulate? Has talk of pay cuts in the private sector been exaggerated because the media industry was among the first to suffer?

THE GOOD NEWS is that half of the population has no borrowings. A torrent of money is flowing into savings accounts – driven by uncertainty, to be sure, but also by hard lessons well learnt. Some 88 per cent of the working population are still in jobs.

Brian Lenihan sees light somewhere down the economic road (although it’s fair to note that many others don’t). The recent poll by The Irish Times /Behaviour Attitudes also showed that people had moved beyond anger and the blame game, probably ahead of the media. The Chemistry/Amárach polls also reflected everyday positives such as relief that the pressure to keep up with the Joneses was off; it’s okay to wear the same outfit twice. They talk about reassessing their lifestyle, switching loyalties and brands (a huge trend in June), about retraining in safe, solid jobs such as computers, nursing, teaching, medicine, engineering, hairdressing, going back to what matters, to volunteering (though there is anecdotal evidence that overwhelmed charities are now looking for money rather than volunteers), frugality and simple lives. More than a third are cutting their spending by “a lot” for Christmas. Then again, is it not the media’s duty to reflect the facts as they are, rather than how people wish them to be?

Last week, for example, a report from the British think-tank, the New Economics Foundation (NEF), challenged the notion that high pay doesn’t matter as long as poverty is eradicated. It argues that high pay is often generated by big businesses that destroy other parts of the economy or fail to pay the full costs of their activities. The NEF concluded that, all things considered, financial workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste recycling industry gave much more to the country than they took out. So it calculated that, for example, tax accountants were the most destructive, burning £47 of value for every £1 they created. The biggest bankers destroyed £7 of value for every £1 (on the basis that jobs and tax contributions are offset by the cost of the current crisis and the negative impact on public finances), and advertising executives £11 for every £1 (they promote over-consumption). On the other hand waste-recycling workers generated £12 for every £1 spent on wages, childcare workers up to £9.50 for every £1 and hospital cleaners £10 for every £1.

Roy Foster, professor of Irish history at Oxford University, writing about Ireland's rise and fall in the Guardian, ended on a positive note. “But what remains of the years that the locust has eaten? Ireland, if poor again, is still younger, sharper, less deferential (particularly to the Catholic Church) and more entrepreneurial . . . The government may have to rediscover Swift’s dictum that the wealth of a country is its people. How far the ‘people’ forgive the government for the way it has treated them remains to be seen.”



Report by KATHY SHERIDAN - Irish Times

Architects offer ideas for country's 'ghost estates'...


IT IS a future where empty housing estates are used as crematoriums and there is a scrappage scheme for ugly one-off country homes.

As the National Asset Management Agency (NAMA) prepares to begin operations in the new year, a group of architects have put forward suggestions for what can be done with the unfinished constructions and 'ghost estates', legacies of the economic downturn.

From an unfinished hotel which has been handed over to the community, to a 'two-for-one' scheme for unsold houses, the 'Shadowland' exhibition which opened in Dublin yesterday floats some realistic and some more improbable ideas.

Among the suggestions are a 'City of Dead', where abandoned or unsold houses are used as crematoriums and chapels.

FKL architects, which organised the exhibitions, have also suggested a scrappage scheme for houses. One-off homes would be knocked down and the residents rehoused in towns, while trees are planted on the old site.

The same company has suggested using empty estates as schools, and a scheme where buyers can get two homes for the price of one, using the extra space for family space.

"The leftovers of the boom-time take the form of half-finished projects, 'ghost' housing estates and land zoned for development in inappropriate locations nationwide," said organiser Michelle Fagan of FKL.

"Under NAMA, the same people who created the issues in the property sector will be charged with resolving them.

"Decisions must be made regarding the future of these sites and this process must involve taking into account the impact on communities, as well as financial and economic outcomes."

Visitors to the exhibition have been asked to contribute their ideas via post-it notes on the exhibits.

