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State may face ‘wave’ of cyberattacks from same gang, security expert warns

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The Republic could be facing a “wave” of cyberattacks from the same criminal gang that has targeted the HSE, according to a former army intelligence officer and security consultant.

Such attacks tend to come in waves because the technology that works against one IT system, in this case the HSE’s, often also works against systems used by other bodies or organisations in the same country, according to security expert Adrian Jacobs.

“There tends to be a wave because when you can get access through one system, the chances are that other systems will be as vulnerable.”

He said the gangs behind criminal cyberattacks that involve ransom demands operate to a “successful” business model.

This included significant advance work to find a weakness before launching their attack. They gangs then often seek to maximise their return on this investment with subsequent attacks on other agencies or bodies in the same country.

State bodies within one country can have similarities in terms of age, how the system was developed and also a level of compatibility between agencies.

“If you get five shots, and you score on two, that’s doubling your return,” he said.

Mitigate

Mr Jacobs also highlighted the speed with which Taoiseach Micheál Martin stated that there would be no ransom paid.

He said this was an attempt to mitigate against not just the attempt to profit from the current attack but also the potential for “multiple dips into the well” in the form of more attacks.

“I wouldn’t expect a victory parade after the HSE attack is contained, because they will be hugely concerned about the exposure that is still there. Because the modelling would suggest that [more attacks] is most likely.”

The most likely location for ransomware gangs was North Korea, China, or Russia, with Russia thought to be the likely location for the gang in the HSE attack, he said.

Whereas state control was likely in North Korea, in China and Russia some gangs are believed to operate in return for occasionally carrying out non-commercial attacks on behalf of the government, he said.

“You would have had attacks that were directly political. For example in the Baltic states there have been state-directed attacks. Moscow would deny this, but the targets have all been national strategic targets.”

He also said there would be no need for any member of the gang to come to Ireland as part of the preparation for the attack.

While larger, richer countries might be expected to pay higher ransoms to protect their health services and therefore a more likely target, they would also be expected to have better resourced protection of critical national IT infrastructure, Mr Jacobs said, which could explain why Ireland was attacked.

Mr Jacobs added it might be precisely because of the pandemic that the HSE was chosen.

“The more vulnerable you are, the more likely you might be considered to pay a ransom.”

NCSC

In Ireland, the main body involved in the oversight of Ireland’s critical IT infrastructure is the National Cyber Security Centre (NCSC), based in the Department of Communications.

It is the national point of contact for cyber security and will be in contact with Europol and the Enisa, the European Union Agency for cybersecurity.

Under the terms of the 2016 Network and Information Systems Directive, the State has responsibility for dealing with the security of services provided by multinational companies across the European Union that have their European headquarters located in Ireland. The majority of these multinational companies are from the United States.

In other countries, with much larger military infrastructures, there tends to be a greater involvement by military intelligence and the national intelligence services, in respect of cyber warfare and cyber security, Mr Jacobs said.

The success or otherwise with which Ireland deals with the attack on the HSE system, and any subsequent attacks, may have an influence on the State’s ability to continue to attract and maintain foreign direct investment, he added.

“From the Government’s point of view, one of the first calls they would have had to field would have been from the likes of Intel, because identifying how access was gained, whether they are reliant or connected in any way to the same access point, would be a concern.”

While major multinationals and other large businesses based here would have their own IT security systems, they also use the same national infrastructures such as broadband networks used by State agencies.

Not reported

“Without a doubt, and I can guarantee you of this, there are a huge amount of cyber ransoms that don’t go reported.”

However, commercial organisations often do not want to admit that they have been attacked, he said, for fear of prompting further attacks.

Given the speed of technological change Mr Jacobs believes it impossible to completely secure systems against attack.

“The battle goes on. You can never have enough resources . . . It is about risk management.”

In the US last week, the operators of the largest fuel pipeline in the country, Colonial Pipeline, were reported to have paid a ransom of 75 Bitcoin, or approximately €4 million, after a gang called Darkside, based in Russia, closed the pipeline network in a cyberattack.

The attack severely affected fuel deliveries in the US and led to a state of emergency in four states.

On Friday the New York Times reported Darkside had announced it was shutting down, following unspecified “pressure” from the US government.

In a statement in Russian to the newspaper, the criminals said they had lost access to aspects of their system and that money had been withdrawn to an unknown account.

However, the newspaper quoted security experts as saying that the statement from the criminal gang could be a ruse.

Mr Jacobs said the gangs involved in ransom attacks use ransom negotiation tactics, and that initial ransom demands are often “testers.”

In the case of the attack on the HSE, the Taoiseach’s public statement that no ransom would be paid, meant there was now a “stand-off”.

“You are into: ‘do you pull the trigger or don’t you’?”

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The truth about Ireland’s monster €240bn debt: it wasn’t the banks

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There’s a perception that Ireland’s monster debt – it will be €240 billion by the end of the year, on a per capita basis the third highest in the world, was put there by band of rogue bankers. And that we as a people have been victims of a terrible wrong.

