The Bull

ISSUE 4 VOLUME 4

Thursday 6th March 2015

DUBLIN UNIVERSITY’S FINANCIAL NEWSPAPER - PAGE FOUR -

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ISIS

LYNN RUANE

AER LINGUS

BREXIT

Have we lost the battle for Libyia?

Brian Fleming interviews incoming SU President

Will IAG complete takeover of Irish flag carrier?

Why Ireland should be worried

- PAGE TEN -

UK ELECTIONS 2015 Who will walk through this door as British Prime Minister come May?

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THE BULL NEWS

NEWS

Report shows rising inequality in Ireland Ryan Morgan

HSBC in major tax evasion scandal Leaked documents reveal that British based bank HSBC helped rich savers avoid hundreds of millions of euros worth of tax.

Data obtained by Le Monde for over 100,000 HSBC clients from 203 countries who held accounts in the Bank’s Swiss subsidiary appear to show staff at least complicit in attempts to evade tax. International savers held an estimated €118bn worth of assets in the private Swiss bank.

The man behind the leak Hervé Falciani, a former employee of the Bank originally sent the list to former French Minister of Finance and current head of the International Monetary Fund Christine Lagarde.

This was the basis of the infamous Lagarde List of roughly 2,000 potential tax avoiders sent to Greek authorities in 2010.

The current revelations are part of wider data seized from Mr Falciani by French Police and sent on to governments around Europe in an effort to clampdown on tax evasion. Le Monde then obtained the list and along with media outlets across the world put together a comprehensive list of those involved.

Neither offshore accounts nor tax avoidance are crimes in themselves, nevertheless the documents suggest HSBC actively helped clients hide money from the relevant authorities which constitutes tax evasion and is illegal. The Company now faces criminal investigations in a number

of countries.

While the Bank’s home, the UK has decided not to press charges Chancellor George Osborne announced new fines for any bank caught aiding their customers to evade or aggressively avoid tax.

He proposed creating the new offence of ‘corporate failure’ to stop an ‘economic crime’ in his last major policy announced before the upcoming General Election.

This is just the latest scandal to rock HSBC, who had weathered the Financial Crisis better than many of their competitors. Record money laundering fines are largely responsible for the Bank’s 17% fall in pre-tax profits in 2014. With their involvement in the LIBOR scandal yet to be fully resolved it is likely even more penalties will impose.

CEO Stuart Guilliver has become the face of the scandal after it emerged his salary was paid through a shell company in Panama into a Swiss account. Mr Guilliver claims that this was to stop other employees seeing what he earned and not to hide his income from British tax authorities.

Controversy has also been caused by reports HSBC have attempted to exert commercial pressure to avoid negative media coverage.

Senior political correspondent Peter Osborne resigned from the Daily Telegraph claiming management were suppressing negative stories relating to the scandal to protect their lucrative advertising account with the multinational bank.

Over a third of the country’s income is concentrated in the top 10% of earners, exacerbating the gap between the rich and poor in Ireland towards “US levels of inequality”, that’s according to a report released by the Think-tank for Action on Social Change (TASC) last month.

The report, Cherishing All Equally: Economic Inequality in Ireland, hailed by the left-leaning thinktank as “the first detailed analysis of economic inequality in Ireland”, warns that the government need to significantly adjust their taxation methods and economic policy in order to improve health, educational attainment and promote sustained economic growth.

Perhaps the most harrowing element of the report is it’s identification of Ireland as not just the most unequal country in EU, but in the entire OECD when examining inequality from a market income perspective – a statistic that could prove damaging to the Government as it continues to reinforce Ireland’s dwindling unemployment rate and recent characterisation as the fastest

growing EU-economy.

The relevance of the report is further complemented by public sentiment on the issue, a public opinion poll conducted by Behaviour & Attitudes last October revealed that an over-whelming 90% of respondents believed that the government should implement policy to minimise the gap between high and low earners (64% of which agreed strongly).

The publication of the document however, has not been without criticism. Indeed, one Irish Times correspondent described the debate surrounding the issue as “one of the worst instances of statistical abuse since Pythagoras”. Opponents point to the fact that when allowances are made for the influence of government intervention via taxation and welfare spending Ireland is nearly bang-on the European average for income inequality. Nevertheless, this also shines light on the costly approach required from government transfers in order to narrow the gap.

The debate surrounding economic inequality is not only gaining traction in Ireland, but has become a world-wide phenomenon

with the publication of French economist Thomas Piketty’s Capital in the Twenty-First Century, an acclaimed critique of how global capitalism has expanded inequality to a concerning extent. However, regardless of what outlook one holds in the area of economic inequality, a lack of empirical research conducted in the area proves a fall-back for any sense of informed debate on the issue. Central Bank Governor, Professor Patrick Honohan, himself referred to the issue as “neglected to a surprising degree in most analysis of economic statistics”.

During its founding years the Proclamation of the Republic called on Ireland to cherish “all the children of the nation equally”. The highminded phrase was not an exclusive reference to children, but the government’s responsibility to instill and protect the social and economic rights of all their citizens. Nearly a century on, with Ireland becoming an increasingly less egalitarian society, can we maintain that our intention remains intact?

Russian opposition leader murdered Andrew O’Donovan On the night of February 27th, a Russian politician and long-time critic of Vladimir Putin was assassinated.

He was crossing a bridge only minutes from the heavily monitored and fortified Kremlin when shot four times in the back from a passing car.

Nemtsov, a former physicist, rose quickly in post-communist Russian politics, partly thanks to the patronage of the then president, Boris Yeltsin, whom he had supported during an attempted coup. Later appointed deputy prime minister, he was seen as the anointed successor to Yeltsin. However the economic crash of the late 90’s that resulted in repeated purges of Cabinet and precipitated Yeltsin’s eventual resignation, saw Putin, then a relative outsider, become prime minister, and the prominence of Nemtsov wane.

Tens-of-thousands marched in Moscow at what had intended to be

an opposition rally led by Nemtsov, but which became a vigil to his death.

Conspiracy theories have abounded as to the perpetrators of his killing.

The spokesperson for Russia’s criminal investigations force, Vladimir Markin, said it was possible that he had been “chosen as a sort of ‘sacral sacrifice’ by those who don’t hesitate to use any methods to reach their political goals,” implying someone from within Nemtsov’s own circle.

Ukrainian president, Petro Poroshenko, declared that the killing had been, “organised by Putin in order for him to stay in power,” claiming that Nemtsov was intending to publicise “clear evidence” of the participation of Russian armed forces in the fighting in Ukraine.

However, at a time when Russia is becoming ever more fervently patriotic, Nemtsov’s anti-Kremlin stance – which included opposition to the annexation of Crimea – would have enraged many in the country,

and the list of possible culprits is long. A charismatic politician who, almost uniquely, managed to remain uncorrupted, his commitment to liberal values and opposition to Putin’s kleptocracy will be much missed.

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THE BULL NEWS

Editorial Staff

Low inflation triggered QE, says ECB Minutes As part of an effort to bring the European Central Bank in line with other major central banks an ‘account’ of their monthly council meeting has been made public for the first time. It gave an insight into the Bank’s decision to eventually launch a programme of Quantitative Easing after many months of speculation.

The primary motive was revealed to be fears of a prolonged period of low inflation after falling oil prices caused prices to deflate in the Eurozone for the first time since 2009. The stakes were raised when the Bank’s Chief Economist Peter Praet warned that delaying such a programme could lead to a downward price spiral taking hold. This is that consumers expectations of lower future prices will lower demand today, further depressing prices and the economy as a whole. Once caught in this it is a difficult trap to escape from until consumers become credibly convinced that prices will begin to rise.

The majority of the ECB’s members seemed to heed Mr Praet’s warning approving a programme that would purchase the €60bn bonds per month from this month until at the very minimum September 2016. Indeed this is more than Mr Praet’s preferred option of a €50bn dose of QE. The minutes also divulge that QE will be extended beyond the original date until inflation begins to converge with the ECB’s 2% target.

The account released by the ECB may be almost twice as long as its Bank of England (BoE) equivalent but unlike their British or American counterparts it does not reveal how individual members voted. The argument each head of a domestic central bank could be vulnerable to pressure from their national government if their preference was released. Despite this ECB President Mario Draghi declared that all the Zone’s central bankers were in favour in principle although the minutes reveal some urged caution and delay

in the implementation of QE. With the decision not unanimous it is likely that the dissenting voices included Austria, the Netherlands and crucially Germany all of whom are long time opponents to inflationary measures. However the minutes suggests such dissent was relatively muted, yet this may be more a reflection of the real debate taking place behind closed doors in smaller meeting before the council met.

It was also decided at the meeting that the purchase of sovereign debt was the only reasonable approach to take.

How this will be implemented across the 19 members of the Euro, each will widely diverging costs of borrowing remains to be seen. As it stands the Irish Central Bank is to join their parent the ECB in buying a possible €13bn of Irish bonds over the next 19 months.

The commitment of the ECB to longterm monetary expansion has led to an immediate surge in the bond prices.

Yields on Irish Government Bonds fell to a low of 0.85% following the news, a trend which has been similar across the Eurozone. These lower yields will reduce the costs of borrowing for all affected countries, thus possibly alleviating the strain of austerity across Europe.

The ECB is not the only European monetary authority in a serious battle with deflation. The Swedish Central Bank announced last month a massive quantitative easing programme to go along with an interest rate cut to a record low -0.1%. This is in response to a year on year price fall of 0.3% for the month of January. The authorities also raised expectations of further expansions in monetary policy should they be required. The decrease in current and expected future investment returns has led to a further decline in the already weak krona as investors move capital abroad. The Central Bank hopes this increase in competitiveness will boost demand for domestically produced goods both at home and abroad.

Editor: Deputy: News: Features: Opinion: Economics: Finance: Design/Layout: PRO: US: Asia: Campus: EU: Health: Ireland:

Callum Trimble-Jenkins James Prendergast Andrew O’Donovan Anna Brennan Rory O’Donoghue Andrew Nevin Eoin O Nuallain Jordan Boyd Mark Hughes Tom Kelly Michael Scholz Jr Brian Fleming Eleanor O’Mahony Andrew Corby Ryan Morgan

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Serious complaints should be addressed to: The Editor, The Bull, Box 31, Regent House, Trinity College, Dublin 2.

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THE BULL FEATURES

Libya lost?

L Brendan Rooney

ibya is a war-torn country that aspired and failed to become a democratic nation with democratic values. A civil war with Western backing against Col. Muammar Qaddafi has left it a failed state with the extremist militia known, Libya Dawn controlling the capital of Tripoli and the democratically elected government now centred at the opposite end of the country.

The West supported the rebel movement to depose the Libyan leader and launched airstrikes to assist the rebels but forgot about the country in the aftermath.

Nonetheless, with the recent highprofile exploits of ISIS there, Libya now represents a high-level security threat to Europe. The exact extent of ISIS’s presence is not known but the group is establishing itself as a major player there as it did during the Syrian Civil War. It has taken over several coastal cities including Sirte, Derna and Benghazi and is making inroads in many other parts of the country.

ISIS seems to be systematically and aggressively seeking to terrorise with the gruesome beheading of 21 Egyptian Christians. This, coupled with threats to bring jihad to Rome, they have provoked round-theclock publicity as well as fear and outrage in the Western world. This behaviour, while brutal and still baffling to the West, is characteristic of ISIS and not surprising in the least.

But what is astonishing, and, in fact, very worrying, is the limited action and notice given to Libya by the international coalition.

So far, the only action taken has been by Egypt, which launched a

bombing run in Derna in retaliation for the murder of 21 of their citizens, and Italy, which is urging NATO action and had deployed thousands of soldiers around the country to protect symbolic targets, especially in Rome. The Vatican is also on very high alert following ISIS threats against the State and Pope Francis.

Italy has more reasons to be worried than other countries, due to its close proximity to Libya. Since 2011, refugees have fled Libya in droves spilling into Egypt, Tunisia and Italy. Thus Italy is fearful of another sudden spike in refugees from Libya. Already over 170,000 have crossed in 2014 and it is estimated that over 200,000 more are poised to cross. The biggest concern is that ISIS, already boasting of its plans to “conquer Rome”, will try to hide its fighters among the refugees in order to gain access to Europe. After months of warning that Westerners fighting for ISIS might return home to Europe from Iraq and Syria to wage jihad, the threat of ISIS has just materialised much closer to home. And Italy might just be on the frontlines.

Italy’s relationship with Libya is a complicated one. Before the Arab Spring in 2011, Italy had, if not a close relationship, than a practical one with Qaddafi. Italy invested billions in the country’s infrastructure, relied on Libya for over a quarter of its oil supplies and the two countries worked together to patrol the coast.

These agreements have all gone sideways as Italy was forced to side with its European partners even as Qaddafi forewarned, long before ISIS was ever present in Libya, that the Mediterranean would “become a

sea of chaos” of refugees and Islamic extremists.” Still, Italy did not interfere too directly in the country, conscious that they are seen as Libya’s colonial masters.

But threats and fears of an attack in Rome are changing Italy’s stance.

Lone wolf attacks have already occurred in Paris, Copenhagen, Sydney and Ottawa. Although Italians have treated ISIS threats with humour and scorn on the internet, security and government officials worry that Rome may be next on the list and Italy have declared that they are ready to lead an international intervention against ISIS in Libya.

