Global News Journal
Beyond the World news headlines
from Reuters Investigates:
By Rebekah Kebede
You wouldn't think you'd have to make hotel reservations months ahead of time in Karratha, a small, dusty town on the edge of the Outback a 16-hour drive from Perth, the nearest city. But with Australia’s commodities boom, Karratha is bursting at the seams and nowhere is it more apparent than when trying to find a place to stay.
(Above photo: A kangaroo stands atop iron ore rocks outside the remote outback town of Karattha in Western Australia. Reuters/Daniel Munoz)
About two weeks ahead of my trip up to Karratha, to do a special report on Australia's hunt for foreign labour, all hotel rooms within a 60-km radius were fully booked and after more than 20 calls, the travel agent was still coming up empty.
A few more desperate calls turned up a couple of rooms in a town called Roebourne, about 30 minutes away from Karratha at the Ieramugadu Inn, an old motel, which like many others in the area, had become worker accommodations as Karratha struggles to house the influx of labour into town. The bill came to over $200 a night—just shy of what it costs to book a room with a view of the Opera House in Sydney. The amenities at the Ieramugadu were somewhat different: a complimentary can of bug repellent, tin-foil covered windows to keep out the light for those on night shift, and a view of a truck parking lot through a hole in the tin foil.
Every time I write a story on European countries cutting public spending, I feel a frisson of panic. I can’t help but fear my health, lifestyle and liberty could be a casualty of the “age of austerity”.
On assignment covering the Sri Lankan civil war for Reuters four years ago, I broke my neck in a minibus smash. It left me quadriplegic, almost entirely paralysed from the shoulders down and totally dependent on 24 hour care. I was 25.
Irish literature and legend is full of boasts, like the claim by Christy Mahon in Synge’s “Playboy of the Western World” that he has killed his da with a loy (Irish for spade), only to have the old man track him down in another town.
Perhaps that’s the way to view Irish Finance Minister Brian Lenihan’s announcement two years ago that the state-backed guarantee scheme to rescue the country’s troubled banks, hit hard by the collapse of the property market, was “the cheapest bailout in the world so far”.
It seemed too good to be true. And it was.
On Thursday, Lenihan, who has spent the last two years scrambling from one fiscal crisis to another, announced that, actually, the cost for cleaning up years of reckless lending was “horrendous” and in a worst-case scenario the price tag would be over 50 billion euros ($68 billion).
The bill will shackle Ireland, once the EU’s fastest growing economy, with a public debt burden of nearly 99 percent of gross domestic product.
Ireland’s now crippled economy, meanwhile, has done everything but recover. Unemployment is stubbornly high, property prices remain depressed, taxpayers face years of cutbacks and, in the second quarter, growth again went into reverse.
Maybe what Lenihan said two years ago was wishful thinking, or perhaps it has taken this long for Ireland to wake up to just how colossal a hole its one-time high flying property tycoons have dug for themselves, and for every Irish taxpayer, even though much of what they were up to is so big as to be unmissable.
Take, for example, the Battersea Power Station in London, which is Europe’s largest brick building and has been derelict since it was decommissioned as a coal-burning power plant about a quarter century ago.
In 2006, a firm controlled by two Irish property magnates, Johnny Ronan and Richard Barrett, bought the building and land surrounding it for a staggering 400 million pounds ($750 million) — even though previous plans to develop it had all come to nought.
The boys, as they are referred to in some of the Irish press, had ambitious plans for a new, exclusive, “Knightsbridge”-class development for office, commercial and residential space, including an extension of the Northern Line branch of the London Underground.
Four years later, the site is still derelict, promoted, perhaps a bit desperately, as a location for lavish weddings held inside a marquee, and most recently as the venue for a Red Bull-sponsored high-jinx, daredevil motorcycle show.
Ronan and Barrett’s property empire, meanwhile, has seen some of its loans earmarked for the Irish government’s National Assets Management Agency (NAMA) — Ireland’s “bad bank scheme”, which was established to purge lenders of commercial property loans, many of them non-performing.
Battersea is at the top end of the scale of Irish property investment during the decade of the Celtic Tiger boom, but replicate it at a lesser level all the way from Eastern Europe to the holiday beaches of Spain and out to Asia, and it becomes clear why Lenihan has had to change his tune.
