Business Irish

Monday 24 April 2017

Post-election bartering will decide who will ascend to Merrion Street

Michael Noonan (Fine Gael)

According to the bookies, the Limerick man is almost unbackable as the next finance minister. He is currently the opposition spokesman and tradition would suggest the post would automatically fall into his lap. But as ever, politics could intrude.

If the Labour Party have a particularly strong election, but are still forced to give up the Taoiseach's post, it would be inconceivable they would also relinquish the Finance Ministry. In that event Noonan would lose out.

There are precedents for this. In the 1990s so-called 'rainbow government', John Bruton of Fine Gael became Taoiseach, but the Labour Party insisted on taking the finance ministry and Ruairi Quinn entered Merrion Street.

Noonan has a lot to recommend him for the post. He has been a Fine Gael spokesman on finance before and has been in Cabinets dating right back to the early 1980s.

Noonan's Budget speech in December 2010 was a tour de force, as he highlighted what he called the "hubris'' of the current Government and zoned in on curbs on child benefit for third-born children -- "did some third child beat you up coming home from school as a young fella?" he asked Brian Lenihan, to peels of laughter in the Dail chamber.

Unlike Labour, Fine Gael has agreed with the €15bn fiscal adjustment demanded by the EU and IMF and is keen to achieve this through spending reductions, rather than tax rises, which is Labour's favoured approach.

Noonan, if he reaches the ministry, will concentrate on getting Ireland a better deal from the EU and IMF, cutting the current rate from 5.8pc. As for the banks, Noonan favours negotiating with senior bank bondholders, but strictly within an EU context and not unilaterally.

Chances of getting the job: 4 out of 5.

Joan Burton (Labour)

Described by virtually everyone as incredibly hard working, and few other politicians have scored so many points against the Government over banking policy.

Burton, a former accountant and lecturer, has even audited bank balance sheets and up to a few months ago was a racing favourite to be the next finance minister. But whispers in the Labour Party suggest she faces internal competition for the post, although most agree she will land some kind of role in Cabinet regardless.

Popular with the grassroots of the Labour Party, Burton is the party's deputy leader and while she has other interests -- like third world issues for instance -- she would be disappointed if she does not land the job in Merrion Street.

Burton took a lot of flak for opposing the bank guarantee scheme in September 2008, with Fianna Fail accusing her of national sabotage. But as the consequences of the guarantee became clearer, her stance became more mainstream, with a range of economists and commentators decrying the link formed between the banks and the sovereign.

While sometimes described as being strident by her opponents, Burton has worked hard to stay on top of the debate over bank capitalisation and has developed extensive links in the US and Europe with influential financial figures and fellow European politicians. Key figures like Central Bank governor Patrick Honohan also stay in touch with her.

Chances of getting the job: 4 out of 5.

Eamon Gilmore (Labour)

An intriguing selection, but do not rule him out. If Fine Gael gets Enda Kenny into the top post, Labour will inherit an almost automatic right to the finance ministry and Eamon Gilmore could demand the role for himself. The bookies seem to believe he may do this, putting him at 7/1 odds for the job.

The business community might have some trepidation about a former member of Democratic Left taking the helm at Merrion Street, but Gilmore will have learned the lessons of Ruairi Quinn who far from alienating the business community, became quite popular in financial circles and ran a tight fiscal ship during his period of office.

Gilmore has no experience however of financial issues and would need to assemble a strong team around him to have the required credibility. Any attempt to "re-balance'' the current €15bn cuts programme more towards tax increases is likely to prove unpopular with the markets.

However Gilmore is likely to be more hard nosed with the banking sector and could score populist points on a range of issues in that sector.

But as finance minister he will have to live within the broad parameters of the EU/IMF programme and one of the key elements of this programme is that the banks must be given more capital.

Gilmore's policy of burning senior bank bondholders is also going to be difficult to get past the EU/IMF/ECB, but it is likely the Labour leader will at least try to do it, after making considerable running on the issue in the last two years.

Chances of getting the job: 3 out of 5.

Pat Rabbitte (Labour)

Has never been a senior minister, but has been a minister of state -- in the 1990s rainbow government -- and is a very experienced politician. Rabbitte is believed to be close to Gilmore and they both share a history in Democratic Left and the Workers' Party.

Rabbitte's close relations with the trade union movement could make his life difficult if he has to push through another three years of austerity, including painful reforms to the public sector made possible under the Croke Park agreement.

His elevation would be difficult to explain publicly for Labour, seeing as it would involve an effective demotion for Joan Burton, the party's finance spokeswoman.

However Rabbitte's ease in the media would be an asset and he pays close attention to financial issues and many of his friends are prominent business people in Dublin.

As a minister of state for instance, Rabbitte reformed the credit union movement and he would look to reform the Department of Finance, a department he has been fiercely critical of over several years.

If he got the role it would mean his party leader, Eamon Gilmore, would become Tanaiste but would have to take a backseat in a more junior ministry. There is no certainty that is going to happen.

Rabbitte also didn't have a smooth time as Labour leader despite his undeniable command of soundbites, placing a small doubt about whether he would prosper in the role.

Chances of getting the job: 2 out of 5.

Richard Bruton (Fine Gael)

Would now be in poll position if he had not challenged Enda Kenny and been pushed down the pecking order in a reshuffle last year. Bruton has been in financial ministries before (he was enterprise and employment minister in the 1990s) and is very well versed in banking and economic issues.

While his plan for the banks in 2009 was very unwieldy looking, he was one of the first politicians to warn about the sheer amount of debt Ireland was taking on via the bank recapitalisations.

Bruton has made it clear that all bank bondholders must take hits, as these investors invested in inherently risky institutions with property-heavy balance sheets.

His successor Michael Noonan has been slightly more circumspect on this subject, but they will have to work together closely whatever happens.

Bruton would dearly love to get his hands on the financial levers and it would crown a long career in national politics. His brother John for instance was a finance minister on two occasions and Taoiseach once from 1994 to 1997.

Sometimes dismissed as a policy wonk, Bruton would have no problem absorbing the complexity of the finance brief and he is also reasonably well known to politicians in Europe.

Chances of getting the job: 2 out of 5.

Ruairi Quinn (Labour Party)

Quinn's trump card is he has done it before, holding the finance portfolio between 1994 and 1997. As finance minister he managed to run a surplus and reduce unemployment while also spending reasonably liberally.

He was of course helped by breakneck growth at the time, which in one particular year reached over 10pc in GNP terms.

Quinn made history by stepping into Merrion Street, becoming the Labour Party's first ever finance minister.

His arrival was greeted with suspicion, with many predicting that Labour would create huge deficits and alienate foreign investors. In fact Quinn became known as a conservative minister who played a significant part in the creation of the single currency and who embraced Ireland's then emerging hi-tech industries.

Could he get a second chance at the ministry? It is hard to see how his arrival at Merrion Street would not be a demotion for Joan Burton, but Quinn's arrival would lend gravitas to the new government's front bench.

His performances over recent months on the banking crisis have been impressive and unlike some of his party colleagues he doesn't exhibit any pathological dislike of the business community.

Quinn has deep links into the business community and his brother Lochlann is chairman of the ESB.

Quinn's experience in the 1990s as president of ECOFIN, the European finance ministers' group, could come in handy if Ireland is hoping to win new friends in Brussels and get a better deal on the EU/IMF package.

Chances of getting the job: 3 out of 5.

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