While Egypt face ISIS on two fronts in the East and West and most of the international coalition are focused in Iraq and Syria, ISIS is building support in Libya and Tunisia to gain entry into the Maghreb (North Africa). If they are successful soon they won’t be just threatening entry into Italy but Spain and France as well. ISIS are being bombarded daily in Iraq and Syria but the airstrike-free Maghreb seems ripe for the picking by comparison. Europe is watching and listening but waiting instead of taking a decisive role to support Italy.

Western intervention in Libya is an example of what has been labelled as “the West’s double standards” by many countries. The Libyan Civil War was exactly that, a civil war between loyalist and rebel forces. There was neither a threat to Europe or America nor any humanitarian crisis. Nothing that could have urgently called for a NATO naval blockade or bombing campaign. On the contrary, the humanitarian crisis only begun after the fall of Qaddafi and NATO strikes had demolished the country’s

infrastructure.

The West is still reeling from its many interventions in recent years. It is a costly price that the West is learning. It is more reluctant to involve itself in country’s civil affairs as seen in Syria and Iraq. The airstrikes were only brought out this time after the horrific beheading of Western civilians by ISIS. But is the West learning the right lesson? Perhaps the West should show more caution before interfering but how does this apply to countries like Somalia, Iraq, Afghanistan and Libya; countries where the West has intervened militarily but then withdrew before ensuring peace and stability. The Taliban are as prevalent in Afghanistan as they ever were, a third of Iraq is occupied by ISIS and Somalia remains a humanitarian catastrophe as well as being a central hub for Islamic jihadists. If it is a mistake to meddle militarily in countries, it is an even greater miscalculation to abandon those countries.

The time is running short to prevent the spreading of ISIS in Libya and the Maghreb. There is an increase in reported communication between ISIS and Boko Haram in Nigeria. The initial falling out of ISIS and Al-Qaeda is over; they have stopped fighting one another and have, on occasion, worked together in Syria. They are also communicating in Tunisia.

Right now Libya is the next instrumental step to stopping ISIS. Not just to protect Europe’s southern borders but perhaps preventing the entire Maghreb from being engulfed in jihad.

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THE BULL FEATURES

The social costs of economic success in North Dakota

Aonghus Fahy

A

n oil boom starting in 2006 has recently allowed North Dakota to pass Alaska and California in becoming America’s second biggest oil producing state.

Thanks mainly to the use of horizontal drilling and hydraulic fracturing, commonly known as “fracking”, 1.1 million barrels of oil a day are extracted from the Bakken formation.

An area which lies under the fourth most sparsely populated state in the country. This has led to an unprecedented economic boom for this rural agricultural state. Unemployment in North Dakota is 2.6% well below the national average of 6.3%. The town of Williston, the centre of the state’s oil production, has less than 1%, which in economic terms is full employment. In 2013 the state made over $2.5 billion in tax revenue related to the oil industry.

Many have hailed North Dakota’s economic success especially given the recent debate in Washington over the building of the controversial Keystone XL pipeline. Although the flow of oil from the ground has effectively ended unemployment and the tax revenues have given the state a budget surplus, it has been accompanied by a flow of crime and social problems into the state.

The rise in vice crimes has put the

state’s law enforcement agencies under immense pressure as officers and lawyers deal with crimes that were previously non-existent in the rural state. Prostitution, human trafficking, narcotics, and illegal gambling have all thrived as multitudes of mainly young men pour into the state looking for employment. The FBI estimate the violent crime to be increasing by 7.2% annually. The police are severely ill-equipped to deal with these issues and in need of investment.

The average wage in the state’s oil industry is $99,668 which is much higher than the state average of $47,779. This has led to other businesses raising wages to compete

for labour. During 2014 Walmart in Williston hired new employees at $17.40 an hour to compete with the salaries offered by the oil companies.

This has caused problems for small businesses in particular who are losing employees to higher paying jobs in the oil fields.

Although the boom has slashed unemployment many people struggle to find accommodation. The influx of people into North Dakota has resulted in a housing crisis.

Williston has seen its population triple from 12,000 a decade ago, resulting in a 700 square-foot one bedroom apartment averaging $2,349 a month and the bizarre fact that parts of rural North Dakota are

now more expensive than sections of New York City. Oil companies have been buying up entire apartment blocks to house workers, leaving locals unable to afford housing.

The state estimates that over 2,000 are homeless in a state of 739,482 people.

As debate over the economic benefits and environmental costs of America’s oil industry continue in Washington, real social issues on the ground in North Dakota are largely overlooked and ignored.

Alaska faced many of the same issues during the 70’s at the height of its oil boom, failure to address them led to economic as well as social costs for the state.

Elections find Nigeria teetering on the edge

Cathal Kavanagh

N

igeria’s presidential elections threaten to introduce further instability into a country already beset by seemingly intractable problems. The threat of violence hangs over Africa’s largest democracy. Sunni Islamists Boko Haram have run riot in the country’s North, being blamed for the deaths of over 18,000 people thus far, and for the internal displacement of 1.5 million more. Supporters of rival presidential contenders have given intimations of a violent reaction should their candidate lose a fraudulently conducted election. Far from being a Westernstyle “apex of democracy”, former US ambassador John Campbell says that elections here present a potentially destabilising agent, and that African democracy may in fact regress come the first casting of ballots on April 11th.

Incumbent president Goodluck Ebele Jonathan of the People’s Democratic Party (PDP) runs in what is essentially a two-horse race against Muhammadu Buhari, a 72-year old Northerner who previously ruled the country for nearly 2 years after a military coup in 1983. Buhari, long reformed as a democrat, this time represents the All Progressives’ Congress (APC), a coalition of the country’s four hitherto-largest opposition parties, established in 2013 as a united front against the administration. In spite of his dictatorial past, Mr. Buhari, who

has run in every such election since 2003, is seen as having strong ascetic credentials and representing an alternative to corruption, something which has plagued the country since the colonial era.

Jonathan, who’s PDP has ruled the country since the restoration of civil rule in 1999, originally came to the presidency upon the death of Umaru Yar’Adua, whom he served as Vice President, in 2010. Winning outright in 2011 after a controversial election, the aftermath of which led to hundreds of violent deaths, Jonathan’s term has been largely ineffective. The president has long been thought unable or unwilling to properly combat the rampaging Islamists in the North of the country, and is accused of a thorough mismanaging of the country’s growing economy. While Nigeria is weathering the international storm better than most, the recent collapse of oil prices to $60 a barrel falls well below the $122 the country requires to break even. Oil revenues make up 70% of GDP, and 90% of government income, so a protracted slump in global prices could rent the economy asunder. Coupled with the collapse in oil prices has been a collapse in the value of the Naira, going from 165 NGN/$ in early November, to over 200 NGN/$ by mid-February.

There is much to feel optimistic about in the Nigerian economy, with GDP tripling since 2004, and Foreign

Direct Investment levels the highest in Africa. This optimism is threatened, however, by an election, and a political landscape, which could potentially undermine not only the peace, but the legitimacy of the state itself.

The prospect of the Christian Jonathan gaining a second term has been controversial from the outset, with an unspoken tradition going back to independence that the presidency alternate between a Christian and a Muslim at each election. The rules of the ballot are themselves complex. The winner will require not only 50% of all votes cast plus one, but will need to get a quarter of the vote in at least two thirds of the federal states. This second requirement in a highly divided country, one of the only in world with a nearly 50/50 IslamChristianity split, opens the door to ballot stuffing and vote-rigging.

The regionalism which has marked the country since the Biafran war of 1966-70 and before, rears its head at election time. In 2011, Buhari won every state which has a Muslim majority, Jonathan winning all but one of the rest. Supporters of the APC, which already rules Lagos and a series of federal states, have threatened to establish a parallel government should the result be considered illegitimate. Opinion polls have the result on a knifeedge, only adding to the levels of

tension. Mr. Jonathan has spent the campaign reminding the electorate of his achievements, and making lavish promises of capital projects to be invested in upon his retention of the office. Meanwhile, his events and convoys in Northern provinces have met highly hostile receptions.

The elections, which have been controversially postponed until April 11th to allow the state distribute voting cards and, more urgently, to fight the threat of Boko Haram, have the potential to unleash further turmoil should they be seen as fraudulent or unfair by either group of supporters.

It is Boko Haram, however, who represent the biggest threat.

Established in 2002, the group have become increasingly violent as the years roll by. By now controlling a territory larger than Belgium, the group have made global headlines for their 2014 kidnapping of 155 schoolgirls and the massacre of up to 2,000 people (a figure questioned by the government) in the town of Baga in January this year. Joint operations with the armies of Chad, Cameroon and France have seen the militants lose ground in recent weeks.

However, they remain a potent force, who if not dealt with, will only continue to undermine the authority and security of the West African state.

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THE BULL FEATURES

DSK: The rise and fall?

I

Anna Brennan

t is almost four years since the NYPD arrested Dominique Strauss Kahn, then leader of the International Monetary Fund, while attempting to board an Air France flight to Paris in May 2011. At the time, he could be seen to be the at the apex of his political career - nothing seemed out of his reach with his approval ratings as head of the IMF consistently high and the French press almost unanimously citing him as the next Socialist nominee for the Presidential elections.

Less than a week after his arrest, Mr. Strauss-Kahn resigned from the IMF, firmly denying all accusations and saying that he would devote ‘all his time and energy to proving his innocence.’

Though DSK (as he is known in France) would spend 6 weeks under house-arrest at an apartment on the Upper East Side in New York, the criminal proceedings fell apart when cracks began to appear in the testimony of its lead witness, a hotel maid at the New York Sofitel. A civil suit was quietly settled out of court almost a year later, and DSK seemed to have successfully weathered the worst of the storm. Upon his return to France in late 2011, some even called for his nomination as the Presidential candidate in the upcoming elections, just as had been planned before his arrest. It could have been the most miraculous preservation of political reputation, but hardly a couple of months had passed before fresh allegations of sexual assault were made, this time focussing on the part played by Strauss-Kahn in what became known as the ‘Carlton Affair’, a ring of businessmen and politicians accused of soliciting prostitutes and orchestrating lavish ‘sex’ parties in Paris, Lille and DC. These allegations form the basis of the highly mediatised trial that came to an end last week. The whole case grew out of a long-standing investigation into the key defendant

in the trial, a Belgian businessman and brothel owner known as Dodo la Saumure (roughly translatable as Dodo the Pimp). The case in Lille sought to determine whether DSK, among 13 other defendants, was guilty of charges of ‘aggravated pimping’, but due to quirks in the French legal system, and generally to the amount of influence political power-plays appeared to be having on the whole affair, reports from the Court have been puzzling to the foreign press.

Starting from the end, a case where the prosecutor closed by calling for the defendant’s acquittal naturally bewilders a bystander not particularly au fait with the workings of the French legal system, and particularly the law on prostitution and solicitation in France. First off, the act of ‘using’ a prostitute for lack of a better term, is not a criminal offence in France. Similarly, being a prostitute is not criminalised. This is an ongoing source of controversy in France with feminist groups on both sides of the argument lobbying for change - Strass, a union of French sex-workers seeks to put in place controls to prevent abuse, violence and extortion against its members, whereas the powerful Mouvement du Nid is a long-established association who calls for the abolition of prostitution in France and seeks to criminalise ‘clients’ of prostitutes.

Another aspect of the French legal system that distinguishes it from that of the UK, Ireland and the US is the hugely impactful role played by the juge d’instruction - the magistrate of first instance who conducts an initial investigation into the charges, and with whom ultimately lies the power to bring a case to trial, or to dismiss it. As above, the role of such judges is constantly under debate in France, with most commentators noting that to a greater or lesser extent, there are issues surrounding the impartiality of this system.

The media and political attention that the trial was always going receive was well nourished - the case exposed some of the most intimate and sordid details of DSK’s private life.

His lawyers claimed that the media attention had turned France into a nation of voyeurs where magazines and newspapers seized upon highly explicit evidence of DSK’s sexual preferences. The French press and public, though often lauded as having a much more ‘liberal’ attitude to sex than their British and American counterparts, as well as upholding to a greater degree the notion that public figures should be allowed to maintain a semblance of private life, unsurprisingly did not fail to be disgusted by the reports of violence and misogyny.

However, a point that has to be made, however uncomfortable, is that the law does not serve solely to criminalise behaviour which we find morally reprehensible -even if we would like it to. As counsel for Mr. Strauss-Kahn repeated again and again during the trial, the Court’s purpose was not to serve judgment on whether DSK was a sexual deviant, or whether they thought his actions were morally justifiable, or even whether they believed him to be ‘a good person’. On the contrary, in order to find him criminally liable, a relatively high threshold of both knowledge and control would have to be met.

In order to secure a conviction for ‘aggravated pimping’, it would be necessary to prove that DSK knew that the women were prostitutes, and more than that, that he had actively solicited them as prostitutes, and organised the parties at which they were employed. This was repeatedly denied - counsel described the defendant as a ‘libertine’, seeking multiple partners for consensual sex as a matter of personal taste.

That DSK was candid and even detached in describing his sexual

life when pressed on the stand only served to make his testimony more chilling - he considers that ‘women threw themselves’ at him, because of who he is, describing himself as ‘one of the most powerful men in the world.’ But again, this behaviour is not necessarily criminal, and this was where the case fell apart - the evidence to prove this level of involvement just wasn’t there.

The fact that Mr. Strauss-Kahn had treated the women he slept with ‘roughly’ or with little respect wasn’t a factor in the legal analysis, and too quickly this became apparent.