A full report will be completed at the end of the exhibition, held at Dublin City Council civic offices.



Report by Shane Hickey - Irish Independent

Budget 2010: Brian's bitter pill...



FINANCE Minister Brian Lenihan yesterday chose to avoid new income taxes by instead slashing social welfare payments and public sector pay.

But he insisted "the worst is over" after delivering his third Budget in 14 months.

However, there is plenty more pain to come as Mr Lenihan last night revealed plans to achieve €2bn more in cutbacks in 2011 through water charges, a property tax and public sector reforms.

The Government is also planning a radical overhaul of the PRSI, income and health levy system, which will also widen the tax base.

Mr Lenihan cut €4bn from spending in Budget 2010 and introduced carbon taxes and stealth charges in the health sector.

But his Budget was branded as lacking fairness as it hit those on low incomes in the public sector and those dependent on social welfare.

The salaries of Taoiseach Brian Cowen and his ministers were reduced by 20pc and 15pc respectively -- but this included the previous 10pc voluntary cut a year ago.

As a result, the opposition parties claimed the ministerial pay cuts were "a sham", with ministers taking the same 5pc cut as the "cleaner in their offices".

The pay cuts in the public sector will be tiered upwards, with a reduction of 7.5pc on the next €40,000 of salary and a cut of 10pc on the next €55,000. Higher-paid public servants will be hit with salary cuts of up to 15pc.

The decision not to exempt any lower-paid public sector workers from the cuts was seen as particularly harsh, as a pay cut of 5pc will apply to the first €30,000 of salary.

Mr Lenihan said the country could not tax its way out of a recession.

"The worst is over. The international economy has exited recession. Recent indicators suggest that economic activity in this country is turning the corner, and my department is now expecting a return to positive growth within the next six to nine months," he said.

The main points of the Budget were:

* Child benefit cut by €16 a month, with a compensation top-up for welfare-dependent families.
* Social welfare payments reduced by 4pc, except for the old age pension which wasn't touched.
* The job-seekers' allowance was reduced for under-25s.
* Tax exiles will have to pay €200,000 a year, if their assets in this country are above a certain level.
* A carbon tax seeing petrol rise by 4c a litre and diesel by 5c a litre last night.

But the minister added in some sweeteners:

* VAT reduced to 21pc.
* Excise duty on alcohol was reduced by 12c on the pint, 14c on a spirit shot and 60c on a bottle of wine.
* A car scrappage scheme with €1,500 tax relief on new fuel-efficient cars in return for trade-ins of bangers at least 10 years old.
* Measures to encourage first-time home buyers to enter the market, by setting a deadline for claiming mortgage interest relief.

Taoiseach Brian Cowen said he was "confident enough" the Government could get through the Budget vote. And last night, it appeared he was well able to count on a majority.

Before TDs go home to their constituencies for the weekend, crucial votes will be called today and tomorrow on the more controversial measures, such as the child benefit cuts and the slashing of public servants' wages.

Environment Minister John Gormley said the introduction of the carbon tax was a "proud day" for his party as he defended the Budget.

"Given the difficult choices we had to make, I believe this Budget was by and large fair. It also creates 14,000 jobs in water service and house insulation projects," he said.

Jobless

Fine Gael accused the Government of presenting a "jobless and joyless" Budget, which would prolong the recession.

The party's finance spokesman Richard Bruton said the draconian plan forced those who had no hand in creating the current crisis to bear the brunt of the pain.

Rebellious TDs who put a price on their support last night rowed in with the Government. The Coalition easily won the first in a series of Budget votes by a comfortable margin of 88 votes to the opposition's 75.

The sizeable majority was owed to the support of independent TDs Michael Lowry and Jackie Healy-Rae, independent Fianna Fail TDs Eamon Scanlon, Jimmy Devins and Jim McDaid, and former Progressive Democrats TD Noel Grealish.



Report by Fionnan Sheahan - Irish Independent.