John McGuinness: The banking system is rotten and can only get worse — we need change

We have a great country full of hard-working people that needs fixing. Doing that will not be easy, but letting it continue along the path it is now on will bankrupt us, writes John McGuinness on the 10th anniversary of the banking bailout.

It cannot be said often enough: The first obligation of any government is to keep its people safe.

Before and since the financial crash, the Government and the EU have ignored this central principle. As a result, people have lost faith in politics, bureaucracy, and government.

This is extremely dangerous and threatens the wellbeing of our people and an orderly society.

The fallout of the economic crash continues to have a devastating effect on people and families.

Children have had to watch their parents scramble furiously to adjust to the reality of not having the quality of life they once enjoyed as well as, in some cases, losing their jobs and homes.

No doubt that generation will be marked, if not damaged, by the experience. Those who have suffered from our State throwing individuals and families on the human scrap heap to save the banks will never forget.

The stain that began when the State let its people down, aided by politicians without the backbone to call halt, will be a blemish on the fabric of our society for generations.

Small businesses, built up through generations of hard work and that once employed 900,000 people, have had to downsize overnight or close completely resulting in job losses.

Communities have been left weakened because of this but nonetheless their resilience has helped shape a slow rebuilding of confidence and economic and social activity.

Irish people have an inner strength and pride that keeps them going for their families, community, and country.

You have to stand back in awe of their achievements to date, using the power of a backbone that is sadly absent in the Dáil.

But what of our systems of governance and the political and public-service classes? Are they accountable? Have systems improved or been reformed?

Has the Government, the Oireachtas, and all those that are elected or have chosen to work for the State on the promises that they will keep our people safe learned from past mistakes?

Have they changed in any way? They have not.

They have abdicated their responsibility behind a veil made of words, false promises, and inaction.

They are bringing Ireland to the cliff edge because the country can’t afford the management incompetence for which it is paying.

The banks are experiencing a return to healthy profits — profit on the backs of people being broken by debt, having their homes repossessed after years of being dragged through the courts as lay litigants against the might of the banks, their professional teams, and a legal system that is not fit for purpose. No civilised society should tolerate this behaviour.

The vulture funds are being allowed to do immense damage to the very fabric of Irish society. The Government and the EU will not regulate the funds because they see them as necessary for untrammelled capitalism.

So throwing people out of their homes, their businesses, is OK?

Standing by as the vulture funds drag individuals and families through the courts for years, with all of the emotional stress and anxiety that this process visits on a family, is OK?

The system is rotten, it can only get worse. We need a radical national plan and politicians and public service with the vision, energy, and courage to drive it. There is no other way.

Brian Lenihan wanted to burn the bondholders, which would have saved us at least €64bn.

The bondholders had been paid to take a risk, but they now didn’t want to take the pain of a bet gone wrong.

He rang me from Dublin Airport, isolated and angry because his colleagues and the bureaucrats wouldn’t support him, so €64bn of bondholders money was returned to, largely, German and French banks that had lent badly.

The country has that burden on its shoulders still. That’s where lack of State and political backbone gets you.

Sitting on the finance committee watching tracker mortgages and vulture funds do their worse, I thought I had seen everything until the powerful voice of Vicky Phelan was raised to reveal the cervical smears scandal and the efforts made by the State to cover it up.

She refused to let the State cover up her case and revealed a system that is rotten to the core.

A system that believes it can pay off those whose lives have been destroyed and then hide behind a confidentiality clause.

How many people like Vicky Phelan and whistleblowers Sgt Maurice McCabe and Jonathan Sugarman and others do we have to hear above the din created to silence them before we decide enough is enough and demand that our politicians, local and national, represent us to the best of their ability as they promised?

Vicky Phelan

Politicians must confront the system that is clogging the arteries of our country with rules, regulations, and red tape.

Interacting with the State is now a nightmare for most of us, including politicians, because they have allowed themselves to be reduced to the status of supplicants, neutered by extraordinary curtailments of their powers — that they foolishly voted for.

The Central Bank has failed to control banking excess.

It had to be forced to acknowledge the tracker-mortgage scandal and it has impeded the credit union movement’s ability to play a constructive role in the provision of social and affordable housing.

Determined to save banks no matter what the cost, it resists all attempts to regulate vulture funds and ignores the fact that agents of these funds do not respect existing regulations.

Our politicians follow its instructions like sheep, while huge numbers of families bend and break under the lash, ignoring the wellbeing of a society that has paid enough for political and State failures, cover-ups, and lack of care.

Political parties, in doing their business, need to be more open and constructive. The tribal nature of some does not serve politics or the country well.

It is clear from opinion polls that old loyalties to the type of tribal politics practised by Fianna Fáil and Fine Gael is rapidly on the wane. Thank God for that.

It was that mentality and groupthink that led us to make bad decisions when the country needed more honesty, not nodding obedience.

I met the troika in the early days of their work in Ireland.

I was impressed by their desire to push through an agenda of reform that, if implemented, would greatly improve the lot of people in their lives.

I was less impressed with the brutal way they set out, in a short timeframe, to correct the country’s finances.

The government had no hesitation in implementing measures of austerity that are still being felt to this day.

The story was so very different when it came to the reform agenda. Most reforms were given a nod and a wink, just enough to make the IMF believe that we were on our road to Damascus.

For proof of this, just watch the public accounts or finance committees each week. Millions of euro of public money is being wasted by a system that is unwilling to be fully accountable or transparent.

A HR system that sees no one fired or sanctioned for wrongdoing unless, of course, he or she is on the lowest rung of the ladder.

The threat of another crash is now being predicted by many international commentators and bankers who saw the last one. Ireland pays close to €6bn to service its debt which is in excess of €200bn.

As a country, the political elite has provided poor leadership and slipped back into political game-playing and paying lip service to the many reforms needed to keep our people safe.

The Government will not be able to pass on austerity measures again, if needed, because people have not recovered from the last onslaught.

The only route now is reform, competence, truth, and a new dynamic political push that puts people and their wellbeing front and centre.

And it’s about time all that happened, because our people are not being kept safe, the Dáil has become a talking shop, and many of our State services are not fit for purpose.

We have a great country full of hard-working people that needs fixing. Doing that will not be easy, but letting it continue along the path it is now on will bankrupt us.

What needs to be done will take leadership and courage from politicians, trade unions, the professions, and senior civil servants?

It will require the forbearance of our people because there will be pain, but it can be done.

And it must be done because it is the duty of all of us to hand a better country to our children.

We are remembering the great wars of the past and the heroes of 1916. Is this the type of country they died for? I doubt it.

John McGuinness is chair of the Oireachtas finance committee and a Fianna Fáil TD for Carlow Kilkenny.


  1. John McGuiness doesn’t care about anybody but himself. He coldly dismissed concerns last week after the mosque was passed with the Hilary “What difference will it make?” That was probably the most honest he’s been since he’s been in office. It reeked of the arrogance and disdain of a Man who knows he and his family will never face the consequences of their ruinous decisions.

    Liked by 1 person

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