5 out of 6 plaintiffs retracted their accusations against Strauss-Kahn on the 16 of February, with the trial culminating in the prosecutor calling for an acquittal the following afternoon, recommending to the judges that a conviction could not be valid under the French Code Pénal.

Though the verdict will not officially be handed down for several months, the overwhelming consensus is that these closing remarks marked the death-knell in the case against DSK. And so we are left with a somewhat bitter taste in the mouth. It is undeniable that the reputation of a man who once saw himself on top of the world has been dragged through the gutter. While it may be difficult to feel any sympathy for him given the exposure of the extent and intensity of pain his actions seem to have caused, questions remain - would such a case ever have be taken had DSK been a ‘nobody’? Will StraussKahn ever be able to rejuvenate his political career - and should he be allowed to? But perhaps the more important questions surround the way in which the French legal system approached the case - what remains for vulnerable women exploited by rich and powerful men, when the law seems so inadequate to provide them with relief?

7

THE BULL FEATURES

Interview with incoming SU President Lynn Ruane

Campus Editor Brian Fleming catches up with the recently elected Lynn Ruane to discuss her policies for the upcoming year -With regards access you make an impassioned point for making education accessible to all. While commendable, is this not an issue the government should be concerned with? Are you suggesting allocating Trinity funds to help non-students while many in our student body are currently struggling?

Lynn: This is an issue for us all to be

concerned with. The inequalities and the class divide can begin to be broken down with education moving away from the current situation of privilege. It is no doubt that the government need to create a society where equal opportunity prevails.

However, what better place to start than one of the most prestigious universities in Europe. It is vital that the SU aim to create change for all current and future students in any cases of inequalities. National issues and even on a European level the SU needs to be reaching higher in its demand for better equality for all.

I want to lobby the college to create a credits system whereby TCD students mentor non-students from non-traditional backgrounds.

This would be introduced as a pilot programme on a trial basis. This would have little financial impact on current SU funding. My hope is to work within the current structures such as TAP, the Access Officer and societies such as VDP.

-Where will the finances come from for the new protest group you aim to establish? How will its conception serve the students of trinity college and will it be money well spent?

Lynn: There is budget each year to

carry out campaigns. I will work within that in regards to the activism workshops and campaigns. I feel the fact I have been elected highlights the desire students have to engage more actively on a political level.

A sense of community, solidarity and skills centred on strategic mobilisation will serve the students who participate. We are all affected by decision made at a college and government level whether they be cuts to student’s services, increased charges, the absence of marriage equality, or the non-repeal of the 8th amendment. If students can begin to rise up and voice their opinion as a collective then yes it will be money well spent.

-How do you intend on allocating resources for the part-time staff for off campus students? Will another aspect of the student union have to be sacrificed for this?

Lynn: The creation of a part-time

officer first has to be brought to Council before it is implemented.

However, I will find the budget for

the other officers. It will be small and will contribute to maybe one event or campaign they want to run.

Ideally the part-time officer should be working closely with their college counterparts to raise awareness and organise events in relation to their particular roles.

For example, the Sports Officer can work with the sports centre, the Disability Officer can work with the disability service and so on.

If we begin to collaborate and coordinate more effectively, this will relieve some of the financial barriers to organising specific events.

When I look at a 10% cut to a counselling service or a hike in student charges I see that as the college sacrificing students’ general college experience, education, and wellbeing in order to make up for the shortfall in their college expenditure.

I will not go down this road that sees students or a particular SU service sacrificed.

This year I organised three events for College Awareness Week. Through those events and also events organised by Domhnall and the Access Officer we raised €500 euro.

We are allocating that to the Access Officer - it will be a small budget to organise an event specific to their role.

-How exactly do you aim to reevaluate college expenditure?

And how would you like to see the funds reallocated to the hardship fund, welfare services and practical facilities that you mention?

Lynn: The provost’s Strategic Plan has

a number of goals and objectives that cannot even begin to materialise with the current culture of cuts and charges in the college. If students were more active and less passive on these matters I feel the college would have no option but to re-evaluate their expenditure. Recently at council the provost said that the rebranding “only” cost €100,000’. His wording unsettled me - ‘only’ a hundred grand. That hundred grand could be allocated to a number of student services and would have so much more value than Patrick Prendergast attached to it. If the college can on one hand cut the counselling service and on the other propose a rebrand then it is about time for college decision makers to be held accountable by the people who provide them with their income.

The college seems to selectively benchmark itself on other colleges when it comes to proposed student charges. If we are going to benchmark charges against other colleges then we should be benchmarking expenditure too.

8

THE BULL FEATURES

The Hukou System: What About Social Growth?

I Michael Scholz Jr

t is no coincidence that the oldest family tree belongs to the lineage of Confucius. When it comes to record-keeping and bureaucracy, the Chinese have indisputably developed a diligent tradition, with much of this tradition still alive today.

One of the offsprings of such bureaucracy in today’s China is the hukou system. Simply put, it classifies Chinese citizens according to where they are from, and is often referred to as a household registration system, usually including the names and details of entire family. And as the social welfare benefits and services in China depend on which hukou one is from, as well many other benefits, the system plays a crucial role in Chinese society.

The hukou, which has been in use since the 1950s, has been criticised however as a tool of the government to control mass migration within the country. In particular, when it comes to the rural-urban divide of the country, it has been speculated that if the hukou system were to be abolished, the majority rural population, many of which live in the West, could and would migrate into cities in large numbers. This of course would cause demographic

and logistical problems, with urban cities already overpopulated.

The reason why many critics have condemned the implementation of the hukou is that it has been argued to create a social and spatial stratification in Chinese society, between the agricultural and nonagricultural populations. Treated differently, it is extremely difficult for rural hukou residents to acquire the privileges of their urban counterparts, who have access to far more social services and benefits in the cities.

Benefits include public schools, health care, social security, etc.

Though migration is restricted under the hukou system, there is still demand in large cities for ‘demenial’ jobs, many of which are filled by non-local agricultural migrants.

And as they are not locals, they do not have access to local services, leading to poor living conditions, and poor prospects for their family and children. In the meantime, there is no legal obligation by the state to provide any welfare.

Apart from the discrimination of rural hukou citizens, there also exists a split between larger cities and smaller urban centres. Beside the fact that the former are equipped with far more

resources, it can also be observed that when it comes to education for example, students taking the national gaokao exam to enter university, may indeed be taking different exams altogether, eliminating the chance for a standardised and equal opportunity to access top universities.

However, as one of China’s largest social issues, some reforms have been introduced over the last couple of years. The distinction between non-agricultural and agricultural hukou holder has been removed.

This has historic significance, where agricultural inhabitants were expected to be more self-sufficient.

During the famine following the Great Leap Forward, many of the rural population starved to death, as grain rationing was a benefit extended to urban dwellers only.

Additionally, limited cities have recently announced to allow those not locally registered to receive local hukou. This would allow for metic (to borrow a term from a similar discrimination against non-Athenians living in ancient Athens) locals to access the same benefits as registered locals. Nonetheless, this only applies to rather small cities and towns, and the larger urban centres with over

5 million people still maintain their tough restrictions. Equally, as there is a quota on how many hukous can be granted, there is room for positive discrimination for the wealthiest and most educated. And finally, many migrants granted urban hukous are those whose lands were involuntarily repossessed by the state.

China’s economic growth figures and news are well-represented in Western media. However, when it comes to social growth, with issues such as an aging population, corruption, and hukou reform, these often overlooked. But if the PRC’s economic growth is to be taken seriously, it should be taken holistically, with environmental, political and social progress. In terms of hukou reform, the government has recognised the flaw as legitimate, and has taken significant steps in dismantling this anachronistic system, a system which has been compared to the Indian caste system and South African apartheid.

Nonetheless, the hukou system, in its current form, still continues to discriminate and it is to be seen how effective reform and reform rhetoric will be.

9

THE BULL ECONOMICS

Chinese economy slows

Andrew Nevin

C

hinese economic growth is decelerating at a worrying pace posing doubts over the sustainability of the Chinese economy. Last year, the Chinese economy grew at 7.4%, its slowest rate of growth since 1990. As China’s economic slowdown becomes evident, it is obvious that this will have serious ramifications not only domestically, but also for the global economy. China’s economy is also showing signs of cooling further. This will provide a headache for the Chinese party as should unemployment rise, it will lead to social unrest. It could also result in a weaker capacity of the party to maintain political order.

During the past several decades, exports have been a main driver of huge Chinese economic growth.

However, the signs are clear that this driver has lost its energy. Firstly, manufacturing firms that make labour-intensive goods are losing their competitiveness due to rising labour costs. Demand for raw materials is deteriorating in China evident by falling steel prices. China is seen as the industrial unit of the world and if demand for exports decreases, this presents a bleak picture for sustained Chinese economic growth.

The sustainability of the Chinese economy is also threatened by economic inefficiencies. State-owned enterprises have come under scrutiny recently, being described as dominant and inefficient. Nevertheless, reform of

these state enterprises is a balancing act, as to be more efficient, job losses would be compulsory and this could lead to severe social unrest. Excess production capacity is also evident in China, with capacity utilization in 2014 at 72%. This is a serious problem since firms are still investing despite this overcapacity, which is linked to several factors, such as state-owned enterprises facing soft budget constraints and the fact that private firms may also receive subsidies from the government.

China’s international lending is also at levels of unsustainability.

Chinese banks have lent $50 billion

to Venezuela since 2007 and have lent more than $30 billion to Russian oil companies. This is a demonstration of China’s remarkable economic growth, but casts serious doubts over the sustainability of its global lending. This is mainly due to the limited ability of these countries to repay these debts.

Furthermore, there are many other problems with regards to the quality and efficiency of China’s economy.

These include environmental issues such as air pollution and product quality and solutions to these issues could come from further economic reform China.

The Chinese economy faces

huge challenges in 2015 and its sustainability may ultimately depend on economic reform. An important indicator of Chinese willingness to reform will be any policy changes regarding state-owned enterprises.

With the Chinese economic miracle appearing to be coming to an end and economic growth expected to slow further over the next three years, the social stability of China could be severely threatened. The ‘big red dragon’ should take note of this correlation between order and economic growth as the current trend will pose a danger to the Communist Party’s stranglehold on power.

The Effects of Divergent Monetary Policy

Eoin O’Nuallain

T

he times they are a changin’.

So said Bob Dylan in his single released in 1965. Although the topic of conversation in that song has nothing to do with the content of this article, the sentiment is exactly the same.

Rich economies across the globe are struggling. The World Bank estimates that OECD countries will grow on average by just 2.3% this year. Couple these growth issues with massive deflation concerns, particularly in Europe, and a big problem begins to unfold. These problems require fixing, and it is the attempts to do so that has caused our central banks to ‘change’ their monetary policy.

The first step in this change, which has now been carried out in some shape or form by all 4 of the main central banks worldwide (the Fed, ECB, BOE and BOJ) was quantitative easing, a bond buying scheme which aims to instill economic activity and

consumption in an economy by pushing down interest rates.

The ECB though, only due to begin its own bond-buying programme next month, was far later to the game than the rest. This relative tardiness carries with it great significance as the threat of soon-to-be rising rates across the Atlantic looms. This policy divergence between the ECB (and many other Central Banks) and the US Fed has introduced some quite unique challenges for Central Banks worldwide, and none of these situations are more fascinating than in the case of two of our European counterparts – Switzerland and Denmark.

Up until very recently, these two countries had their currencies ‘pegged’ to the euro. What this means is that their respective central banks adopted a policy whereby their currency would keep its value at a constant ratio to the euro. If the euro weakened compared

to the franc or krone, then the Swiss and Danish National banks would buy euros in exchange for their own currency until its value once again equaled its target ratio.

However, this all changed on February 15th when, the Swiss National Bank (SNB) abruptly ended this regime.

Faced with an ever-depreciating euro (meaning added pressure on the SNB to devalue the franc), the SNB decided it was no longer willing to go to such great lengths to protect the franc from the inevitable appreciation that would now surely occur. In fact it took no longer than a matter of minutes for the franc to rise a massive 30%. The move saw the collapse of several largescale brokers, one of which (FXCM) reported client losses of $225mn. The consequences will not just be shortterm closure though; the now stronger franc will have implications for the Swiss economy as a whole. A stronger home currency means that your goods

become relatively less attractive to foreign importers. This of course will be bad for businesses, while it will also greatly hurt the tourism industry.

On the flip side we have Denmark, who have chosen to maintain their peg to the euro. This however has come at a cost. The Wall street journal reported that the Danish Central Bank “sold Danish kroner in record amounts in January”, while at the beginning of February it dropped its main deposit rate to -0.75%, meaning banks effectively pay the central bank nearly 1% to lodge funds in it overnight.

The moral of this story is that with the economic environment now the way it is, Central Banks are increasingly facing situations that they’ve not faced before, and it’s now up to them to get us ‘a changin’ for the better.

10

THE BULL UK ELECTIONS

Time for a change, but to whom?

James Peoples and Deputy Editor James Prendergast dicuss the need for change in the upcoming British General Election James Prendergast

James Peoples

Britain suffered one of the worst recessions following the global financial crisis. Its so-called model of Anglo-Saxon capitalism was blamed for the crisis, especially by continental European leaders. But the British economy is estimated to have been the fastest growing economy in the G7 last year.

Unemployment has fallen to its lowest level since the recession began, declining to 5.7 per cent at the latest count. Proportionately job growth in Britain during the recovery has been better than in the United States.

Chancellor of the Exchequer George Osborne might like to be judged on the growth and employment figures.

