What Has Happened to Ireland’s Sovereignty?
By Mairéid Sullivan
2012

This report was published in the July-September 2012 edition of Progress Magazine.
Shorter version published in June 2012 edition of Tintean, the quarterly journal of the Australian Irish Heritage Network.

The campaign to redirect the M3 tolled motorway away from the Hill of Tara, in Ireland, marked the beginning of my understanding of land banking and the speculative developers' 'boom-bust' business model.

"Tara is, because of its associations, probably the most consecrated spot in Ireland, and its destruction will leave many bitter memories behind it."
W. B. Yeats, et al., in a letter of protest to The Times, 27th June 1902,
when Tara was last threatened.

From the beginning of the Celtic Tiger era, the Irish Diaspora has witnessed
speculation-driven economic corruption and political self-aggrandizement on levels beyond imagining.

Community concerns have been vindicated by the Mahon Tribunal Report.
After 15 years of hearings (1997 to 2012), The Tribunal of Inquiry Into Certain Planning Matters & Payments has uncovered corruption affecting 'every level of Irish political life'.
The Tribunal brings to prominence the litany of corrupt practices and crooked dealings that characterised the relationship between ‘certain developers and numerous prominent public representatives’.
(Details published on Wikipedia)

Why would Ireland give away its natural resources?
Perhaps the good people of Norway have something helpful to say... 

On the domestic front:
Scandals surrounding land rezoning in the greater Dublin area have resulted in shocking planning decisions. Joe Higgins TD for Dublin West explains:

‘For some of us, who were Councillors at the time, it brings back memories of the exhausting and fractious meetings of Dublin County Council in the early 1990’s when we tried to stand against the tide of corrupt rezoning.
It was difficult and frustrating. At the Council HQ in O’Connell Street we spent interminable hours in a sparsely populated chamber arguing against motions to destroy green lungs and sensitive landscapes for the benefit of developers, only to be outvoted by a surge of the rest of the 72 Councillors piling in from nearby Conway’s pub intoxicated with the drink, which landowners, developers and their bagmen had plied them with.’

The Hill of Tara:
The Hill of Tara was an ancient archaeological complex long before it became
the seat of the High Kings of Ireland during a concerted effort to stop the incursions of the Vikings in the 9th century. Since 2006, those in the government who were entrusted with protecting Irish cultural heritage enacted new legislation to allow developers to destroy several interconnected sites surrounding Tara
to make way for the M3 Tolled freeway through the Tara / Skryne valley.
>>> more

Corrib-Shell to Sea:
The Corrib gas project is preparing to exploit a natural gas deposit, which was discovered over the past 15 years off the northwest coast of Ireland.
Royal Dutch Shell (Dutch/British oil company) owns 45%, Statoil (Norwegian state owned oil company) owns 36.5%, and Vermillion (Canadian oil company) owns 18.5%. The Shell to Sea campaign believes it is unsafe to develop the Corrib field as
a sub-sea production facility with onshore processing.

Safety isn’t the only concern.
A member of the infamously corrupt Haughey government, Minister Ray Burke (later jailed for corruption), introduced changes to Irish resource laws in 1987, reducing the State’s share in offshore oil and gas from 50% to zero and abolishing royalties.
In 1992, Minister Bertie Ahern, who later resigned amid corruption and perjury charges, reduced the tax rate for the profits made from the sale of these resources from 50% to 25%.

Irish government figures conservatively estimate the value of these reserves at €600 billion, and the Irish people must buy it back at market rates.
In addition, all exploration and development costs can be written off against tax. 

On the European Union front:
According to the Tribunal’s report, corruption and dishonesty is the root of the current fate of the Irish economy, resulting in capitulation to the demands of the European Union’s financial establishment that the speculators’ losses be placed on the shoulders of the Irish people.

Major players in property development held inordinate influence on politicians,
to the extent where the construction industry accounted for an unprecedented fifth of the economy during the Celtic Tiger years. We now know that the projects that resulted were financed by massive loans from assorted speculators, bondholders and major European financial institutions.

The Irish state has taken on huge debts by taking over the liabilities of privately-owned banks, with the majority of this cost related to the collapse of the Anglo Irish Bank and Irish Nationwide Building Society (IBRC), due to horrific losses on property loans.

€35 billion, representing 22 per cent of Ireland’s GDP in 2011, has gone to paying debts incurred by investment corporations which have no sovereign guarantee and which occurred before the state took control of the bank.

The major debt burden due to the IBRC relates to promissory notes that the Irish government has provided, which in turn are largely being used to pay off
Exceptional Liquidity Assistance (ELA) loans that have been provided by
the Central Bank of Ireland.

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Irish and international advisers alike have said that the Irish government
has no moral obligation to pay these debts; therefore, a change in its policy
should be made in relation to payment of unsecured Irish Bank Resolution Corporation (IBRC) bondholders.

