An economy in crisis - It’s time for leadership Mr Cowen

BATTERED, bruised and increasingly incredulous investors had to watch again yesterday as bank shares took another pounding.

Many people saw what was left of their life savings stagger towards irrelevance. Others tried to convince themselves that this mayhem is all just part of an unavoidable, natural cycle and that, in time, their retirement nest eggs might recover some lost ground.

On Monday, one of our economy’s backbone shares — Bank of Ireland — fell below €1 for the first time in decades. Less than two years ago these shares were trading at €18.

Yesterday, Anglo Irish shares joined them below the psychologically significant €1 mark suggesting that our entire banking system is approaching something very close to unknown, uncharted and very dangerous territory.

Confidence is as low as it has been in a lifetime and nerves are becoming frayed. The continuing share slide is also a disconcerting judgment on measures we once hoped might encourage market stability.

This uncertainty and disappointment is reflected in yesterday’s highly influential Financial Times’ league table reflecting the newspaper’s assessment of recent performances of 19 European finance ministers. Brian Lenihan, at 18th, is named just one place from the bottom.

September’s unilateral pledge to guarantee bank deposits raised hackles across Europe and may have contributed to his poor rating. Nonetheless, it seems that our ability to manage our domestic crisis is not as highly regarded as we might wish. This assessment will do nothing to rebuild international confidence in our economy or our government’s ability to manage it.

Mr Lenihan, if he gives this assessment any consideration at all, may feel hard done by but he need not feel alone.

If Taoiseach Brian Cowen’s performance was assessed it is unlikely that he would have even the comfort of matching Mr Lenihan’s 18-out-of-19 rating.

It would be neat to draw a parallel between the collapse in the value of Bank of Ireland shares and the collapse in confidence in our Taoiseach but the reality is very different. Spectacular though the bank collapse was, and continues to be, it took the bones of two years to get to this point. The change in attitude towards Mr Cowen is startling and happened over a far, far shorter period.

Just six months ago Mr Cowen became Taoiseach. His promotion was greeted with optimism and enthusiasm by an electorate anxious for a new attitude. It was hoped that Mr Cowen would usher in a change in emphasis and more effective, more direct leadership.

Time — just a short few months — has shown that those hopes were wildly optimistic. His Lisbon failure and his disastrous budget, as well as his increasingly questionable appointment of Mary Coughlan as Tánaiste and crucially as Enterprise Minister, have done significant damage to his reputation.

Despite all of this we need Mr Cowen to lead as we had hoped he might, with courage and without favour. Despite that fact the 63% of those surveyed for a poll published yesterday felt that the budget was “too tough” we need him to make the hard calls.

There is a growing urgency about all of this as the collapse in bank shares cannot go on much longer without even more disastrous consequences. Because this crisis goes well beyond party politics, Mr Cowen could win support for the sternest of measures if he were to convince the public that they might succeed.

That latitude will not last forever.