News Editorial

Tuesday 23 September 2014

Beware the credit gods

Published 12/11/2012 | 12:39

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The Government need not spend too much time congratulating itself on winning a referendum in which only a third of the electorate voted by the relatively narrow margin of 58pc to 42pc. And it should spend even less time seeking excuses for an unimpressive performance.

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This vote had always resembled the proverbial piece of cake. Who could oppose the copper-fastening of children's rights in the Constitution? Child abuse has been one of the most shocking issues of recent years. The role of the State, in relation to the fate of children in its care, is deeply controversial.

For these and other reasons, those campaigning for a No vote had great difficulty in making what was almost their sole plausible claim, that the referendum was simply unnecessary.

Perhaps this fact inspired -- it certainly must have increased -- the Government's complacency, visible all through the downbeat campaign and even when it had to meet a court challenge to statements on a website and in a booklet it had published. The High Court ruled in its favour, but the Supreme Court overturned its judgment.

How could ministers have allowed themselves to fall foul of the courts? Decades of controversies involving the courts over the conduct of referendum campaigns should have warned them. Could they not see that they were vulnerable on the issue of equal treatment for the Yes and No sides?

As so often in Ireland, we may never get satisfactory answers. But there is at least one way in which the Government can redeem itself.

In the campaign, complacency was not confined to Merrion Street. Large numbers of voters must have stayed at home because they considered the result a certainty. However, the Government could have done more to encourage them to vote. And it should have recognised dangers to itself.

This lack of engagement between the establishment and the people -- especially when it comes to the exercise of a fundamental freedom -- is bad for democracy. It must also make the Government nervous about going ahead with further referendums.

And in the present case it has a duty to fulfil, more important than any campaign event.

Whether or not we voted to amend the Constitution, the treatment of deprived and vulnerable children would not be settled chiefly in the Dail or in the courts. It would be decided on the ground. This calls for reform of services and determination to atone for past errors. The story has not ended, it has only begun.

Beware the credit gods

Credit ratings agencies emerged long since as major players in the fallout from the global financial meltdown. Governments, bondholders, international agencies and top bankers seemed to regard their pronouncements as infallible.

And in a way, they were. If a major ratings agency reduced a country's standing by just one notch, that country's debt burden would rise. If there was a deep cut, especially one to the dreaded "junk status", there would be talk of bailouts and even defaults.

Fears about the immediate future could, and still can, come into the reckoning.

Moody's, one of the leading agencies, suggested last week that Ireland's Ba1 rating could be cut if we rejected the European fiscal compact in "the forthcoming referendum". This opinion was not only wrong, but badly out of date. We voted Yes to the fiscal treaty last May.

The agency quickly removed the offending item from its website and replaced it with a rather flattering message about Ireland -- coupled, however, with warnings that sound remarkably familiar.

We must meet our fiscal targets. We must watch out for adverse events in Europe. Our new insolvency law will work in the long term but cause problems in the short term.

Did the international financial community really need a ratings agency to emphasise the obvious?


Irish Independent

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