Brendan Keenan: Yet again, Honohan proves that he isn't shy and retiring
Patrick Honohan, Governor of the Central Bank of Ireland. Photo: Tom Burke
EXQUISITE timing would be one description for interventions of Patrick Honohan, Governor of the Central Bank. Not in the sense of delightful, but the other meaning of keen and penetrating -- as in "exquisite pain."
That may well be how government ministers felt, reading Mr Honohan's remarks on the early retirement scheme in the public finances -- on the day when the deadline for applications expired.
They will have recalled the governor's RTE interview 13 months ago when he confirmed that a bailout was under way, while Fianna Fail ministers were still denying such a possibility. The two occasions could not be more different. Monday's comments were at the launch of an English translation of a book of Irish religious folktales and legends -- hardly 'Morning Ireland'. But the subject matter may have had a certain significance. Many officials in Dublin, Brussels and Frankfurt, along with members of the troika, think that Irish attitudes to the bailout are often the stuff of folktales and legends.
They are particularly bothered by the widespread belief that Ireland is being forced into painful corrective actions by the troika.
That belief often suits the Government quite well.
Mr Honohan zeroed in on the fact that it is the Government, not the troika, which decided to get rid of 38,000 jobs. Mr Honohan also said the Irish authorities must seek as much freedom of action as possible, because those with whom it has to deal often had interests "not always fully aligned with Ireland". It would be wrong to interpret this as meaning that Ireland should engage in more head-to-head confrontations with the troika. Another comment suggests quite the opposite; when he said this freedom of action should be kept "to take advantage of the opportunities that arise spontaneously". That may be another version of the advice given by the silken civil servant Sir Humphrey Appleby in the TV series, 'Yes Minister', to engage in "masterly inactivity".
The contrast is with the advice of Mr Honohan's "mysterious strangers" to default on debts, burn bank bondholders, refuse bailouts at high interest rates, leave the euro, and so on.
The governor does not approve of that. Arguments will continue to rage on these questions. Mr Honohan can point to the fact that the first bailout interest rate was eventually reduced by half, and he did point to the fact that ECB loans at 1pc made the bank rescue less costly than it might have been.
This area was "still receiving close attention," he said, which will be taken as a reference to efforts to reduce the cost of the Anglo rescue through changes to the "promissory" notes which the government must honour.
It has been pretty clear for some time, and was reinforced on Tuesday, that Mr Honohan himself is not happy that Anglo senior lenders were repaid in full.
But he seems to take the view that full-scale hostilities with the ECB and troika on this and other issues would end up costing the country more in the long run. As he said himself, only time will tell. It could be a very long time.
- Brendan Keenan
Irish Independent