But the headline figures are deceptive.

Employment as a proportion of the population is now at an all-time high 73.2 per cent as is the absolute level of employment at almost 31 million. But

On May 7th 2015, UK voters will have the chance of selecting a new government. How the incumbent coalition has performed will be severely tested at this election, with the Liberal Democrats in particular likely to suffer heavy losses. If we rewind the clock back five years, this would have seemed quite improbable given the considerable momentum the Lib Dems had in the polls. However, even a year is a long time in politics. For Nick Clegg and David Cameron, five years have proven very long indeed. Record low government satisfaction, the question over continued membership of the EU, the rise in university fees and youth unemployment, the freeze on public sector salaries and setbacks in NHS reforms have left many in Britain seeking alternative solutions.

For many people, this solution has come in the form of one charismatic man. When Nigel Farage became leader of the UK Independence Party in 2006, very few would have considered UKIP as a viable alternative to the mainstream parties. Yet within a decade, Farage and his Eurosceptic party

real wages are far below the pre-crisis peak and are estimated to be about a fifth below where they would be had pre-crisis trends continued.

Productivity, or output per hour worked, in Britain has also been remarkably weak, having fallen around 17 per cent behind its G7 peers. The Trades Union Congress says that only one in forty jobs created have been full time jobs. This would help explain what is called the “productivity puzzle” since many of these part-time jobs have been in the service sector where increases in productivity are much harder to achieve.

One of the hopes around the recovery was that it would be more ‘balanced’, based more on manufacturing and export industries than on services, especially finance, that have driven the British economy since the 1980s. This type of recovery

are on the verge of becoming more than a protest party.

Whether you consider Farage and his UKIP colleagues to be hidden racists with a dangerous agenda, or antiestablishment libertarians fighting for the restoration of British sovereignty, they have made UK politics interesting again. For the last two decades, the main parties, Conservatives, Labour and the Lib Dems have become unsure of their ideology and inconsistent in their direction. While Tony Blair created New Labour, the Conservatives have taken on the label of ‘compassionate conservatives’. Both these political giants have moved towards the centre and voters view them as increasingly identical. The Lib Dems, in contrast, were the traditional party of the centre. However, this image has needed to change in order to separate the party from their rivals. All three parties have now reached an impasse over their future; Ed Miliband, while left-leaning, does not want to distance himself from New Labour supporters; David Cameron appears to be moving the Conservatives between centre and

would also be more geographically balanced, less centred on London and the South East of England.

The nature of the recovery has disappointed, largely resembling the pre-2007 boom. Figures from the Bank of England show that lending to consumers is rising at the fastest pace in a decade, while lending to businesses is lacklustre. Investment as a proportion of the economy in Britain is one of the lowest in the world, and it is worrying for Britain’s economic future that it remains so low this far into an economic recovery.

Britain’s recovery so far has been of low-quality as revealed in the overwhelming preponderance of parttime jobs and the service sector in the recovery. With employment at an alltime high, further growth will have to come from increases in productivity.

As long as growth is dependent on

centre-right; and Nick Clegg is trying to turn Lib Dems into the socially progressive, Pro-European party.

While these leaders and their parties have struggled with their ideological images and direction, UKIP appears very sure and confident on its policies. Farage’s populist, messages have helped the party to capture disgruntled conservatives, old labour voters and disillusioned Lib Dem supporters, as well as securing the imagination of undecided voters. Whatever your opinion of them is, one thing that they must be commended for is breathing life back into dry political debate in Britain, which has embodied twenty years of weak politics and dubious prime ministerial leadership. Their controversial policies, their tendency to ignore political correctness, which enslaves the other parties to an oversensitive society and their ability to make Europe a more energetic topic for the electorate, has divided opinion across the nation.

Nigel Farage, whether seen as hero or villain, may now have a chance of real political power. To most people, this

services, this will be difficult to achieve.

The IMF among others believe the pound to be overvalued. This would help account for the relative weakness of manufacturing. Being very reliant on trade, profits in manufacturing would be especially hurt by an overvalued pound. But with the economy returning towards full employment, the Bank of England will come under increasing pressure to raise interest rates. This will further push up the pound, particularly against the euro, where quantitative easing is only beginning.

This Catch-22 is indicative of deep structural flaws in the British economy.

It may be that only the government has the resources and the scale to achieve the structural change that Britain needs. This won’t come from a laissez-faire Tory Chancellor. Britain needs a change of government.

is either a disaster or triumph for British politics. As a result, voting for or against UKIP will become a major decision in the next few months. People will become more engaged in politics, critical of the establishment for allowing such a party to emerge as genuine contenders for government and more aware of ideological positions. These features could completely change the political spectrum, as the three main parties will have to adapt , in order to halt UKIP momentum.

When I say a time for change in Britain, I’m not calling for UKIP to gain political power. However, I do have respect for what they are doing. By change, I refer to the effect that the rise of UKIP will have on the political establishment, which tries its utmost to shy away from controversial issues and stick to safe, centrist politics. UKIP will force the dominant parties to rethink where they have gone wrong and how they have lost their tags as true, representative political organizations.

11

THE BULL UK ELECTIONS

Key Talking Points Polls and predictions

Andrew O’Donovan

This election has been called the most unpredictable in memory. The rise to prominence, since the last election, of the UK Independence Party (UKIP) and the Scottish National Party (SNP) means another hung parliament in which no party wins an overall majority is almost inevitable. What is certain is that the result will be a lot closer than it appeared as recently as six months ago. Polls have since narrowed markedly, with Labour now only possessing a one or two point lead over the Conservatives. However, national vote-share does not directly translate into seat-share. And while the electoral system used in the UK tends to bestow a disproportionatelylarge share of seats the greater a party’s vote-share is, the electoral map is skewed such that Labour benefits most. An attempt by the Conservatives to somewhat correct that was stymied by coalition partners the Liberal Democrats, meaning Labour can continue to rely on an advantage that saw them win a proportion of seats an average of twenty percentage points greater than their share of the popular vote in the last three elections they won. The Tories will need to out-poll Labour by upwards of five points if they are to secure more seats than them.

The Liberal Democrats, having long ago been overtaken as the third most popular party, are in danger of falling further. A surge in Green Party support combined with ever worsening polling results, means that the Lib Dems are more unpopular than they’ve been in twenty-five years. Some have forecast that they could lose as many as half of their seats. However, it may be the case that the extent of their likely losses is exaggerated, and that the electoral system they so hate (discussed below) will save some of their blushes. UKIP, less than a year after its commanding victory in European elections, seems to be stalling as voters question whether the party offers anything but opposition to the EU. While it remains more popular than it has ever been – polling about fifteen percent – again, because of the UK’s electoral system, it is unlikely that that will translate into more than a handful of seats.

Electoral system

A situation in which five parties will have more than a negligible share of seats is unprecedented in UK national politics, but seems likely to be the new norm. What does that mean for the first past the post (FPTP) electoral system?

FPTP is the simplest form of election, with all votes being counted and the candidate with the most votes being elected. It works well in two-party elections such as the US presidential race, but gives rise to anomalies in multi-party systems: the Lib Dems polled 19% in Scotland in 2010 and won eleven seats; the Conservatives polled only two points less, yet only won one seat. The principal defence of FPTP is that it delivers stable singleparty government: by advantaging parties that poll highest, different political persuasions are represented by a single party and a situation with multiple, for instance, left wing parties

bargaining for a share of government doesn’t occur. Detractors accuse it of disenfranchising voters and of presenting a significant barrier of entry to new parties. As part of the coalition agreement, the question of electoral reform was put to referendum. The Liberal Democrats, traditionally greatly disadvantaged by FPTP, campaigned for the proportional representation system we have in Ireland. The referendum was defeated by a comfortable majority, with the Conservatives campaigning strongly for FPTP to remain. For a country that hadn’t seen coalition government since the war, two in succession marks a change that is unlikely to be undone. Included in any minority party’s coalition agreement is likely to be requirement to try to bring about electoral change. If the process of forming government is not clean, perhaps the UK electorate, much like Ireland in 1995, will vote in a repeat referendum to divorce themselves from FPTP.

UKIP and SNP

Historically Scotland has been a very successful battle ground for Labour, where they won two-thirds of seats in 2010. But after a close-fought independence referendum that stoked Scottish nationalism, the SNP is expected to as much as triple its number of seats in Westminster from the six it won in 2010. The party’s charge is led by Alex Salmond who resigned as party leader following the defeat of the independence referendum. Salmond intends for the SNP to support what he expects to be a Labour minority government.

Essentially, it seems, he will agree to support the Labour government’s initiatives in England and Wales in exchange for further devolution to Scotland. However, it may come to pass that by taking Labour seats in Scotland, a weakened Labour is not in a position to make such a deal. All of which comes as a welcome surprise to the Conservatives who have had to contend with the increasingly popular UKIP. By competing for Conservative seats and splitting the right wing vote in others, the Tory party has drifted from the centre ground of British politics in a bid to dissuade voter defections and appease particularly right wing MPs. This is largely the reason David Cameron felt the need to promise an in-out referendum on EU membership if the party achieves a majority in the next election; a pledge that dominated the political agenda, it now seems decidedly unlikely. But UKIP, albeit to a much lesser extent, represents a challenge to Labour as well, most noticeably in Wales where they will be contesting outright for Labour seats. Depending on their performances, either or both of the parties could decide the make-up of the next government, possibly by entering into a coalition, but more likely by supporting a minority government, one of which (following an election) has not been since Harold Wilson’s in 1974 which lasted less than a year.

What

would

Labour

reverse?

As most of the likely scenarios following the election involve Labour being in government, it’s worth asking what of the Coalition’s actions they would reverse. The current government, in its reforming phase, increased the maximum level universities could charge students from £3300 to £9000.

Violent student protests resulted and the popularity of Lib Dem leader Nick Clegg, who pledged before the election not to increase student fees, has never since recovered. Despite the current system having received praise from the OECD and other sources for being sustainable and redistributive, Miliband pledges to reduce the maximum to £6000, with some of the funding gap being filled by removing certain tax breaks on pension savings.

Shadow Chancellor Ed Balls, however, will not guarantee that funding to universities will remain as is. Given that Labour strongly opposed the initial increase, it seems an admission of defeat that they are unable or unwilling to return the maximum to the previous level.

One of Ian Duncan Smith’s welfare reforms was what is called the underoccupancy charge – or bedroom tax.

Those in social housing who have one or more spare bedrooms will have a portion of their welfare payment deducted – 14% for the first bedroom; 25% for the second. The charge is designed to encourage those in receipt of social welfare to move to a smaller house so as housing can be better utilised. Though polls suggest that a majority support the idea, those who are opposed to are vehemently so. One reason given is that there is not enough suitable housing to allow those with an extra bedroom to downsize, resulting in many being unfairly punished. Labour describe it in their manifesto as “cruel” and “unfair” and vow to scrap it, paying for it by closing “tax-dodging loopholes.”

Possibly the Conservative’s most controversial reform in government was that of the National Health Service (NHS). Long accused of not being able to be trusted when it came to Britain’s prized NHS, their reforms involved increasing competition within the service and devolving significant powers to local doctors. The bill was hugely complex and hated by doctors.

Many Conservatives seem to brand it the party’s biggest mistake while in office and Labour says it would scrap the plans, saving billions in reorganisation costs.

Leadership changes

For the two big parties, it is a certainty that whichever is not in power after the election will change its leader.

For the whole time that Labour was in opposition, the Conservatives have been following an economic plan of deficit reduction – never particularly popular with voters. Yet under its beleaguered leader, Ed Miliband, the party has failed to inspire even Labour supporters, many of whom still regret that it was not his older, experienced and more charismatic brother, David, who won the Labour leadership contest. What’s more, the party still cannot throw off associations with the economic downturn – even when the party enjoyed a double-digit lead in polls, voters still ranked the Conservatives higher when it came to whom they most trusted to run the economy. Miliband’s ratings show him to be one of the least popular Labour leaders ever. In the event of a Labour loss, he will receive much if not all of the blame. It is not obvious who will replace him. Candidates in the running would include Andy Burnham, Chuka Umunna and Yvette Cooper, all members of the shadow front bench.

A Liverpudlian, a black man and a woman would each, in their own way, represent a change for Labour.

During this government, David Cameron has often seemed to be on the brink of losing control over his diverse party. One man who seems to attract support from all quarters is Boris Johnson who will be returning to Westminster following an effective political holiday as Mayor of London.

He need not even canvas, so certain is his victory in the safe Tory seat of Uxbridge and South Ruislip. If the Conservatives are not members of the next government, Cameron will move – or be moved – on, and all money will be on the man with no ministerial experience to replace him. Home Secretary, Theresa May, could prove his strongest opposition, but a spat she had with influential chief whip Michael Gove may count against her. It would be interesting to see if people are quite so forgiving of the affable but devious Johnson were he to be anointed.

12

THE BULL FINANCE

To sell or not to sell? The Aer Lingus Takeover

To sell or not to sell? The Aer Lingus takeover

Phillip Bane

H

eated debate over the proposed IAG acquisition of Ireland’s national carrier has dragged on for months, and doesn’t seem to be nearing an end anytime soon. While the Aer Lingus board and incoming CEO Stephen Kavanagh have publicly expressed their support for deal, the Government is refusing to play ball.

The Labour party in particular is loath to surrender an asset that is in the ‘national interest’. Compounding this defiance, the unions are worried about the potential job losses arising from any post-merger cost cutting. With the UK Court of Appeal recently rejecting Ryanair’s attempt to protect their 30% stake, many variables are fuelling this takeover controversy.

