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Analysis/Comment Last Updated: Aug 23, 2010 - 8:24:15 PM


Irish Economy 2009: Cowed Cowen promises "fightback" from bewildered Government
By Michael Hennigan, Founder and Editor of Finfacts
Feb 4, 2009 - 7:40:52 AM

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Naas Road / Newlands Cross, South Dublin, on Feb 04, 2009 morning

Irish Economy 2009: Taoiseach Brian Cowen on Tuesday promised a "fightback" from his bewildered Government at a press conference following the announcement of €2 billion worth of public spending cuts. He said people in leadership positions have to lead from the front.

In 1872, English statesman Benjamin Disraeli, commented on William Ewart Gladstone's Liberal Party government: "I doubt not there are in this hall a widow and an orphan who remember the profligate proposition to plunder their lonely heritage. But, gentlemen, as time advanced it was not difficult to perceive that extravagance was being substituted for energy by the government. The unnatural stimulus was subsiding. Their paroxysms ended in prostration. Some took refuge in melancholy, and their eminent chief alternated between a menace and a sigh.

As I sat opposite the treasury bench, the ministers reminded me of one of those marine landscapes not very unusual on the coast of South America. You behold a range of exhausted volcanoes. Not a flame flickers on a single pallid crest. But the situation is still dangerous. There are occasional earthquakes, and ever and anon the dark rumbling of the sea.…"

On Tuesday in Dublin, Cowen addressed the press and beside him sat Mary Harney, a ministerial colleague for 11 years, now an exhausted volcano like Cowen. As she awaits the formal death of her party at the end of February, she serves out her time and in the first year of retirement, will get a €200,000 bonanza, including severance of €70,000 for loss of office. She had given people hope of reform and change in times past but surrendered principle for cheerleading for tax cuts funded by a property boom.

Also on the platform, was Green Party leader John Gormley, who had sold principle for office and while the thought of 5 additional years in opposition was intolerable in 2007, he should have taken the honourable course and returned to teaching. Last week, he abandoned his plan to introduce an immediate ban on traditional light bulbs and his €15m "climate awareness" publicity campaign, heads his laundry list of "achievements". He now props up a blundering government without public trust, at a time of great peril for the country.    

Brian Cowen told the Dáil last week that Ireland is facing the most difficult global economic conditions in 70 years. He said there is little point in looking back at how some of this might have been anticipated or avoided. Cowen said the reality is that the present situation is unprecedented  and calls for clear thinking and resolute action.

The closest any member of the Government has come to acknowledging a monumental failure of historic proportions to put the Irish economy on a sustainable path, was on an RTÉ Radio programme on Saturday, Sept 06, 2008, when Minister Finance Brian Lenihan said: "You know, we’ve got to be honest about this as a people. We decided, as a people collectively, to have this housing boom. We decided not to have property taxes, to demand reductions in stamp duties, to demand interest for those who bought to-let properties, and there was no questioning in any part of the political system about that.”

...clear thinking and resolute action?

Finance Minister Brian Lenihan
What Cowen has provided in the past six months is the antithesis of political leadership. While he has been one of the culpable politicians who have destroyed the lives of tens of thousands and damaged the prospects of the Irish economy for years to come, he would have partially redeemed himself, if he had responded to the economic crisis with a comprehensive range of measures, which could win public support, despite the pain.

What Cowen has delivered is back-of-the envelope measures, which shreds his remaining credibility.

It's typical of Irish governments to be awaiting a report before making a decision, or not.

Cowen outsourced the review of public spending to a group  known as "An Bord Snip Nua," which is due to report in June. Meanwhile, the need for immediate public spending cuts arises and there are weeks of debate as to what form they may take. Tax policy is awaiting a report from the Commission on Taxation, due in September.

Irish Politics

“There go the people. I must follow them, for I am their leader,” Alexandre Ledru-Rollin (1807-1874)

“Those are my principles, and if you don't like them... well, I have others,” Groucho Marx (1890-1977)

Martin Wall writes in the Irish Times today: "For the last fortnight or so, trade union leaders had been aware that the Government was moving towards a pension levy for staff in the public service as an alternative to salary reductions in its effort to cut €2 billion from exchequer spending.

The Government’s intention had been widely flagged and even the general secretary of the Irish Congress of Trade Unions David Begg acknowledged that the final phase of talks would focus “inexorably” on pensions.

However, it was only at about 1am yesterday that trade union leaders received the full details of the Government’s proposals and alarm bells immediately started to ring.

Union leaders had earlier received a briefing from a senior official in the Department of Finance which was vague on specifics, but which had maintained that the lion’s share of the €2 billion cuts sought by the Government would have to come from the public sector pay bill."

Brian Cowen seems to have lost the will to govern.

He has 20 ministers of state and some of them concede that they have made-up jobs but nothing is done about it.

The Cabinet of 15, has 250 staff in their private offices. John Gormley has 15.5 including part-timers.

It's almost a year since the OECD reported on the public service and it was acknowledged, that 800 quangos, with patronage for thousands board memebrs, required culling.

The litany could be droned on for long.

The economy is on fire and the political leaders in power, behave like a shower of poltroons.

If Cowen had presented a "Big Bang" multi-year plan containing serious reforms and a big reduction in political featherbedding to the Opposition and social partners, he would have a chance to restore his credibility and promote confidence overseas.

Talk of "fightback" is a joke given the slow-motion response to the crisis, since last July.

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