Forget the events of 15 years ago and fix now
The economy and its banking system are in tatters after a decade of gross mismanagement and workable solutions are not proving easy to find.
Unfortunately, the arrogant approach adopted by the last government in its international dealings, particularly with Brussels, is not helping our situation.
The fact is that we do not have too many friends on the international stage at this juncture. This is amply demonstrated by the irrational preoccupation of the French and Germans with our corporation tax rate.
Surely the French and Germans must realise that if Ireland is forced to increase its corporation tax rate, it will just drive the economy into a deeper hole and we will become an even greater source of instability for the eurozone? One senses that some Europeans are now more than happy to stick the boot in to Ireland and teach the country a lesson.
Over the past couple of weeks some welcome progress has been made in relation to our reputation. Enda Kenny appears to have a much less arrogant approach than his predecessors and by all accounts this is going down very well overseas. The impending visits of the Queen and the US President will certainly raise Ireland’s international reputation for all of the right reasons. This is badly needed for our tourism industry in particular, but for investment activity in general.
However, it appears to be a case of one step forward, two steps backwards at the moment. The publication of the Moriarty Tribunal report represents another serious body blow to the domestic and international reputation of our political and business system.
The report is damning in its assessment of the period considered. As expected the main protagonists deny any wrongdoing and we are now down to a situation of whose word we believe.
Most people would appear to have their minds made up in that regard and the sense of disillusionment and cynicism with the manner in which the political and business system operates will only have been compounded by the Moriarty findings.
Indeed, the international press has picked up on the report and is reporting it in a manner that is less than flattering. Ireland has a serious governance problem that must be rectified.
Meanwhile, our economic and financial problems are getting worse. The black hole that is the banking system is set to get deeper and the financial liability for the country is set to escalate to totally unmanageable levels.
Thankfully from our perspective, we are not alone. The situation in Portugal is starting to look as unmanageable as Ireland’s. The markets are increasingly convinced that Portugal and Ireland will probably default on sovereign debt over the next couple of years.
If this was to occur, there would have to be a serious question mark over the value of the state’s guarantee on deposits in excess of €100,000. Confidence in the banking system is shot, and without it, a banking system cannot function. The best solution would be to sell the Irish-owned banks to big international names for a minimal sum, but no international bank would touch an Irish bank with a 40ft pole at the moment.
Europe is going to have to come up with a solution for the problems in Portugal and Ireland very quickly.
Greece is already doomed, but there is also a growing risk that Spain might enter the fray. The public utterances from Europe’s politicians and officials would not fill one with confidence that they understand the gravity of the crisis, but hopefully in private they have a better grasp of reality.
Meanwhile, our government should be allowed get on with the task of trying to turn around the country and not get bogged down in the events of 15 years ago.
