Thomas Molloy: No news is better than wrong news, and clarity is best of all
Published 28/09/2010 | 05:00
CONFUSED about the kerfuffle over senior and subordinated debt? Unsure whether we are welshing on bonds issued by Anglo Irish?
Don't worry. You're not alone. In fact, almost everybody in Europe shares your confusion -- and that's not surprising, because the Government is doing a very poor job explaining what it plans to do.
This drip-drip of information on the Government's plans comes from sources as diverse as Green Party Finance spokesman Dan Boyle's Twitter account, off-the-record briefings, and fractious Dail committee hearings.
It is this confusion that has helped to push borrowing costs to record highs. It is this confusion that is pushing down the euro against the dollar. It is this confusion that is allowing every sort of outlandish rumour to fester in the already feverish markets -- and it all falls on Brian Lenihan. He is doing too much, with too little help.
Mr Lenihan is at the centre of almost every major story in the country right now: the slow-motion leadership contest, the banking crisis, efforts to cut government spending to realistic levels, and the Government's efforts to reassure the global markets through an endless series of interviews with foreign media and leaders.
It is time for Mr Lenihan to hand over some of those powers to a group of ministers before the cracks in the infrastructure bring down the entire building. Not because he isn't doing a good job; but because we need several people who understand our problems, can find solutions, and can explain those solutions to the public and the markets.
It is becoming faintly ridiculous that a Finance Minister is being forced to make almost daily comments about the bond markets. Bond traders don't need to be told that yields are too high by a man who has just borrowed at those rates. What the markets now need is detail: our plans to cut spending and raise taxation, and what we intend to do with the banks, especially Anglo.
"Speak quietly but carry a big stick," former US president Theodore Roosevelt once advised. He was right. We need to tone down the rhetoric. Stop making promises we can't keep and understand that clear, unambiguous information is best, no information is next best, but incomplete or incorrect information is damaging.