Thursday 8 December 2016

Bank chief takes aim at ECB in pre-retirement swan song

Published 18/11/2015 | 02:30

Patrick Honohan's nine-page speech to the London School of Economics is his public swan song before he starts his retirement later in the month
Patrick Honohan's nine-page speech to the London School of Economics is his public swan song before he starts his retirement later in the month

Patrick Honohan's nine-page speech to the London School of Economics is his public swan song before he starts his retirement later in the month.

  • Go To

It was a broad overview, designed for a foreign audience, of Ireland's economic and fiscal experience before and during the bailout years, and focuses on both the collapse, and the ensuing measures designed to put the economy back on the road to health.

The speech contained little we didn't know already, but there were some insights of interest, including whether there was enough international solidarity shown towards Ireland.

One argument he makes is that, had Europe's bailout pot, the ESM, taken a stake in the banks instead of the State, the public debt pile would obviously have been smaller.

The Governor also questioned whether Ireland might have avoided a bailout in 2010 had the European Central Bank voiced its support for the country a little louder. By doing so, he muses, it may have helped convince the international money markets that it wouldn't let the country go under.

It's an argument he seems unconvinced by. Noting that with borrowing costs at the time close to 8pc, a bailout programme would have been inevitable within months anyway.

What is more intriguing is the fact that he seems to believe the ECB was found wanting when it came to how vocal it was in its support for Ireland.

It begs the question as to whether, as a member of the Governing Council during that period, he attempted to influence ECB thinking in this regard?

Did he lobby his fellow members?

Perhaps it is naïve to believe he could have had any success given Ireland's deteriorating international reputation at that stage.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business