No one truly knows for sure what the outcome will be. The board has lent its strong support to the IAG approach, citing the “compelling commercial logic” of the €1.4bn deal. Additionally, incoming CEO Stephen Kavanagh argues the deal offers an opportunity for the airline that may never be achieva-

ble on a standalone basis. He believes that there is “limited scope” for extra expansion in Ireland. Since the airline generates chronically low profit margins, and experiences intense competition on both its short and long haul routes, Aer Lingus is reckoned by many to become increasingly vulnerable if IAG’s approach fails. The company’s future growth prospects looks considerably more “sustainable” with strong IAG foundations in place, according to Mr. Kavanagh.

However, the deal continues to be a bone of contention from the Coalition’s perspective. With full board support, we are now in the realms of politics and the national interest rather than profits and share price.

Labour in particular are anxious about the potential fallout from a sale. Along with the trade unions this has formed a deadly combination to refute IAG chief Willie Walsh’s efforts. Hesitancy is stemming from the possible termination of regional routes to Heathrow.

Jobs losses are also a concern, particularly when one examines the election

timetable.

Another contentious issue is the status of Aer Lingus’ control of lucrative slots at Heathrow. The Government are demanding a minimum 10 year guarantee over the Aer Lingus slots.

Mr. Walsh has assured politicians that his interest lies in the airline’s commercial appeal rather than the slots which BA might covet for their long haul potential. Furthermore he has cleverly sweetened the deal by offering the Government a veto over any future sale of these Heathrow slots. He has also indicated his satisfaction with the current state of the Cork-Heathrow and Shannon-Heathrow routes Aer Lingus at currently operates.

We shouldn’t forget about what role Ryanair play in all of this. Competition authorities in the UK have ordered the company to reduce its stake in Aer Lingus to from 30% to just 5%, but the airline doesn’t look likely to sell anytime soon. Ryanair have responded to the IAG offer by saying its board would ‘consider any offer on its merits’, so the fate of the offer very much rests on the

governments’ decision. Interestingly, Aer Lingus’ share price is currently trading far below IAG offering of €2.55 per share, indicating market scepticism about the eventual outcome.

Walsh wants to get all shareholders on his side, preferring to avoid another Ryanair like attempt to gain just a majority shareholding. IAG value Aer Lingus as a profitable niche airline and its key aim is to grow transatlantic passenger traffic out of Dublin. Additionally, 500 plus potential jobs being created within Aer Lingus arising from this strategy, and the Government set to pocket €325m from the sale of its shareholding. It appears to be the best way of turning Dublin into a major European hub, securing increased passenger number and thus jobs via IAG’s international connections.

The alternatives seem to be an ignominious sinking without trace for the airline. Will the Government ever get a better deal?

13

THE BULL FINANCE

Concentration diluting R&D in pharmaceutical industry

O Andrew Corby

ver the past seven years, the healthcare industry has shaken off the post2008 M&A slump with a substantially large volume of deals and attempted deals between global pharmaceutical companies. So much so, that the first three quarters of 2014 enjoyed its strongest nine months of deal making in healthcare since records began in 1980, hitting an unprecedented $368.6bn worth of deals in that short time frame – excluding Pfizer’s failed $116bn takeover of AstraZeneca in early May (a figure not too far adrift of the $174bn spent on M&A in the industry for the whole of 2013). A major contributing factor to this rise may well have been due to the lucrative tax inversion route, a process whereby companies in high corporation tax states would avail of lower tax rates in other member states, subsequently re-domiciling its tax base.

However, with recent interventions from the US Treasury, sealing off this inversion route with near insurmountable obstacles, healthcare continues to top the polls with regards to M&A deals, with Pfizer’s acquisition of Hospira and the recent Valeant Pharma and Salix Pharmaceuticals deal, ranked at one and two

respectively. Bearing this in mind, the continued surge in healthcare takeovers forces the question – are we seeing a decline in innovative research and development spending?

Are leading global pharmaceutical companies satisfied in simply taking that risk-averse mentality and branching out not by means of R&D, but by acquisition?

M&A activity in the pharmaceutical industry is showing no signs of wavering. In the current climate of consolidation, takeover deals are often used as cost-saving measures through the streamlining of operations, which frequently includes the cessation of R&D activity that doesn’t fit in with the larger company’s long-term goals or the early-stage research that is often deemed too risky to endure.

Indeed, operating in the private sector, pharmaceutical companies have the right to pursue takeover deals as a means of satisfying and securing future growth for current shareholders. Business goals must be met, but when at the cost of reduced R&D spending, there remains a risk that companies are stimulating growth not by the development of new medicines and devices, but through the synergies and efficiencies that mergers and acquisitions provide.

Between the years of 2006

and 2008, R&D spending in the pharmaceutical industry increased by over $21bn (equivalent to a 19% rise).

The rate of increase since however has more than halved, at approximately 9% ($12bn). In a 2014 editorial for Forbes, John LaMattina, a former president of global R&D at Pfizer stated, “a consequence of any merger is the inevitable consolidation of two companies”. With consolidation, making the company more efficient, cost cutting is almost inevitable. A prime example can be seen in Pfizer’s takeover of Wyeth. In 2008, R&D investments for the two companies were approximately $12bn. In 2013, Pfizer’s R&D spending floored at $6.55bn, a marked increase in R&D savings post-takeover.

With increased takeovers brings decreased competition, and with decreased competition, why would any leading pharmaceutical company put as much of its resources into R&D? Competition breeds innovation, and although competition remains in certain areas such as AIDS, acquisitions continue to dominate.

Owing to the importance of pipelines and innovation in drug development within the pharmaceutical industry, should regulators not be clamping down on potentially damaging deals leading to the loss of competition?

According to LaMattina ‘traditional regulations are designed to break up unequal monopolies in market share as opposed to preventing clinical research and development but with global pharma companies not at these heights of market share, interventions from regulators aren’t in line with the legislation’.

On a final note, the pharma industry is being lead, by rising trends in healthcare M&A, down a potentially harmful path of widespread consolidation. With consideration of the emergence of new diseases, rising drug resistance levels, and an increasing life expectancy worldwide, innovation with regards to drug development and research is vital for the survival of consumers and should be at the core of pharmaceutical industry practice. On the flip side, perhaps the rising trend in acquisitions could fuel the growing interest from smaller pharmaceutical companies at the prospect of being taken over by these global giants. But with a lack of resources and wealth, this outlook is not often concrete. In brief, traditional global pharmaceutical companies may be drifting from their raison d’être of drug development, in an industry where the balance between profit making and addressing unmet clinical needs is often skewed.

Amazon delivery drones shot down by U.S regulator

A Peter Marshall

mazon Prime Air, Amazon’s conceptual drone-based delivery system currently in its advanced stages of development now faces several obstacles imposed by US regulatory authorities – the Federal Aviation Administration (FAA) and the Department of Transportation. While the FAA proposals were welcomed by many, it is a cause for concern for companies seeking to use drones commercially – namely Amazon but also Google, Domino’s Pizza and Alibaba.

If passed as initially outlined, the proposals could thwart Amazon’s plans to launch the service in the United States.

Under the proposed regulations, drones cannot fly over people not involved in the drone operations, they cannot exceed 100mph, they cannot fly higher than 500ft, they must be operated by a certified individual over the age of seventeen and the most concerning limit on commercial usage is the proposal that the drones must be flown by an observer on the ground who can maintain visual contact with the aircraft. This final proposal arguably defeats the purpose of Amazon Prime Air altogether.

Paul Misener, Amazon Vice President for global policy, noted that such a restrictive regulatory environment simply ‘wouldn’t allow Prime Air to

operate in the United States’.

However, Amazon says it is still committed to delivering products by drone despite these new federal proposals. Amazon has implored the government agency to reconsider its proposals and the detrimental impact they may have on corporations. ‘The FAA needs to begin and expeditiously complete the formal process to address the needs of our business, and ultimately our customers’, said Misener. In addition, several lobbyists including Senator Charles Schumer have also called for more businessfriendly rules and urged the FAA to modify their proposals.

The FAA stressed that the proposals are not final, and that it is seeking input from all interested parties. ‘We have tried to be flexible in writing these rules’, said FAA administrator Michael Huerta. ‘We want to maintain today’s outstanding level of aviation safety without placing an undue regulatory burden on an emerging industry’.

In light of the above and given Amazon’s history of turbulent relationships with Regulatory authorities (for example, Amazon’s fierce reluctance to co-operate with the French government regarding France’s ban on free shipping), the next logical step would be for Amazon to move its research & development

operations outside the US if the FAA does not grant Amazon’s exemption request. Misener went on to further explain: ‘I fear the FAA may be questioning the fundamental benefits of keeping UAS (unmanned aircraft systems) technology innovation in the United States…simply put, Prime Air has great potential to enhance the services we already provide to millions of our customers by providing rapid parcel delivery that will also increase the overall safety and efficiency of the transportation system. Without the ability to test outdoors in the Unites States soon, we will have no choice but to divert even more of our UAS research and development resources abroad’.

There lies a not-so-subtly veiled

threat that the company will move operations abroad if the FAA does not comply with their demands. It would be relatively simple for Amazon to take their operations to other countries abroad which have been more hospitable regarding the use and testing of commercial drones such as; England, Wales, Germany, Australia, China and to a lesser extent – Canada.

Amazon envisions drones as the future of commercial delivery. The technology is one way Amazon can reduce shipping expenses which cost Amazon nearly $4 billion per year. Amazon has demonstrated that they are committed to developing drone technology. The question that remains to be seen is, will the FAA allow it?

14

THE BULL SPORTS’ BUSINESS

The Premier League: Football’s top earner

PJ McGrane

W

ith no rights to Champions League games next season we all knew Sky were going to pull out all the stops in the bidding war with BT over TV rights for Premiership games. What happened was a £5.136 Billion deal which blew BT Sports out of the water.

To put the scale of the deal into perspective that’s roughly £10 million per game before a camera man gets paid, or a pundit or anyone else involved in the broadcasting process. In fact the complete deal involving both BT and Sky is believed to be more than the BBC’s entire corporate budget. The deal reaffirms the Barclay’s Premier League’s Status as the most valuable league in the world.

When the deal was announced those who spoke told us that Sky had won 5 of the 7 packages. What do these 5 packages bring to or TV screens over the next three years.

Sky will keep their traditional Super Sunday Football and Monday Night Football. They have lost their Saturday night games to BT who have in return for this lucrative slot have lost Saturday afternoon games to Sky. Sky have also won the rights to a mix of Bank Holiday games and most interestingly, Friday night games. It will be the first time the BPL will televise games on a Friday Night.

In total the deal for Sky will consist of 126 games a season over the next three seasons in contrast to BT’s 42.

That means 44% of the League’s games will be broadcast live. This is music to the ears of Football fans but the big question; where will all this money go? Clubs will divide 50% of the deal evenly among themselves, 25% will be prize money for the final league position and the final 25% will be a facilities fee for televised matches. Gary Neville and Jamie Carragher have both tweeted their aspirations that clubs put this money towards making controversial ticket prices more affordable, in particular the away game tickets. Neville also claimed he’d love to see the money go back to grassroots football. These are very genuine hopes which every football fan would understand and

agree with. However as a man who never really understood the insanity of the money involved I do fear the worst. This deal works out with about 30 million per season more for clubs.

That’s another 30 million on transfer insanity for clubs. Some clubs will put it towards the facilities but for the big clubs these are already state-ofthe-art, meaning this is more money to fuel the ever expanding wages budget. With this amount of money comes great responsibility to the fans who support their clubs through thick and thin. I would hope that possibly the FA or Premier League would come in and create regulation over how this revenue can be spent. Otherwise we are just going to see more and more benchwarmers earning six figure salaries.

This TV deal is the 3rd Richest in

sports only behind that of the NFL and NBA. With new competitors for the rights such as the Discovery Channel it isn’t surprising that the price was driven so high. This historic deal will make the most popular league of the most popular sport in the world more available to its fans. I suppose this alone is priceless. However it can’t be emphasised enough that this deal is a game changer. The magnitude of this deal has never been seen in football before. It presents phenomenal opportunities and plenty of pitfalls. As someone extremely interested in the workings of the league as well as the football on the pitch I am optimistic that it will benefit the league in a lot of ways. Nevertheless the specifics of how fans will benefit remains to be seen.

Mayweather/Pacquiao: The Biggest Payday in Sport

PJ McGrane

A

fter years of will they won’t they, boxing fans can rejoice that Floyd Mayweather and Manny Pacquiao have finally ironed out a deal to create the biggest fight of a generation. There were genuine fears that it could have become the greatest fight to never happen but thankfully the two fighters have managed to forge a deal.

Since the fight has been announced a lot has been said about it being the biggest purse in boxing history, a feat of indescribable magnitude.

The fight has been 5 years in the making so many ask, what took so long. Yes there were sports related issues such as blood testing.

However the negotiations on the corporate side appear to have been the biggest problem. The fight will be co-promoted by Top Rank and Mayweather promotions. However it is the association of these companies and fighters with two different cable providers HBO (Pacquiao) and Showtime (Mayweather) that has created a lot of difficulties. The two have only ever co-broadcast one fight before and that was between Lennox Lewis and Mike Tyson. That really puts the significance of this

fight into perspective. A phone call between the two fighters in 2012 couldn’t settle the purse. Pacquiao wanted a 50/50 split but Mayweather offered a flat $40 million fee which would have been the biggest pay day of Pacquiao’s career. The two met for the first time in person at a Miami Heat game earlier in the year where they exchanged phone numbers and apparently went back to Pacquiao’s hotel and continued discussions. It is believed this was a pivotal point in the negotiations as the fighters agreed a 60/40 split. The two men were able to find common ground without the bureaucracy of their promoters.

