Leinster’s courage and skill sadly lacking in our pathetic politicians

THE past week has crystallised the best and worst of Irish life. The Good: I don’t like gloating or gloaters, but I have to indulge myself. For the past four years, since professional rugby has become established, Munster supporters have lorded it over Leinster. The pedigree of Munster rugby is beyond dispute: two Heineken cups and outstanding displays against the All Blacks. In sharp contrast, Leinster’s masculinity, the fibre of their heart, backbone and even testicles have been ridiculed. Leinster have been depicted as poncey lady boys – more interested in the mirror than the match.

On Hill 16 last Saturday evening, with my 14-year-old son, I witnessed a most exciting and pulsating sporting event. The record crowd of more than 82,000 provided an electric atmosphere of eager anticipation. Bookmaker profits and my Wexford heritage added to my euphoria with Leinster’s win. While Leinster still have an uphill task to defeat Leicester in the final, the fact is their courage, tenacity, speed and skill won them this match in a spectacular way.

Great credit to the GAA’s leadership and foresight. Croke Park is our national stadium in every sense. The National League finals in Semple Stadium showed hurling can hold its own for sporting excitement. Despite one of the worst refereeing performances I have ever seen, Kilkenny’s class persevered. I expect they will collect Liam McCarthy yet again this September.

The soccer season is reaching its climax. Irish supporters are among the most fervent fans of English Premier League clubs like Man Utd, Liverpool, Chelsea and Arsenal.

The TV spectacle of this year’s fare in England and Europe has been exhilarating with eight-goal thrillers and spectacular skill. Elsewhere, Giovanni Trapattoni’s rejuvenation of Ireland, Bernard Dunne’s world title and Ruby Walsh’s endless winners have provided a feast for sports fans. These are the best of times – a true antidote for life’s woes.

The Bad: A week ago AIB’s top brass resigned. The writing has been on the wall for Eugene Sheehy, Dermot Gleeson and John O’Donnell for some time.

The malaise started last year with an unnecessary dividend of €270m. Reassurances about capital adequacy ratios and bad debts were misguided. I was present last October when Sheehy stated AIB would rather die than accept Government capital. Assurances that the Government’s recapitalisation of €3.5bn was sufficient, last month’s announcement of a further €1.5bn being required and the proposed sale of subsidiary assets meant “game over”. The worst is still to come. Acknowledged bad debts of €8.4bn could extend to €31bn. Ordinary shareholders have lost 94% in the value of their holding since the highest stock exchange valuation. Because AIB is of systemic importance to the Irish economy, this should put shivers up all of our spines.

I sat beside Dermot Gleeson at cabinet meetings from 1994 to 1997. As attorney general he was outstanding – concise, precise and extremely authoritative. His six-year tenure as AIB chairman has ended sadly. Colm Doherty is the best internal hope as the new CEO. As head of AIB capital markets he has performed well. However, if AIB is nationalised his style may not suit the civil servants.

Our banks are paralysed. The NAMA plan to remove toxic loans and assets could stymie settlement deals. Why would the bank settle a bad debt write-off at 50c in the euro if NAMA will take it on at 70c.

I am aware of cases where banks have withdrawn settlement terms because of this rescue plan. Meanwhile, credit is not available for mergers and acquisitions.

The ugly: With each passing day the public mood towards politicians is shifting from disillusionment to contempt. We have had four attempts since last July to stabilise the public finances. We now have the complete revised book of estimates for current and capital services 2009.

The figures are mind-boggling. Total current expenditure last year was €53.4bn. The Government is now committed to current public expenditure of €56.6bn. This is an overall increase of 6%. Capital expenditure is projected to be €7.3bn. A grand total of state spending of €63.9bn this year.

After the emergency budget, the Department of Finance estimated total taxation revenue would yield an extra €2bn with €36bn anticipated for 2009. Many economists are predicting this is over-optimistic. Do the maths: €64bn - €36bn = €28bn of a shortfall. Someone needs to shout “stop the lights”. This is insane economics. No one in Government is alarmed. If you are not in a state of panic over these figures you either do not understand the situation or are delusional.

I despair of our politicians. Can they not see how utterly unsustainable this budget arithmetic is? Do they not realise their attempts to curtail public expenditure have been hopeless?

How can a country with a GDP output of €150bn a year continually borrow €30bn annually to run Government services? Is it not completely inevitable that the IMF and world bankers will have to take charge of the situation? Bring it on.

The ESRI has begun to spell out the reality of our situation. Irish output will decline by €19bn this year. Unemployment is projected to reach 570,000. If these problems appear insurmountable, it is because they are becoming so. The failure to confront the cost of public administration and services is of historic proportions. This will become evident by 2011 at the latest. At that stage savage welfare reductions will be required.

There are solutions. Ireland has to reduce its cost base. The price of labour, energy and property here is too high relative to what our markets can pay us for export goods and services. Productivity gains are required right across the economy. The painful process of correction to reduce these costs has to be accelerated and delivered upon. Any other course of action is escapism.

I FEAR a further deterioration in economic activity and retail spending in the autumn. The CSO figures show a downturn of 21% in the annualised first quarter sales statistics. Already, many businesses have slashed their own costs. They cannot contract further through cost-cutting. Every sub-sector of the economy – manufacturing industry, transport, tourism, agriculture and services is haemorrhaging jobs and cash. The modus operandi for management is no longer profitability, but the slim hope of survival by the withdrawal of capacity. Put bluntly, this means other competitors not surviving and closing down.

Politicians will knock on your door, smile sweetly and seek your vote.

To survive they are the best of people – pleasers. They are attentive to your local community needs and ever available to assist you with a personal problem. They are visible and even genuine. But ask yourself would you elect them individually to run your local convenience store?

We have elected too many teachers and lawyers to public office. They don’t understand how jobs are created and sustained. We need to start electing candidates who empathise with enterprise, understand finance and can make tough decisions. While you ponder your ballot choice, excuse me while I rewind the video tape to play Leinster’s three terrific tries yet again.