The truth of course is more sticky, more unpalatable than the bar stool narratives we tell ourselves.

Most of the debt – more than €100 billion – arose from a sequence of budget deficits run up in the wake of the 2008 financial crash and linked to then government’s mismanagement of the public finances, a government that we voted into office three times in succession.

The former Fianna Fáil-led administration had spent lavishly in 2000s while using windfall taxes from the property sector to plug the holes in its accounts.

Deficit

When these taxes dried up, the deficit ballooned. At the height of the crisis in 2009 the deficit was €23 billion. That meant the State was spending €23 billion more than it was taking in by way of taxes and other income.

This necessitated borrowing on a grand scale, which went on – to a varying extent – for a decade until the State ran a budget surplus in 2018.

The original cost of bailing out the banks was €64 billion but this has been clawed back to around €40 billion by way of levies, dividends and share selloffs arising out of the State’s ownership of the banks.

It’s a big number, but less than half the bill foisted upon us from budgetary mismanagement, none of which can be clawed back.

On a per capita basis, the State’s debt figure equates to €46,000 for every man, woman and child in the State and €103,300 for every worker.

And the cost of servicing it has cost us €60 billion over the past decade: equivalent to three years of health spending. Make no mistake the State is paying for its boom time folly.

So it behoves us to sit up and listen when the Irish Fiscal Advisory Council (Ifac) sounds a note of caution about the Government’s budgetary strategy, particularly when it claims we’re sailing close to unsustainable debt trajectory.

And not to dismiss the council’s critique, as some do, as an act of fiscal pedantry, far removed from the realpolitik of government.

While the €4.2 billion spending hike earmarked for Budget 2022 is broadly welcomed, the council takes issue with the Government’s medium-term budgetary strategy, which envisages a series of much bigger budget deficits out to 2025 and nearly €19 billion in additional borrowing.

Debt

This will leave the State with a bigger and less manageable debt up the line and therefore more exposed to the next crisis. There was now a one in four chance of the national debt moving on to an unsustainable trajectory in the years ahead, it said.

The council also warned that borrowing and ramping up spending during a strong recovery could “backfire” triggering an acceleration in prices if capacity constraints, most notably in the construction sector, bite.

You would think that as a country with a big debt, the chief threat here is rising interest rates, something that is likely to arise if the current pick-up in inflation proves longer than expected.

Ifac has stress-tested the Irish economy against possible interest rate hikes and growth shocks, finding the latter poses a greater problem.

While a big 2 percentage point shock to the Government’s borrowing costs would add just 0.4 percentage points to the debt ratio in three years it would barely raise annual funding costs. This is largely because the National Treasury Management Agency (NTMA) bond issuance is long-dated and, in the main, fixed rate.

In contrast a typical growth shock of 3.6 per cent for two years could add over 20 percentage points to the debt ratio in three years. “With high debt ratios to begin with, this could snowball and make it difficult to pull down debt ratios in later years,” it said.

Plan

Two years ago, NTMA chief Conor O’Kelly was asked what the chief financial risks facing the agency were and if it had a Brexit contingency plan.

He said the agency operated on “permanent contingency” basis . As a small, highly-indebted economy, which relies on international investors for 90 per cent of its borrowings, he said Ireland and the NTMA needed to be in a permanent state of crisis readiness.

The reality is that the next shock, the next thing that will hit our funding market, will probably be something that we have not yet thought of and is not on the front page of every newspaper in the world, O’Kelly said. Nine months later, the Covid crisis hit and the global economy fell off a cliff and the NTMA’s borrowing plans were out the window.

This goes to the heart of Ifac’s commentary: it’s not a case of wondering if there will be another recession or if there will be another financial shock, that’s a given, they’re coming on average every 10 years.

Downturns are part of the natural cycle, financial shocks are part of the global economy. The question is, will you be in a position to borrow and spend your way out of it.


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Berlin house seizure referendum approaches decision day

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In her apartment in suburban Berlin, Regina Lehmann despairs at the letter from her landlord, a big real estate group: the rent is going up.

Effective November 1, the increase of 12.34 euros ($14.54) on her monthly rent of 623.44 euros will be “difficult” to finance with her only income a disability pension, Lehmann tells AFP.

Almost 700 of her neighbours in the popular Berlin neighbourhood of Spandau will suffer the same fate, boosting their rent by up to eight percent.

Increases like these are at the root of a popular initiative to “expropriate” real estate companies such as Adler, which owns Lehmann’s flat,
that will culminate in a local referendum on September 26, the same day as national and municipal elections.

Residents in the capital have become increasingly frustrated with rising housing costs, as the city’s attractiveness to outsiders has grown in recent years.

And beyond Berlin, the cost of housing has become a hot topic on the campaign trail in the contest to succeed Angela Merkel as chancellor.

Back in Lehmann’s living room, surrounded by pictures of her family, Lehmann says she simply “won’t pay” the rise.

“I think, if we pay, after a while they’ll just increase the rent again,” she says.