So after the painstaking negotiations what will the fight generate in revenue. Everyone is expecting this fight to break records in every possible way. Despite the fact that the fight will cost around $100 on the box office compared to the standard $50/60 dollars price for a fight it won’t surprise anyone if it smashes the records. 2.5 million PPV buys & $150 million PPV revenue are the current records but with the mainstream appeal of the 2 names involved this is sure to break these records. 4 million buys which is a reasonable estimate by all accounts

would generate around 200 million for the purse after the broadcasters take their cut. The gate revenue is likely to top 40 million. This has been the most inconsistent figure to examine. Some sources are claiming tickets will cost between $1000 and $4000, others are saying it could be between $8000 and $11000. However the most staggering number came from possibly one of the most reliable sources. Sky Sports reported that agencies are selling ringside tickets for around $100,000.

The amazing thing is that these premium prices will not deter anyone.

There is no fight that will generate a comparable level of interest among casual fight fans and general sporting fans for two simple reasons. The fighters involved are the two biggest names in any combat sport and I include MMA when I say that. Also despite both being past their prime they are quite simply the best that the sport has to offer. One must also consider the fact that the fight has been 5 years in the works and this has drawn fans into the on-off-on-off saga which has finally concluded. The story that has built up will make the fight unmissable.

So the multi-million dollar question; how much will the men

earn. Bullish estimates are predicting Mayweather to take home $150 million which would double his current record and Pacquaio to pocket $100 million. However the more consensual estimates expect Mayweather and Pacquiao to earn $120 and $80 million dollars respectively making it undoubtedly the richest fight in history and possibly the biggest payday in sport.

Cynics will say that the two fighters are past their prime and it will be an anti-climactic bout but as a boxing fan I’d like to point out Ali and Frazier were well past their best by their third fight, yet the ‘Thrilla’ in Manila’ is still possibly the most iconic fight in history. With Maywether’s glamour and showmanship, Pacquiao’s honestly and underdog tag, not to mention the skill, excitement and titles that both fighters will bring to Las Vegas; on May 2nd we will witness one of the most iconic fights in the history of the boxing. A fight that will break mind boggling revenue records but more importantly, a fight that will cement the legacies of the two of the greatest fighters ever.

15

THE BULL OPINION

Paul Staines: The man behind the mask

I

Rory O’Donoghue

thought I should make my last article as comment editor of The Bull a little different. With this in mind I set about contacting an individual I have long found fascinating under the guise of wanting to write a newspaper article about them. Rather surprisingly my target, Paul Staines (better known as Guido Faulkes) said that he would be more than happy to accommodate me as his wife went to Trinity. God bless that alumni network.

For those of you that do not know, Paul Staines is the British born, Irish creator of the Guido Fawkes political blog which has been credited with, or accused of, changing the face of political discourse in Britain.

With his fearsome reputation in mind I was quite surprised to find a charming individual responding to my questions at the other end of the phone. I began by asking him what the motivation was behind creating the blog just over a decade ago. It turns out that rather than being a vocation, Mr Staines rather stumbled upon the concept. “It was around the time I was having a dispute with my former backer. I was using this Gulf War forum to post stuff. It wasn’t a very good platform and I always wanted to create a punchier blog.

It was after a while that I decided to create my own.”

This description of the beginnings of the blog led us very organically into discussing where it stands today. No one that has encountered Guido Fawkes can deny that it is punchy. However its second big initial characteristic was being ‘outside’ the Westminster bubble. Could the man who did not want his identity to be revealed during his first TV interview still credibly say that a blog with hundreds of thousands of views, mentions in Prime Minister’s questions, a Sunday Sun newspaper column and a star-studded anniversary bash was outside of the Westminster bubble. Staines was quick to respond. “No I don’t think it is realistic to say that we are still the outsiders we were in the beginning.

We have been somewhat accepted.

However the media in Britain and in Ireland is still a cosy circle. For example, we do not have Westminster lobby accreditation. The lobby refers to journalists that have offices within Parliament and cover Parliament. It leads to a situation where our sketch writer is watching Prime Minister’s questions on TV”.

Intrigued by this idea of the media being a ‘cosy’ community, I ask him what he meant by this. “Well, in Britain and Ireland the media and politics are such a small circle that what begins to happen is a sort of clientele journalism.

The case of the Anglo bondholders, with the Irish Times and politicians saying they’re names couldn’t be revealed just wasn’t true. I knew this because I had traded in the bond markets in the past, so I published them.” Beyond this reputation built up of Staines, I was beginning to see a sort of cause behind his work.

“I’m against this rising level of selfcensorship which has emerged in journalism, particularly after Leveson.

It all goes back to this cosy world of the media and politicians being reliant on each other.” I remind him that at the aforementioned enquiry he stated that “I’m a citizen of a free (Irish) republic and, since 1922, I don’t have to pay attention to what a British judge orders me to do.” I also remind him of one of his most famous stories, namely ‘bringing down’ Gordon Brown’s spin doctor Damian McBride.

Many would see this as a classic example of a sympathetic Tory blog attacking a Labour government and bringing down one of its key figures.

However Staines description of this story is more nuanced. Of course he knew it would bring him extra publicity, and put him on the map in many ways, but there seems to be more to it. “The McBride situation is one where after we published it, so many other journalists came up to us and told us how glad they were

that we did it. Everyone in the lobby knew what he was like, yet none of them were willing to take him on.” I found this a fascinating example of Staines almost on a moral crusade, to take down a perceived wrong while attacking the very cosy nature he hated.

Desperately wanting him to declare himself a Tory I asked about his own personal political allegiance and the forthcoming general election in the United Kingdom. “I’m definitely a libertarian. I know that Harry and Alex who work on the blog are Tories but I would put myself down as a libertarian. I believe in the concept of direct democracy and these sorts of things.” As for the general election, “I do like to bet on politics, but I think this one is too close to call”. It’s the first time Staines has been anywhere near coy during our conversation.

Despite quite proudly saying the “people forget that we have brought down more Tories than Labour” a cursory glance of the Guido Fawkes blog every morning will tell you that he could never be accused of being a Labour supporter. Of course it would be wrong of me to suggest that a blog whose anniversary get together was supported by the Tory Prime Minister and Mayor of London was in any sort of “cosy” situation wouldn’t it?

Nuclear power: A short term solution to climate change?

Callum TrimbleJenkins Editor

A

s documented in our last issue oil prices have been consistently falling largely due to a glut in global supply. With new sources of fossil fuels OPEC are no longer able to control supply and maintain a high price, of particular importance is the Shale reserves which have turned the US from a net consumer into a net producer. Basic economic theory tells us that as price falls consumption will increase. Questions have been raised as to whether this is a welcome development given the effects on the climate.

Although climate change still has its skeptics, very few if any remain among credible scientific circles.

Former President and current UN Special Envoy for Climate Change Mary Robinson is quoted as saying ‘there is a global limit on a safe level of emissions. That means major fossil fuel reserves must be left in the ground.’ An Taisce have set a target of keeping 70/80% of reserves from extraction in an effort to curtail temperature rises to within two degrees of pre-industrial levels.

Even if we take climate change out of the equation (which I believe is a mistake) as with any natural resources fossil fuels are finite. It is only a matter of time before the world’s reserves fall

not just below the 70/80% target but to a level of little or no supply. Thus finding alternative sources of energy will only grow in urgency. It would be my argument that the time to get real is now rather than later. Not only will this secure our ever increasing energy needs but it will also protect the environment from climate change.

There are also a number of political pros for the West reducing our reliance on the supply of fossil fuels from unstable regions of the world. For example the current Ukrainian crisis would arguably look very different if large swathes of Europe were not reliant on Russian natural gas. There is also the question of the resource curse and the correlation between mineral deposits and corruption/ lower levels of development.

So what are the alternatives?

Should we copy OPEC and just restrict the global supply of oil? This is one guaranteed way of lowering consumption and keeping reserves in the ground. The rise in price may also incentivise research into new sources.

Nevertheless I reject this approach as unrealistic and unsustainable for a number of reasons. Firstly it is only delaying the problem and relying on the hope of new research rather than actual alternatives. Secondly it will stunt the growth of emerging

economies, restricting their access to the necessary inputs of production.

If supply is restricted it will still likely be controlled by the West, who are unlikely to accept higher prices and reduce consumption due to the political consequences.

As a result our only viable option for maintaining our current lifestyles and levels of consumption while reducing dependence on fossil fuels is to substitute it for alternative sources. The question is what are these sources? Currently renewable sources account for only 7.2% of Ireland’s energy needs (although there is a target of 45% by 2030).

While the cost of such sources are falling and capacity is increasing this has proved a slow process. Personally I believe that targeting renewable sources as our major if not only source of energy may be admirable but they will prove unrealistic in the real world. Consumers remain inelastically attached to oil and as such appear unwilling to substitute it.

There is one energy source that has become much maligned in recent years, which is understandable after what happened in Fukushima.

Nonetheless Nuclear power in the last 20/30 years is estimated to have saved emissions worth the same amount as Germany and Japan

combined. Accordingly it must be taken seriously as a solution to our energy needs. While there are environmental costs these are significantly less than for fossil fuels and accordingly nuclear power could provide a temporary solution while other renewable source reach full capacity. To illustrate my point look at Germany after they closed eight reactors as a response to Fukushima.

The lost output was not replaced by wind, solar or any other renewable sources, instead consumption of natural gas from Russia increased.

This was an irrational response as none of the environmental effects that caused Fukushima are likely to occur in Germany!

Nuclear power is not completely safe, but it is getting safer. Fukushima was cause by human error in its usage in such an environmentally unstable region of the world. This however does mean this is very much only an option for the developed world, the US and Continental Europe.

Consequentially this is a short term solution (and by short term I mean at least a generation to justify the costs) to climate change, but should be pursued nonetheless to give renewable energy the time to increase capacity to a level which will meet all our needs.

16

THE BULL OPINION

No laughing matter: Political satire’s growing importance

S Tom Kelly

oon after Jon Stewart began his tenure at The Daily Show in 1999, the world changed.

George W. Bush moved into the White House, quickly followed by 9/11. The War on Terror and global economic meltdown invariably charged the political landscape beyond recognition. Meanwhile, the internet transformed the way these developments reached the world, with Twitter, YouTube and the viral video becoming ubiquitous. In the decade that followed, Stewart, now the widely acknowledged heavyweight of U.S Political satire, and his peers became the best in the world at quickly disseminating the constant news stream borne of these geo-political and social developments, transforming subject matter into sharp, relevant satire.

As Stewart prepares to leave the show, the brand of comedy he built is stronger and more influential than ever. Stephen Colbert and Bill Maher continue to provoke pundits and politicians alike, while John Oliver’s Last Week Tonight celebrates a wildly popular debut year, the Englishman weighing in on topics such as judicial reform and immigration in the course of making millions laugh. Despite that Stewart is yet to announce whether this departure means retirement or not, the genre seems in rude health with or without his considerable talent.

Why does any of this matter? It’s satire, after all. However, if Chris Smith of the New York magazine is to be believed, Stewart is the ‘most trusted man in America’, with a viewership of almost 2 million per night. Stewart’s Daily Show, along with The Colbert Report and Last Week Tonight, hold an increasing influence over political culture and public perceptions, most notably amongst the muchvaunted ‘millennial’ demographic.

Parodies, satirical segments, and appearances by political figures are the subject of conversations, news stories, and most importantly, are among the most viewed, forwarded and recommended content online.

It is little wonder that the Obama administrations’ social media team has become one of the most central strategic assets at the President’s disposal.

Yet what exactly does this new genre of political entertainment mean for politics? Why do political figures risk ridicule by appearing on the Daily Show? How does parody and satire influence the agenda and framing of news coverage and political discourse? Are these programs a distraction to audiences or a resource for critical analysis

and political education amongst traditionally apolitical demographic groups?

Appearances on late-night comedy programs have become an essential part of political strategy. Politicians have accepted the reality of the current media environment, reaching out to audiences by appearing as interview guests on entertainment talk shows – Obama’s 2012 interview with Stewart was pointed to by many as a pivotal moment in that year’s election. Political satire has taken on increased importance as a source of voter information, especially for younger voter demographics. A 2009 Rasmussen poll indicated that nearly one-third of Americans under the age of 40 say satirical news-oriented television programs such as The Daily Show are taking the place of traditional news outlets such as CNN or Fox News. Further research shows that among ‘millennial’ voters, satire news was more popular, as well as more trusted.

What may have began as an ordinary satirical reaction to an often- absurd political environment has evolved to become one of the strongest forces in ‘P.R Wars’ waged across the nation every four years.

For instance, Tina Fey’s impersonation of Sarah Palin, albeit a caricature, put in stark terms her political incapacity and was pointed to by many as a definite factor in derailing the 2008 Republican campaign. Liberal comedians such as Rob Delaney

and Zach Braff were widely credited with generating large amounts of positive sentiment for Obama’s 2012 campaign through well-timed satirical skewering of Republican candidate Mitt Romney over Twitter and Facebook.

