One of Ireland’s best known developers Niall Mellon, who has spent tens of millions building low income housing in South Africa, says Irish developers are being wrongly criticised for their role in the Celtic Tiger crash.
Speaking to the Irish Times Mellon stated, “Irish people need to remember there was no property crash in Ireland; there was a bank collapse that caused a property crash. Two different things. Fianna Fáil were desperate to blame anyone except themselves and heaped pain on developers.
“It was an absolutely disgraceful effort by the then government, and it hasn’t been much better under this one. But this year Frank Daly, the current chairman of Nama, came out and said it was the banks, not the developers. So developers need to be fairly judged now. Everyone is forgetting developers only built to satisfy demand.”
He states Ireland “is too small a country and doesn’t have any real experience to deal with large-scale insolvency and debt resolution. At the moment it’s self-destructing through a policy of spitefulness and negativity. My own view is that Ireland Inc’s strategy with Europe is failing. Ireland should have been lobbying for a minimum of a 30 to 40 per cent write-off of our total debt. We should use the opportunity of the EU presidency to march passionately but peacefully and try and influence a better outcome."
“There has to be a shared responsibility and a shared approach to solving this. So if you borrowed money you sell your assets to pay back as much of that loan as you can, and when you’ve done that you should be set free, in recognition of the fact that there was a systemic collapse of the financial governance system with the Irish banks.”
Mellon could have opted for “the easy choice” of bankruptcy in the UK but decided against it. Pride was one factor, another, he claimed, was that the Irish Government “doesn’t seem to have the remotest understanding of how vital entrepreneurs are to any economy, and there’s going to be no financial recovery in Ireland until business people are released from their guarantees. The banks loaned us money for the long term and called it in in the short term."
“It is mindbogglingly numbing that the Government have perpetuated mental torture on hundreds of thousands of Irish people who should not be held accountable to a personal guarantee. If they lost a particular asset, that’s fair enough, but there is no scenario that in any reasonable environment the banks should be allowed to enforce a personal guarantee.”
“We’ve had a systemic bank collapse, utter and complete. Nobody could have withstood what happened.”