John Moran's parting words leave me speechless
Published 11/05/2014 | 02:30
A few months ago I stood in a crowded lift in the Department of Agriculture. It stopped at the second floor. In stepped the dark figure of Ireland's Mr Austerity, John Moran, Secretary General of the Department of Finance.
Instead of greeting him with the respect normally given to top civil servants I foolishly tried a joke: "Oh my God!" I bellowed out to the other people in the lift, "Hold onto your wallets."
All my fellow passengers looked suspiciously at John. For one split second I could see the libel lawyers lurking. Moran, to his eternal credit – and my immense relief – smiled, sighed sympathetically at such a juvenile jibe and got out at the next floor. The remaining passengers looked mightily relieved.
I would never have been so impertinent to Kevin Cardiff, David Doyle or any of Moran's other predecessors in Finance. They were more stuffy, orthodox, seemingly humourless mandarins, lacking in the engaging self-confidence of the relatively new face of the boss of the most powerful department of State.
Last week the new face was on the way out. Nobody knows why. Despite his long-winded explanations Moran's departure is a mystery. At the age of only 48 he is quitting after only two years. Speculation about his motives is rampant. If Alan Shatter had not stolen the limelight on Wednesday, Moran's name would have been on all Thursday's front pages.
Some suggest that Moran is restless by nature. Others insist that he is eyeing a juicy post in the private sector. None are convinced by his claim that he always regarded the appointment as "a mission with a fixed purpose". No one remembers him setting out his stall on his arrival, his targets, or any suggestion that he would depart when he achieved his objectives.
Moran gave far too many and varied reasons for his shock exit last week. On Thursday he told the Public Accounts Committee (PAC) there was "nothing sinister" about it. He had enjoyed "four intense years" in the public service (two in the Central Bank and two as Secretary General). He revealed that he believed in the principle that managers should make themselves redundant. He insisted that his success should be marked by the end of the Troika programme.
Now the Troika is gone, Ireland is back in the money markets, the economy is improving, unemployment is falling and Anglo has been liquidated. So John is off.
It was pretty self-satisfied stuff. His statement read like a thinly disguised job application.
The "mission with a fixed purpose" explanation exudes self-satisfaction. It suggests that Moran believes he has completed the task of turning the economy and the banks around. Mission accomplished. Miracle performed.
The lure of the private sector is a far more plausible theory. There is little doubt that the big banks will soon come knocking on Moran's door. His speciality is banking. He claims to have sorted out the Irish banks – at least to his own satisfaction. He sees no major obstacles ahead. At the PAC he even referred to the banking system as having been "stabilised".
That was a bold claim. Not one shared by Mario Draghi, president of the European Central Bank (ECB). Unfortunately for John Moran, on the very same day that he was claiming the Irish banks were through the hoops, news broke that the ECB was far from happy about their state of health.
Draghi told Northern Ireland Sinn Fein MEP Martina Anderson that the ECB would not release a key letter written by his predecessor Jean-Claude Trichet to Brian Lenihan in 2010 because it has ongoing concerns about "financial stability risks in Ireland". Shorthand for the Irish banks are still in mortal danger.
Draghi added that even though several years have passed since the infamous Trichet letter was written and the prospects for the Irish economy had improved considerably "risks, especially financial stability risks, are still present".
Who is right, Mario or John? There is hardly a middle way.
My money is on Mario. John Moran is hardly an independent observer when it comes to giving a verdict on the state of the Irish economy under his own stewardship. Even less so, when it comes to his view on the banks.
Remember John was once a banker. He was a banker with Zurich Bank. And he is likely to be a banker again. Indeed, the banks appear to be his Achilles heel. Despite Mario Draghi's fears, he not only claims that they have been stabilised but seems happy as Larry that bankers' salaries in Ireland are justifiable.
Only two weeks ago the Department of Finance (aka John) advised Michael Noonan to cast the nation's (yours and mine) 14 per cent voting stake in favour of Richie Boucher's €843,000 pay package. Worse still – courtesy of the department – we the taxpayers all voted in favour of approving BoI governor Archie Kane's €500,000 non-executive package for doing God knows what for the Bank of Ireland last year.
John Moran argued that there was only a small pool to pick from for the boards of banks. He was defensive about the accusation that insiders always landed the jobs, claiming that many applicants for bank boards were not qualified. He even pre-empted criticism of a coming appointment to the chair at AIB, hinting that the nominee would be just another of the usual suspects.
The hole in John's argument is that Ireland's banks are barely half-way home. The mortgage arrears problem is getting worse, not better. Solutions are slow, as Mario Draghi appears to have spotted. The Troika has not gone away and is subjecting Ireland to half- yearly surveillance.
Indeed, in a pointed reference to the fragile state of the economy, Draghi unhelpfully pointed out that the Troika is still monitoring our affairs closely. The doctor is deserting us in intensive care.
And what about the stress tests, the sword of Damocles hanging over Ireland later this year? Will the banks pass the European-imposed hurdles ?
Credible economists, like Morgan Kelly, have pointed out the big perils of the autumn challenge to bankers' balance sheets. John Moran shrugs off the threat. Indeed, on Thursday he gave a hostage to fortune when he assured the PAC that he was "confident" Ireland would pass. He pooh-poohed the dangers of recapitalisation, insisting that even our most diseased zombie – AIB – could raise funds in the markets if push came to shove. He did not venture a guess about how much such a manoeuvre would cost the taxpayer.
Luckily for John, he will not be in the hot seat when the banks face the stress tests. He will not be the one who has to explain the banks' questionable balance sheets to the European Banking Authority.
By that time he will probably be back in the private sector. Like Matthew Elderfield, the short-term financial regulator, he will be another Messiah who jumped ship early, declaring that his mission was accomplished.
Reading between the lines, Moran is frustrated at the Department of Finance. Last Thursday, buried in his eulogy of the economy and the improvements in the department on his watch, were words of warning about how the public service had become a place where people tried to avoid working.
It had improved under his guidance, but much more needed to be done.
He lashed out at others, claiming that the quality of information "on which we have to base our decisions ... is still very much below what I would consider to be an optimum level. We are a long way from being able to data mine the wealth of information present across other organs of government."
It's quite a damning parting line.
Moran sounds like an incurable private sector man who has served his term of public sector purgatory.
Do not be surprised if he turns up in a plum banking job overseas – just as Ireland faces the stress tests.
Sunday Indo Business