Are these trends worrying? Satire’s opponents argue that it couldn’t possibly teach voters how to respect core political and national values. If anything, according to the reasoning of several commentators, satire’s popularity is a sign of the public’s waning respect for Washington.

However, studies have shown that viewers of programs such as The Daily Show score higher when tested on current affairs than viewers of more conservative programming or traditional news networks.

Satire news helps to educate and inform the electorate, especially in a media environment that emphasises quantity over quality in terms of objective information. Moreover, a 21st Century voter exercises total control in what media they consume; if framing political discourse in humorous and entertaining ways is what it takes to entice viewers to watch what has classically been ‘boring’ television, surely the ends must justify the means. While political satire may be a ‘dumbeddown’ iteration of traditional political discourse, the objective remains the same; to inform, to incite, and to inspire.

Satirists shoulder a

disproportionate amount of blame for the state of political journalism.

Satire merely emphasises flaws in the media, national institutions and the politicians who run them.

Satire requires the audience to think critically and remain intellectually curious, whilst traditional forms of media propagate passivity. In this way, satirists such as Stewart function as a check on mainstream political opinions, a devil’s advocate of the U.S Political arena.

This is why the increased importance of satire in the American political arena is a positive development rather than symptomatic of a nation in decline. Stewart, and those like him, has come to be trusted by the public in providing them with information from which to make educated decisions that ultimately shape the state of the nation and the wider world. Regardless of the source, political satire keeps voters on their toes, abreast of political developments, and most importantly, highlights abuses of power and institutional bureaucratic fallacies endemic in political systems in the U.S and abroad. Satire’s goal is not to undermine the systems it comments on, nor is it to be merely incendiary.

Satire’s goal is to encourage citizens to cast a critical eye over the flaws in the system, and to exercise their rights in order to change it – a development that should be encouraged, applauded and protected.

17

THE BULL OPINION

Was it a defeat?

L William Foley

ate on Monday the 23rd of February, following a gruelling and tumultuous weekend of negotiations, the new Greek finance minister, Yanis Varoufakis, sent a six-page list of economic reforms which Greece would have to meet in return for a 4-month extension of the bailout programme.

There is a great deal of uncertainty about what these reforms will actually entail but it seems fairly certain that they involve quite a significant dilution of Syriza’s programme for government, which involved achieving a massive write-down on debt and implementing a programme which included an immediate €4bn increase of public spending, gradually restoring salaries and pensions, an reversing cuts to the welfare state.

According to the agreed terms, the new Greek government will commit to running a primary surplus though again there is ambiguity over its size.

So for now, Syriza has committed to recognise the entire debt and run a non-negligible primary surplus.

Nevertheless, the outcome of the negotiation has been paraded by Tsipras (the new PM) and Varoufakis as a success. Furthermore, despite significant rumblings of discontent from within Syriza’s left wing, and open jeering from the proausterity opposition, the general population seems, to some degree, share its government’s opinion on the negotiations. According to a Macropolis poll for Parapolitika weekly, 76% have a positive view of the government so far and 68% were satisfied with how the government negotiated. Furthermore, Syriza’s approval ratings lie at 42%, up from the 36% of the popular vote which they won in January’s elections.

Nevertheless, the political situation is very fluid and there is no denying that in a formal sense the terms that have been agreed are, at the very least, a major retreat for Syriza. In a series of articles published recently in Jacobin (a popular American socialist magazine), Stathis Kouvelakis - a member of Syriza’s central committee who teaches political theory at King’s College, London served up a stringent critique of his party leadership. Kouvelakis wrote that the agreement “entails another set of measures aimed at tying the hands of the government and thwarting any measure that might signify a break with memorandum policies.” The Troika effectively retain their previous role - except that they are now referred to under a different term. The Greek government will fully honour its debt - no “haircuts.”

Future debt relief will only happen on the basis of interest rate reductions and rescheduling “ which as is well-known makes little difference to the burden of servicing debt, affecting only payment of interest that is already very low.” Kouvelakis’ conclusion is damning: “the heart of the memorandum heist, namely the accomplishment of outrageous primary surpluses and the selling-off of public property for the exclusive purpose of lining lenders’ pockets, remains intact.”

This is not the only criticism that Tsipras and Varoufakis have faced from the left wing of their own party.

The negotiations have been strongly condemned by prominent figures such as Costas Lapavitsas, professor of economics at SOAS London and an influential Syriza MP, John Milios, professor of political economy at the National Technical University Athens and Syriza’s chief economist, and Manolis Glezos, a writer and resistance fighter in World War 2 who famously scaled the acropolis in Athens and tore down the Swastika flag. The nonagenarian Glezos went as far as to apologise “to the Greek people for having assisted in this illusion.” The Greek communist party (the KKE), who refused to go into government with Syriza following the recent election, have been even more trenchant in their criticism, and have already held a protest against the new government.

However, the left should not be dogmatic in its criticism of Syriza. They are, for sure, “in the last analysis” a reformist party. However, they should not be written off as if they are identical to, say the Irish or British Labour parties. The former is not much more than a perennial mudguard for their right wing coalition partners, and the latter jettisoned any vestiges of working class politics under the insipid and morally decrepit Tony Blair (now being paid millions of pounds a year by the autocratic Kazakhstani president to advise him on, amongst other things, the shooting dead by security services of 14 striking oil workers). Both the political context, and the nature of Syriza make it a radically different organisation, one deserving of (critical) support.

For starters, Syriza is not an institutionalised political party with a decades-long history of selling out. It is a new force, in fact a coalition of various smaller radical left parties. Its ranks are not stuffed with career politicians ossified into long standing practices of political hypocrisy. Tsipras who is only forty years old, is a former student activist and civil engineer by profession who

only became an MP 6 years ago. The coalition is full of academics - such as the above-mentioned Lapavitsas, Kouvelakis, and Melios - who have spent most of their lives developing left wing and even Marxist political and economic theory. Varoufakis himself is a professor of economics, and described himself in a longform Guardian article as an “erratic Marxist.” Lapavitsas describes Syriza’s programme as “a Keynesian program with redistribution attached, with some Marxist view of the world.”

Joan Burton it aint. Syriza is also an organisation of activists, containing both veterans such as the famous Glezos, and younger ones activated since the crisis. Meanwhile, the political context is also much more desperate in Greece. The situation there has been aptly described by Tsipras as a “humanitarian crisis. “ According to a report by the Kathimerini newspaper, in 2013 nearly half of Greek incomes are below the poverty line, “measured as 60 percent of the price-adjusted average income in 2009.” The expansion of the murderous neonazi party Golden Dawn and their support amongst the police force should also not be underestimated.

There is thus justifiable excitement at the prospect of a new force with a genuinely idealistic leadership coming to power in one of Europe’s most downtrodden countries. As such, we should not be overly surprised at the outcome of the negotiations. Syriza after all is led by relative political novices. The talks were conducted throughout with a gun held to Greece’s head, and they were outnumbered 18 to 1 in Eurogroup negotiations.

For now it should be accepted that the extension has bought time. Meanwhile the “constructive ambiguity” (to use Varoufakis’ term) may well allow for some not insignificant humanitarian relief measures.

Nevertheless, if Syriza is to implement its programme it will face a long and unpredictable struggle. Because of their position the leadership will face enormous pressures to succumb to “the logic of power” and accept, in essence, the worldview of the European ruling class: that debt must be repaid at all costs, that austerity is necessary etc. It is vital that Syriza maintain, and cultivate, its links with the Greek working class and population at large rather than come to see them as the European elite does: as a political obstacle to be placated and subdued. The first step here is to be ruthlessly honest and not to dress up defeats as victories. The reality

is that Syriza will probably not be able to deliver its programme and also stay within the Euro. However, according to the Macropolis poll cited above, over 80% of Greeks wish to stay within the Euro. An open dialogue needs to take place between the Syriza leadership and its supporters at large on this subject and in general. More importantly, the social struggle in Greece has become even more critical. Left wing groups and the workers’ movement need to mobilise in a spirit of critical support. It is ultimately them who will keep Syriza honest. As seen by the example of Chavez in Venezuela, the masses often have a much more optimistic view of what is possible than their leadership - as evidenced by how Chavez, when he thought the game was up, was saved from a 2002 coup attempt by mass mobilisation of workers and peasants.

The Greek government must insist that the position of Merkel, Dijsselbloem (the head of the Eurogroup finance ministers) et al is not one of simple economic pragmatism but actually highly ideologically motivated. Ultimately the questions of default, austerity, and stimulus are questions of distribution. It is a particular set of political values that holds that all debts should be repaid in full, at any cost. It is also a particularly miserable, repulsive, and deeply harmful set of political values. The marxist academics of Syriza should put their theory into practice and recognise that these are the values of the capitalist class, not the broad majority of society. Meanwhile, the ordinary Greece workers, unemployed, and poor should continue their struggle in recognition that they have a vast number set of natural allies amongst the working class of Europe in general. The left should be ruthlessly critical of Syriza when necessary while also supporting it where necessary as a new and progressive force in Greek and European politics. For now, we can remain hopeful that a new set of political possibilities has opened up. In an (admittedly somewhat overwritten and turgid) early piece of writing, Trotsky confronts a personification of the twentieth as a sort of imaginary interlocutor: “– Surrender, you pathetic dreamer.

Here I am, your long awaited twentieth century, your ‘future.’ – No, replies the unhumbled optimist: You, you are only the present.”

Reformulated in a more prosaic way, this is a good slogan going forward into an uncertain future for Greece and for Europe.

18

THE BULL OPINION

The Universal Basic Income: Utopian fantasy or future reality?

E Sabrina Schönfeld

ight million golden coins, dumped from a truck in a spectacular stunt just minutes earlier, were glittering in the sun outside the national parliament in Bern, Switzerland, on 17th December 2013. A few weeks earlier, in early October, members of the Basic Income Initiative had submitted 126,000 signatures supporting the idea of a universal basic income (UBI) in the form of a monthly payment worth approximately 2,300 Euro (2,500 Swiss Franc), payable to all legal residents, regardless of their employment status, and thereby triggered a referendum on this issue.

Economists and activists all around the world rejoiced as the idea of an unconditional income payment gained more global prominence, yet again.

From Thomas More’s Utopia, published in 1516, over Thomas Paine’s “citizen’s dividend” in 1797, to Milton Friedman’s negative income tax, proposed in the 1980s, the notion of an income, independent of welfare status and provided by the state, has occupied the minds of many scholars for centuries.

However, the fact that there is nothing novel about the concept of paying citizens of a country a set amount of money that allows them to make decisions independent of

work-related income about the type of occupation they wish to pursue, the trade-off between labour and leisure, and their education level, does not make the idea less attractive, especially in the context of the current precarious world economy.

One main advantage of the global UBI movement is that it appeals to both sides of the political and economic spectrum. While the left wing of many countries enthusiastically supports the idea as it effectively eradicates poverty, consequently leading to a more equal society, supporters of the right identify an opportunity to shrink inflated bureaucracies and significantly cut the expenditures required to fund them.

Moreover, many economists have begun to see a basic income as a complementary tool, helping to ease the transition to an economic model capable of fully reaping the benefits of automation and technological advances. The reality that these benefits would significantly reduce the need for labour, while any transition to a “knowledge economy” will hardly help to curb the impact, is one that constitutes a major problem for policy makers already facing on-going social unrest in the western economies plagued by

stagnant growth and persistent high unemployment.

For instance, experts of the McKinsey Global Institute warn that up to 140 million knowledge workers are in danger of becoming redundant, predicting that technological progress in the next two decades “will allow teachers, engineers, medical professionals, lawyers, financiers, administrators, and managers to partly delegate their duties to computing devices.

However, in some cases, it can lead to complete replacement by computers.” Given these prospects, a strong interest group consisting of scholars, politicians, activists, and entrepreneurs, might make this seemingly utopian undertaking more likely than one would initially assume.

But how could this project be financed? Advocates have repeatedly argued that the numbers will add up.

They point to direct expenditures that would become redundant such as welfare, unemployment and pension payments, as well as the high administrative costs associated with them. Moreover, activists point to a broader tax base as every workrelated income would be taxed.

Furthermore, they assert that a UBI will result in reductions in healthcare and criminal justice

spending, due to the expected decline in poverty-related issues affecting these sectors. However, given that these measures will have a considerably lagged impact, it will be hard to avoid substantial increases in government expenditure before these indirect effects kick in.

The common worry remains though that this “manna from heaven” will lead to a sudden drop in labour supply, as economic theory predicts that the income effect will lead people to work less given a permanent increase in their income. Various studies have found, however, that at least in the short and medium run, this does not seem to be the case.

With all this in mind, it is not hard to see why the UIP movement is rapidly gaining momentum in the developed countries. Proponents now include parties in many European countries, and just last week, Greek’s finance minister Yanis Varoufakis has raised the issue in a letter to the troika. So while the idea of an unconditional basic income may have started in Utopia, the timing may be better than ever before to make it a feasible option for policy makers.

Titeann an Tuaisceart i gcás Gaeilge

D Le Dónal Ring agus Brendán Ó Rúnaidh

éantar an-chuid gearáin faoin mbealach ina mbíonn an Dáil ag deileáil leis an Ghaeilge, teanga oifigiúl agus dúchasach na hÉireann. Cé go bhfuil an líon daoine atá líofa sa teanga tar éis ardú 7.1% idir 2005 agus 2011, tá an infheistíocht a déantar ann ag laghdú go mór, cuireadh fear nach raibh mórán suim sa Ghaeilge aige mar Aire na Gaeltachta i rith an tsamhraidh – agus i mí Feabhra 2014, d’eirigh an Coimisinéir Teanga as a phost toisc nár cheap sé go raibh an Rialtas ag tabhairt airde lena chuid moltaí. Ach cé go bhfuil cearta teanga in anchaoi i bPoblacht na hÉireann, tá cúrsaí i bhfad níos deacra dóibh súid ar an táobh eile den teorainn.