A historical footnote: a Reuters feature informs us that the Battersea Power Station was used during World War Two to burn 120 million pounds worth of banknotes that had to be disposed of to stop enemy forgeries.
Something to boast about then. Comparatively small change now.
Europe has become increasingly selfish and materialistic in the 20 years since the fall of the Berlin Wall, the heads of the Roman Catholic bishops' conferences across Europe said at the end of their three-day annual meeting at the weekend. "The crisis sweeping Europe today is serious," they said in a statement after the session in Paris. They cited materialism, individualism and relativism as major challenges facing European society.
The bishops' sober assessment contrasted with the upbeat mood that the overwhelming "Yes" vote in Ireland's Lisbon Treaty referendum created. It must be noted they drew up their statement before they'd heard the news from Dublin on Saturday. And their statement ended with a note of Christian hopefulness. Still, their diagnosis is so fundamental it's hard to imagine they would have changed much in the text.
The EU show is back on the road. Sixteen months after Irish voters brought the European Union's tortured process of institutional reform to a juddering halt by voting "No" to the Lisbon treaty, the same electorate has turned out in larger numbers to say "Yes" by a two-thirds majority.
This is an immense relief for the EU's leadership. After three lost referendums in France, the Netherlands and Ireland, and a record low turnout in this year's European Parliament elections, the democratic legitimacy of the European integration process was increasingly open to question. The Irish vote will not completely silence those doubts. Opponents are already accusing the EU of have bullied the Irish into voting again on the same text, and of blackmailing them with economic disaster if they did not vote the right way this time.
If this morning’s flight from Brussels to Dublin is an indication of how Irish people will vote in Friday’s referendum on the EU’s Lisbon reform treaty, then the result will be an emphatic Yes on Saturday afternoon when the final results are expected to be known.
The majority of the Aer Lingus flight packed with Irish diaspora from Brussels – some of who hold office in the EU capital – seemed set to vote Yes to the Lisbon treaty, which aims to give the 27-nation bloc greater sway in world affairs and streamline its decision-making.
Diplomats say there is mild panic in the EU capital at the thought that the regular June summit — where the bloc is due to discuss the Lisbon treaty reforming the EU — could be chaired by Eurosceptic Czech President Vaclav Klaus.
The periphery economies of the euro zone are suddenly in the spotlight. Credit rating agency Standard & Poor's has cut its outlook on Ireland's sovereign debt to negative. It worries that fiscal measures to recapitalise banks and boost the economy might not improve competitiveness, diversity and growth -- all making it harder to manage debt.
Next came Greece. S&P basically put the country on watch with a negative bias. The global financial crisis has increased the risk of a difficult and long-lasting struggle to keep the Greek economy on track, it said.
By Dan Williams
A Reuters investigation into how the Israeli domestic intelligence service Shin Bet is tackling threats from Jewish ultranationalists has raised intriguing parallels with Britain’s handling of the sectarian “troubles” in Northern Ireland.
Radical Jewish settlers who might turn to violence in a bid to wreck Israeli-Palestinian peacemaking are, increasingly, the quarry of the Shin Bet’s shadowy “Jewish Division”, whose operatives draw on a range of spying and interrogation tactics.
Each side accuses the other of trying to scare voters ahead of Ireland’s referendum on the EU treaty on Thursday.
“No” groups have campaigned on issues ranging from abortion and euthanasia to taxation and Ireland’s military neutrality. They also say new decision-making mechanisms mean small states will lose influence and get trampled by the EU’s heavyweights.
The government’s response is to accuse treaty opponents of scaremongering by campaigning on emotive and extraneous issues that will not be affected by the treaty.
In some cases neutral voices are inclined to agree, with the Catholic archbishop of Dublin and referendum commission weighing in to say there is nothing in the treaty that threatens Ireland’s strict abortion and euthanasia laws.
The government warns of “dire consequences” for Ireland’s economy and diplomatic clout if a nation that has gained so much from EU support and subsidies is ungrateful enough to reject the treaty.
The “No” camp accuses the government of bullying, blackmail and exaggeration. Indeed a number of economists say that while a “Yes” vote would be best for future prosperity, rejection of the treaty is unlikely to have any severe repercussions.
So who is the biggest bully in the playground? Or is it just an inevitable flaw in referendums that they become a lightning rod for irrelevant issues and for politicians who don’t trust us to be able to debate the question we’re being asked?