Bankruptcy warning - A warning we’d be fools to ignore

PROFESSOR Morgan Kelly’s record gives him an authority that cannot be ignored.

He, so long ago, bravely challenged the politically, commercially and media driven group-think and warned we were heading for disaster. He stood against the tide and what a pity it is we did not have the humility or wisdom to listen.

His prediction that the country is heading for bankruptcy, chills to the bone. We don’t have to look too far into our past to be terrified by the suggestion that we might return to living standards more akin to the poorest of southern Europe rather than those enjoyed in the richer north. We, after all, think most of us have left the tenements forever.

Depending on your perspective, Prof Kelly’s piece was a Churchillian call to arms or a pessimistic analysis that our salvation depends on decisions impossible without a fundamental change in Government and public attitudes. Prof Kelly’s piece did re-energise the great sense of victimhood that we seem to so readily succumb to — the vast majority of reactions agreed with his analysis and most was even more pessimistic. It indicated a collapse in confidence as damaging as our economic collapse. That confidence is further undermined by our powerlessness.

That was starkly seen in just one instance. An IMF proposal to impose a 60% haircut on €30 billion in unguaranteed bonds was, through the G7, vetoed by American treasury secretary Timothy Geithner. This cost Ireland around €20bn and maybe we should remember that before we abject ourselves before President Obama later this month. This powerlessness was further underlined by the fact that Ireland was not invited to a meeting last Friday between the EC, the ECB and the bigger EU states on the Greek crisis.

Yesterday afternoon Central Bank Governor Patrick Honohan challenged many of Professor Kelly’s assertions. His record demands that his view be respected too, though as Central Bank governor and as a member of the ECB board he may not be as free as Prof Kelly to express his views.

Once again the majority of Irish citizens must be scratching their heads and wondering which tipster to back. At a time when national confidence is so terribly challenged this is not good enough. In the very recent past we saw a Taoiseach’s political career, and his party, collapse because of his indifference to communication.

Communication, even if the message is disheartening, is one of the great weapons at the Government’s disposal and they should use it better. Their refusal to respond to Prof Kelly’s analysis — though Communications Minister Pat Rabbitte did criticise his prescription for recovery — may be understandable but it does unfortunately leave a dangerous void.

As Prof Kelly and Prof Honohan do agree we are fighting for our economic survival and it is time the Taoiseach initiated a monthly non-political address to the nation to outline what progress has been made and what must be done. After all, he has to report regularly to the IMF/ECB/EU so why not to those who elected him? It might replace subjectivity with something approaching plausibility and inspire confidence to help avert the political catastrophe already predicted at the next general election.