Tá beagáinín níos lú na 4% den daonra i dTuaisceart na hÉireann líofa sa Ghaeilge, ‘sé sin líon níos lú ná an fán gcéad sa Deisceart, ach roinnt mhaith den daonra pé scéal é. Faraor, ní dhéannan an Rialtas ionadaíocht ar an mionlach seo. Má tá tú ag iarraidh Gaeilge a labhairt ag an Tionól, caithfear d’aistriúcháin féin a dhéanamh agus ní thugtar ach leath an méad ama cainte duit. Cé go bhfuil tú in ann roinnt comharthaí boithre le Gaeilge a fheiceáil, is annamh an rud é - níl aon iachall logainmneacha a bheith dátheangach orthu go dleathúil, mar atá sa Dheisceart.

Níos measa fós, tá cosc ar Ghaeilge a labhairt sna cúirteanna, de réir an Administration of Justice Act a fhoil-

síodh sa bhliain 1737 agus atá fós i bhfeidhm.

Chun feabhas a chur ar chursaí, tá Acht Gaeilge nua molta ag Carál Ní Chuilín, an tAire Cultúrtha. Ar dtús báire, tá réiteach ar na fadhbanna thuasluaite san Acht – asghair don Acht 1737, mar aon le riachtanaisí go mbeidh an gnó sa Tionól déanta as Gaeilge agus as Béarla, agus coinníoll a dearfaidh go gcaithfear comharthaí boithre a bheith dátheangach. Anuas ar sin, tá moladh ann go dtugtar aitheantas do réigiún áirithe mar cheantair Ghaeltachta, go dtabharfar post do dhuine mar Choimisinéir Teanga atá le hoibriú le gach comhlacht atá bhainteach leis an Stáit agus ag cinntiú go ndeanann siad iarracht an teanga a chur chun cinn. Tá roinnt moltaí eile, mar shampla ceart oideachais ar ardchaighdeán a fháil trí Ghaeilge má tá sé ag teastáil.

Ní feidir a shéanadh gur maith an rud é go bhfuil Acht molta ann. Gné dearfach atá ann ná nach bhfuil gá gach cáipéis atá ann as Béarla a aistriú – cur amú airgid a mbeadh ann, ó chúis nach léann morán daoine an reachtaíocht seo fiú as Béarla. Ach tá roinnt fadhbanna ag baint leis chomh maith. Sa Deisceart tá roinnt limistéir mhóra ann a aithnítear mar cheantracha Gaeltachta, áiteanna nach mbíonn scoileanna Béarla ann, agus ina mbíonn Béarla mar dara teanga ag chuile páiste sa cheantar.

Cé go bhfuil áiteanna cosúil sa Tuais-

ceart, níl an stadás céanna acu, agus tá formhór na gceantar Gaeltachta níos lú agus scaipithe in áiteanna éagsúla. Ina theannta sin tá teorainn na gceantar Gaeltachta ar fud na tíre ag athrú de shíor, toisc go mbíonn daoine gan Gaeilge ag bogadh isteach ann agus daoine óga le Gaeilge ag bogadh chuig na phríomhcathracha. Seans go gcruthódh sé fadhbanna dá leagadh teorainn amach ar cheantair áirithe agus iad a aithint mar “Ghaeltacht” .

Is é an dúshlán is mó don Acht ná na hAontachtoírí atá ina choinne.

Ar dtús báire, deirtear go bhfuil an méid atá molta mí-realaíoch agus éagórach. Dar le Jim Allister, ceannaire an TUV, tá na pleannana “aggressive” agus gurb é an aidhm atá ag Uí Chúilín ná “to antagonise unionists”. Dúirt Gregory Campbell, MP leis an DUP, “Sinn Féin knows this is going nowhere”, ag tabhairt le tuiscint gur straitéis siniciúil é chun Gaelgeoirí a mhealladh. Easaointaíonn Ní Chuilín le na hargóintí seo, a dúirt “it will not in any way threaten or displace the English Language, but sit alongside it as a living and vibrant language”. De bharr ar an gcoimhlint starúil sa cheantar tá sé riachtanach aitheantas agus meas a thabhairt ar an gné seo den chultúr, agus le heaspa reachtaíocht ar an t-ábhar tá sé i bhfad níos deacra é a chur chun cinn.

Deireann roinn 7(3) den Good Friday Agreement go gcaithfear “promote respect, tolerance and understand-

ing of the language”, agus aontaíodh go dtogfaí “resolute action to promote the Irish language”. Ach ag an bpointe seo tá an chuma ar an scéal go ndeanfaidh an tAcht damáiste don ngaol idir an DUP agus Sinn Féin, agus dar leis an tráchtaire polaiticiúil Alex Keane, ní dheanfaidh aitheantas do cheantair Gaeltachta agus logainmneacha ach níos mó béime a chur ar difríochtaí idir eatarthu.

Tá an príomh-argóint atá ann in aghaidh na moltaí, áfach, ag baint leis na hiarmhairtí eacnamaíochta de. Tá seans ann go mbeadh an costas iomláin ar bhreis agus deich milliún – i lár an culú eacnamaíochta, is suim ollmhór airgid atá ann, agus impíonn Allister gan glacadh leis an Acht ar an mbonn sin. Tá sé deacair argóint a dheanamh gur chóir an meid sin airgead a chaitheamh ar teanga a labhraíonn níos lú ná 4% den daonra nuair atá an tír ag fulaignt as fadhbanna leis an gcóras sláinte, oideachas, agus tithíochta.

Dhiúltaigh Ní Chuilín a rá cé mhéad a chosnóidh sé an tAcht a chur i bhfeidhm.

Gheall Rialtas na Breataine an tAcht dos na daoine, agus chuir an Northern Irish Act (St Andrews) i 2006 dualgas ar an Rialtas i Stormont é a dheanamh. Ach fós deich bliain i ndiaidh gur gealladh na hathraithe, níl a leithéad de Acht ann go fóill, agus ar an drochuair is cosúil nach éireoidh leis an iarracht seo.

19

THE BULL EDITORIAL

Editorial: Why Ireland should be terrified of a Brexit

Callum TrimbleJenkins Editor

T

he most recent YouGov/ Sunday Times polls show that the Conservatives and Labour are statistically tied as we approach Britain’s May General Election. Although most other polls have shown a consistent Labour lead their leader Ed Miliband’s personal approval is rock bottom and momentum appears to have shifted towards the Tories. With David Cameron’s continued premiership an increasingly real prospect we must look at the consequences of a promise which is a cornerstone for his re-election campaign. To protect his flank from the rise of UKIP the Prime Minister has guaranteed an in/out referendum of membership of the EU by 2017.

The consequences of a British exit, or Brexit would be disastrous not just for the UK but also for those left behind in a weakened EU. Ireland as Britain’s closing trading partner would be particularly vulnerable.

Over a €1bn is traded between Europe’s two atlantic countries every week. Indeed Britain exports more to Ireland than to the emerging markets of China, Brazil and India combined.

Ireland joined the EU’s predecessor the EEC hand in hand with the UK in 1973 and influential economist Colm McCarthy suggested Ireland should not rule out following them if they exit. While an Irexit is unlikely given Ireland’s commitment to the Euro, a divorce between two such highly integrated economies would be painful.

The Irish financial service industry which acts as a satellite to the City of London is particularly fearful of a Brexit. Financiers on both sides of the Irish sea are concerned that the EU would seek to replace London with Paris or Frankfurt as the centre of banking in Europe. To do this the EU would likely impose stiff restrictions on City institutions operations in the EU, reducing their competitiveness.

An unintended result would be a severing of City links to it highly dependent feeder market in Dublin.

Nevertheless there is a more pressing concern than the banking industry. Both Ireland and Britain only share one land border and that is with each other. Optimists suggest that Britain and Ireland could simply continue the present arrangement outside the guise of the EU, this thinking is overly hopeful.

An open, porous border would be unmanageable given the freedom of movement within the EU which the UK would no longer be a party to. It would also leave open the possibility of cross-border smuggling in attempts to avoid any UK-EU tariffs that could be imposed. Consequently the border would have have to be a so-called ‘hard border’ of passport and customs controls.

Any hope of avoiding a hard border would depend on the deal struck between the EU and the exiting UK. Prominent eurosceptic and current Mayor of London Boris Johnson has pointed to the possibility of Britain following Switzerland’s example in striking a bilateral agreement with the EU. This would give them certain access to EU markets without the regulatory control. Nevertheless there is no guarantee this will even be on the table. Given the growth in euroscepticism across the continent, federalists will want to punish a Brexit as a warning to their own anti-EU movements. As a result they are likely to push for maximum restrictions on the movement of British goods and people to the Union. Aiming to ensure the UK cannot benefit economically from access to the EU market without paying the costs of membership.

Thus the land frontier between the two markets would have to be secured. The consequence would be the border controls described above.

On top of ending British access to the Single Market a ‘hard border’ would also end any possibility of a common market between both parts of the island of Ireland. Trade would dramatically decline. The end of the free movement of people between the two countries would also stop

cross-border job mobility. On a personal note, the ease of crossing the border for university as I have done would probably cease with increased fees.

As the British security forces learnt during the Troubles the Northern Irish border is difficult to maintain. Under this potential scenario it would be Ireland’s responsibility to secure this new frontier of the EU.. This would carry a hefty political and monetary cost to the Irish Government of the day. Firstly enforcing the partition of the island would prove hugely unpopular in traditional republican circles. Secondly it would place massive strain on the Irish budget and would more than likely require a large subsidy from Brussels to sustain.

Which in turn would lead to greater interference in Irish affair which would again prove unpopular.

The importance of the EEC and then the EU in solving the conflict in Northern Ireland should not be overlooked. The bonds formed as part of the UK and Ireland’s joint bid to enter the EEC heralded a new era of cooperation that sowed the seeds of for the peace process. European investment in Northern Ireland has also made up a considerable part of the peace dividend, which would of course cease if the Brexit was to occur. Consequently the stability people on both sides of the border have enjoyed since 1998 would be placed in jeopardy.

As well as direct effects economic and otherwise Ireland would suffer from the inescapable decline in EU global influence the Brexit would cause. The first EU foreign policy chief was not British by accident. The choice of Catherine Ashton sought to exploit the UK’s clout on the world stage and by all accounts it was a highly successful one. Without Britain the EU would lose one of its two permanent seats on the UN Security Council as well as links to the Commonwealth of Nations and its emerging markets such as India.

Although Ireland has always had a bilateral relationship with the US it is nothing compared to the ‘Special relationship’ that Britain has enjoyed with the world’s only remaining superpower. Since World War Two London has been Washington’s most steadfast ally. The US has warned the UK that their relationship would diminish without its position in Europe. However a Britain outside the EU would have to attach itself even more closely with the US to maintain any global influence. That on top of the close cultural links between the two countries makes it unthinkable that France or Germany could replace the UK as the US’ predominant European ally. As a result the EU’s access to and influence in Washington would suffer, thus reducing its weight on the international stage.

The current crisis in the Ukraine would look considerably different without British involvement in the EU. The UK has acted as a counterweight to German hesitancy, stiffening the

EU’s resolve. The reputation and strength of its military also adds much needed credibility to the EU’s Common Defence and Security arrangements. With Germany not pulling its weight in this area a Brexit would leave France as the only serious military power in the EU. Suddenly EU membership would no longer be as attractive to former Russian satellites reducing their incentive to introduce and maintain democratic reforms.

The Common Market’s position in international trade negotiations would also deteriorate with the loss of its third most powerful economy.

No longer able to offer access to the lucrative British markets the rest of Europe ability to obtain concessions and favourable deals would be considerably less. Ireland’s own advantageous position as entry to both UK and Eurozone markets would also be at an end.

Ireland would also suffer as a result of the dramatic realignment in the EU’s balance of power which would inevitably follow a British withdrawal. The traditional axis of UKFrance-Germany would be broken.

Any bilateral agreements between France and Germany would be difficult to oppose given the size of their economies and contributions to the EU relative to the likes of Ireland.

Ireland’s voice within the restructured EU would be considerably diminished with the loss of whom Minister for Justice Frances Fitzgerald called their ‘closest friend and ally’ in Europe. Although Ireland integrated to a greater extent through the adoption of the Euro they did so for economic reasons. It is through this prism that both countries have viewed the EU, rather than through idealistic lenses found elsewhere on the continent. Ireland and the UK have consistently both advocated the free market and pro-trade aspects of European integration. As such a Brexit could pave the way for an increase in state protectionism and a retreat from continent wide competitive markets. This is clearly not in the interest of a country such as Ireland who must trade to maintain its high level of development.

As it stands English, along with German and French are the working languages of the EU. This is advantageous for Ireland who can provide a ready supply of native speakers to Brussels, thus providing important sources of influence in the institutions of the EU. A Brexit would change this, no longer would there be a premium on English speakers and as a result Irish presence at the heart of decision-making would wane.

While none of this will matter to the British people if they are asked to decide on their future in Europe come 2017, there can be no doubt what outcome Ireland will be hoping for.

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