Take a bow for role model behaviour
The man is question is none other than European Central Bank (ECB) president Jean Claude Trichet.
In a recent interview he had one newspaper salivating at the prospect of Ireland being a role model for the rest of Europe.
The ECB boss wouldn’t be the first to recognise this and it’s been acknowledged openly that we have made good use of the monies and opportunities EU membership has presented us.
Mr Trichet said this week that Ireland was a good example of what countries can achieve when aided by the EU.
Overall, Mr Trichet was upbeat, despite the poor outlook still on the cards for the eurozone economy.
In that context he blamed failure of structural reforms for Germany’s lack of growth, which economists suggest will result in interest rates being kept at their current 2% levels for another 18 months.
In the case of oil he sounded surprisingly relaxed, given that price hikes traditionally have been deflationary.
Mr Trichet said there was less danger of the current spate of oil price hikes damaging the global economy than previously.
He argued that lack of economic reform, and not oil prices, would hold back growth in the eurozone.
He said a consensus existed among academics that there is a need for EU structural reform, a view shared by the European Commission, IMF, OECD and others, but is not being delivered on.
In a tribute to this country, he said: “Those who have been doing these reforms have been magnificent performers. I quote Ireland.”
After the back-slapping came the warning, as he said action was needed to tackle overheated property markets. He was specific about the action required.
In some countries that have a lot of real growth, there is a case for national action “to calm down the market”, he said.
Given our economic success, he had to mean Ireland and it is an issue that needs careful monitoring.
It will be too late when the bubble bursts.
He was unapologetic about the ECB’s role in the troubled eurozone.
It has delivered low inflation and low interest rates.
He rejected any notion that the euro or its attendant one-size-fits-all monetary policy was at fault for anything.
Ireland had made the maximum use of the stable conditions for which the ECB was responsible.
Implicit in what the president had to say was the view that even if all things were not equal, success was still possible.
In Ireland’s case, we could probably have done with interest rates probably up at around 7%-8% at least, but the economy was still able to deliver enormous growth and keep inflation in check.
Mr Trichet was right in alluding to those points.
For years as this economy bombed along, interest rates should have been up at 6%-7%, or possibly higher, due to the inherent inflationary pressures implicit in the strong growth figures that averaged over 9% in the 10 years up to 2000.
But despite that, we delivered, and so too could others, is his implicit criticism of those languishing.
It was quite bizarre recently when Irish inflation came back down close to the EU level that the opposition launched such a strong attack on the figures.
Fine Gael finance spokesman Richard Bruton raged that half of the items in the EU basket of goods were way above the EU average in the case of Ireland.
What he did not say was if that was the case, then the other half had to be well below the EU average to give us a similar inflation figure.
This economy has been highly successful, a point made during the week by Sean Fitzpatrick, the chairman of Anglo Irish Bank.
He said 15 years ago, there was high emigration, unemployment and taxation. He argued our success had not been acknowledged sufficiently.
Bank of Ireland’s Dr Dan McLaughlin maintains we have no self-belief.
The media is also insisting we are in a terrible state.
That’s probably why we enjoy being told how bad things are, which means the bearers of good news like Mr Trichet and others are simply whistling in the wind.
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