‘This government came in on a wave of promises to negotiate hard to get write downs on this debt. They had a mandate from the people to do so. Major capitalists, like George Soros, said the bond holders should take losses. The IMF has said unsecured bondholders could take losses. But the government’s negotiating strategy, instead, has been to do whatever the European Central Bank and the bondholders wanted. The Government said its negotiating strategy had moved on to the promissory notes. But a substantive deal on promissory notes hasn’t happened – all we got was a one-year deferral that’s going to cost us an additional €90 million.’
- Deputy Stephen S. Donnelly TD.

Interestingly, Stephen Donnelly studied engineering at UCD and MIT and in 2008 completed a Masters’ degree in Public Administration and International Development at Harvard’s Kennedy School of Government, ‘examining, in detail, the interaction between the IMF and small states’.

The Parliamentary debate on Finance Bill 2012, with its 270 specific proposals,
which claims to be an action plan for jobs in export-led growth, was held on
15 February 2012. Of the twenty or so Ministers and Deputies who contributed to the debate, very few appeared to have studied it in any detail.

Deputy Stephen Donnelly criticized the Bill for the lack of technical appendices:

‘There are two interesting metrics. The first is the amount of technical detail supplied to parliaments in order to allow them to interrogate government proposals. Out of ten, we scored zero. The second is the amount of time parliament is given to interrogate government proposals on a finance Bill. The minimum recommendation is three months. Out of ten, we scored zero. It is another example of the most centralised decision-making process in Europe... The Bill forecasts growth of 1.3% when the Central Bank has downgraded it to 0.5.’

Without these liabilities, Ireland could have avoided the EU-IMF bailout programme,
and could have prevented the consequent severe austerity measures that are being imposed on the people of Ireland. Moreover, it all goes back to the extreme levels of corruption described by the Mahon Tribunal.

The IMF regularly breaks down national sovereignty as revealed by John Perkins, author of Confessions of an Economic Hit Man, 2004:

‘You have a resource that corporations covet. You arrange a huge loan to that country and strike a really good deal for multinational corporations and then in the end the country can't pay off its loan. You've got em! They're part of the empire! You can ask favours. You can ask them to vote for you in the next UN vote, whatever.'

According to Paul Krugman, Professor of Economics at Princeton University:

‘... the key point is that the two false diagnoses [excessive welfare states & excessive deficits] lead to policies that don’t address the real problem. You can slash the welfare state all you want (and the right wants to slash it down to bathtub-drowning size), but this has very little to do with export competitiveness. You can pursue crippling fiscal austerity, but this improves the external balance only by driving down the economy and hence import demand, with maybe, maybe, a gradual ‘internal devaluation” caused by high unemployment.’

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An alternative approach to raising government funds is available.

Fine Gael’s 2011 election manifesto advocated Site or Land Value Taxation,
rather than taxing house values.

On 18 April 2012, economists of the Economic and Social Research Institute (ESRI) dismissed the idea of taxing the value of the site the home is built on, recommending instead that the government tax the combined value of sites and homes --without reference to collecting royalties on sales of natural resources, aka Resource Rent.

As long as developers, speculators, and bankers dominate economic theorem, there is slim hope that ‘the people’ can implement a simple one-step change to the taxation system whereby only the site value of land is taxed, and in lieu of all income and business taxes. Numerous highly qualified Irish economic commentators are currently debating this approach to raising public revenues:
Examples include: feasta.org | irisheconomy.ie | smarttaxes.org | daft.ie

One of the most influential leaders of Ireland’s independence movement, Michael Davitt (1846-1906) advocated land tax: ‘I would abolish land monopoly by simply taxing all land, exclusive of improvements, up to its full value... In other words, I would recognize private property in the results of labour, and not in land.’
(Source: "Some Suggestions for the Final Settlement of the Land Question",
by Michael Davitt, 1902 - Archived)

‘The Irish land struggle started out promisingly enough in the 1880s with a clear mandate for the three Fs of Fair rent, Fixity of tenure and Free sale of tenant improvements or tenant right. This provided an excellent structure with which to understand the dynamics of property in land. Michael Davitt of the Land League had a clear vision of what legislative and fiscal changes were needed for Irish peace and prosperity which he shared with Henry George, the American social and economic reformer.’ Emer Ó Siochrú (daft.ie)
See Land Value Tax: Unfinished business, Emer Ó Siochrú, November 2004

Irish economist Ronan Lyons’ 2011 proposal was relatively straightforward: ‘use the best information we have currently (1.3 million sales and lettings ads posted on daft.ie between 2006 and 2011), and the best methods available for establishing the components of house prices to implement the best known form of taxation (Site Value Tax) on an interim basis, in an area where Ireland desperately needs new revenues: residential property. And when better information becomes available – in particular, the Revenue Commissioners register of transactions – then that can be used for a full Site Value Tax.’ (ronanlyons.com)

The Irish Republic Proclamation of 1916 was a message of national freedom, sovereignty and equality for all Irish citizens, and is as relevant today as it was then: ‘We declare the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible.’ This right must not be undone: Collecting Land / Site Value Tax, aka Resource Rent, etc. in lieu of taxing productivity can both achieve economic justice for all and protect Ireland’s sovereignty, once and for all.

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Go to: The Irish National Land League and Michael Davitt, (2016)

Go to: The Celtic Files