364,000 signatures

Rent campaigners secured the referendum in Berlin after collecting 346,000 signatures in support of their proposition — well above the number needed.

They are pushing to “expropriate” homes from real estate companies with more than 3,000 properties.

The result of the poll will not be binding, but advocates hope to force city government to respond to soaring rents, with the cost of housing going up by 85 percent between 2007 and 2019.

The rise has been painful for residents in the capital where 80 percent of people are renters, and 19.3 percent of people live under the country’s poverty line, compared to 15.9 percent in the country as a whole.

Campaigners lay the blame at the door of major real estate groups, such as Adler, which owns 20,000 properties in Berlin.

In Lehmann’s Spandau district, activists argue Adler’s attempt to hike rents is illegal, exceeding a legal reference index linked to the average rent in each area.

SEE ALSO:

The property group, in response, describes an “improved environment” around the lodgings that gives it grounds to charge more.

Supporters of expropriation have upped the tempo of their campaign in recent weeks to win over undecided voters, hanging posters and organising demonstrations across the city.

Many Berliners experienced rent increases after the German constitutional court struck down a rent cap which had been introduced by the city earlier this year, and a poll by the Tagesspiegel daily showed 47 percent of residents supported the radical proposal put forward in the referendum.

“We have to fight for our rights,” says Catia Santos, 41, who recently attended a rent protest with her partner.

“Recently my rent has gone up by 100 euros, even though I am not earning any more than before.”

Political clash

On Friday, just over a week before the vote, the city of Berlin announced the purchase of 14,750 residential properties for 2.4 billion euros from German real estate giants Deutsche Wohnen and Vonovia, a deal forged under pressure to find an answer to rising rents.

Forcibly taking ownership of privately owned accommodation has largely been rejected by national and local politicians in favour of plans to speed up the building of new homes.

“The best protection for renters is and always will be having enough places to live in,” Armin Laschet, the conservative candidate to succeed Merkel as chancellor, told a real estate conference in Berlin in June.

The social-democrat favourite in the local Berlin elections, Franziska Giffey, also declared her opposition to the proposal, saying it could “damage” the city’s reputation.

But her party’s candidate to be chancellor, Olaf Scholz, has called for a “rent moratorium” to stabilise prices.

Only the far-left Die Linke and some individual Green candidates have come out in favour of expropriation, with some even displaying the rent campaigners’ logo on their election materials.



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President’s decision to decline invite to centenary an ‘own goal’, says Senator

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President Michael D Higgins’s decision to decline an invite to a centenary church religious commemoration of partition and the establishment of Northern Ireland has been branded an “own goal” by Independent Senator Gerard Craughwell.

The move was “uncharacteristic” of the President, who has “always been the man to step forward for reconciliation and to do his bit to try to bring this country together”, said Mr Craughwell on Saturday.

The event in Co Armagh next month is not a celebration, but a commemoration, he said, adding that the declination has brought about a “deep sense of disappointment” in some unionists.

“I think we have missed an opportunity to extend the hand of friendship to the more moderate unionists and we have actually enraged the more radical unionists,” he told RTÉ’s Saturday with Katie Hannon radio programme.

Mr Higgins was invited to a “service of reflection and hope”, the Senator noted, adding: “Any of us sitting in this country today, north or south, would want to reflect on the history of this country with the hope that we might have for the future of the new Ireland- an Ireland that would embrace all traditions.”

Mr Higgins’s statement politicised the situation, which was “so uncharacteristic of the President it is difficult to accept”, he added.

Mr Craughwell was one of six Independent Senators who signed a letter to the President on Thursday voicing concerns that he had declined the invitation.

In their letter, the Independent Senators said: “We earnestly suggest, if possible that you should reconsider the matter with a view to attending the event as we believe your attendance has significant potential to advance the cause of reconciliation between the different traditions in Northern Ireland and on this island.”

‘Serious mileage’

Mr Craughwell said there will be “extreme unionists who make serious mileage out of this and the more moderate ones will be deeply hurt”.

Sinn Féin’s David Cullinane told the programme he could not see “any circumstance” where the President of Ireland would mark, commemorate or celebrate partition.

Mr Cullinane said there is a “fine line between commemoration and celebration”, and he said partition of the island is not a historical event but contemporary, as the country “is still divided and our country is still partitioned”.

Social Democrat co-leader Róisín Shortall said she agrees with the actions of the President, who was “completely within his right” to decline the invitation.

“The partition of Ireland and the formation of Northern Ireland is not something that most people would consider good developments or something that we should celebrate in any way,” she said.

There would be a “very different discussion” to be had, with other concerns expressed, said Ms Shortall, if the President had accepted the invitation to the event with its current title, which stated it would “mark the centenaries of the partition of Ireland and the formation of Northern Ireland”.

Minister of State for the Department of Health Mary Butler said the discussion around the issue has been “a little bit unhelpful” as it overshadowed the President’s visit to the Vatican.

“Unfortunately something that was really positive turned into a negative … The President of our country is entitled to make a decision on any invitation he receives,” she said.

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