Friday 27 April 2018

Ireland has largely restored image abroad

The IFSC Ireland chief says outsiders are more optimistic about our future than we are By Laura Noonan

IT was more than four decades ago, but John Bruton can still vividly remember the first time he took to a podium to argue for Ireland's inclusion in the European project.

Our one-time Taoiseach was then aged just 19 and found himself at a political meeting in Navan.

He had a reasonable claim on the mic, having recently penned a column for 'The Meath Chronicle' espousing the benefits of Ireland's entry to the EU. But some of the more experienced politicos were having none of it.

Cue an intervention from veteran republican Sean MacStiofain, a man who would go on to become the IRA's chief of staff a few years later. "Sean, in fairness to him, insisted that I got to speak, he wouldn't let me be shot down," recalls Bruton.

For the now 64-year-old, those heady days of 1966 were the beginning of a passion for the European project that burns as strongly now as it did all those years ago when he "campaigned vigorously" for Ireland's accession to the Common Market.

Bruton's main professional pursuit these days is heading up IFSC Ireland, a newly-founded organisation charged with growing our already-sizable international financial services sector.

It's a role he clearly relishes -- "It's enjoyable, interesting and doing something for the country" -- but he remains better known for his association with the European project and the crisis it has descended into.

In the year-and-a-half since he took up the IFSC role, he's penned numerous articles on the EU calamities and given scores of speeches on where it all went wrong and how it can be made right again. His website alone shows just how much European issues still consume him.

Does it bother him that he no longer has a seat at the table of Europe's decision makers, particularly during these most critical days for the European project?

"No, not really," he says. "When I was a politician I found that you were always making decisions against a deadline on the basis of incomplete information.

"All along you're told you can't have the brief until everything is ready -- by the time you have the full brief you have little time to read it.

"At least now I can stand back and look at things like the fiscal compact."

The fiscal compact, the grand pact designed to save the euro, is Bruton's latest European pre-occupation.

He believes that "95pc" of the December 9 agreement is "fine".

But imposing a statutory limit on a country's "structural deficit" is something that Bruton sees as hugely problematic.

"Supreme Court judges are going to be trying to adjudicate on something even economists can't agree on," he says.

"They'll have to consider when the (economic) cycle started, when it's going to end, and what the structural deficit is in any given year.

"It's an unnecessary complication and a distraction from the fundamentally good things that make up the rest of the compact."

Your interviewer isn't the only one he's shared these views with.

As a former Fine Gael Taoiseach, he has strong ties with the current government, where younger brother Richard holds a key cabinet position as Enterprise Minister.

"I would (raise issues with the Government) whatever way I can, privately or otherwise," he says.

Bruton's IFSC role puts him in front of audiences on a regular basis -- audiences he often talks to on Europe. He's also on two European think tanks.

The intermingling of his roles means it's "impossible" for Bruton to say how part-time his job at IFSC Ireland has been since he began in late 2010. Quantifying the achievements of IFSC Ireland is similarly difficult.

Founded by various strands of the finance industry, IFSC Ireland works with the IDA to nurture the financial services business already in Ireland and attract new entrants.

Bruton has spread the message on trips to Asia, the Gulf states, the US, Britain, Germany, France and South America.

But to what end?

More than a year on, IFSC Ireland can't pinpoint how many companies it has brought to Ireland, or how many it has convinced to stay or expand.

"You're opening up contacts, bringing people together so they can do deals," says Bruton, stressing that it's a gradual process where his role is to act as enabler rather than deal maker. He uses the growth of the funds industry to demonstrate that IFSC Ireland is working. "More money in more funds is being administered in Ireland than ever before," he says. "That's a result."

Results like that belie the massive challenges that have beset the IFSC since Bruton's appointment.

In his early days, he had to deal with Ireland Inc's decimated reputation following on the IMF/EC bailout and the catastrophic regulatory failings that led to our banking implosion.

More recently, the financial transaction tax that Germany and France are so determined to introduce across the eurozone this year could leave the IFSC at a disadvantage to the City of London (where the tax won't apply).

Bruton says that Ireland has "substantially overcome" the reputational issues and believes that outsiders are "more optimistic" about the country's prospects than we are.

But there is a lingering hangover from the regulatory failings -- the prospect of "over-regulation" at the hands of a seemingly endless stream of new codes emanating from the Central Bank of Ireland.

"It's wrong to have a lot of form-filling designed to comply with a one-size-fits-all regulatory paradigm without taking into account whether it is contributing to minimising risk," he says. "To have regulators you need to have an industry to regulate.

"The IFSC is in a constant state of renewal, we have to be able to welcome new firms."

As for the financial transaction tax, Bruton thinks it would be "very bad" for the IFSC, but he fundamentally believes it won't happen due to opposition from the Irish and other countries.

Another potential threat is the wave of cost-cutting and asset sales soon to be implemented across Europe's banks as they battle to recapitalise, a painful process that could have implications for their Irish units.

"I've had a lot of discussion with the international banks here. Some of the American banks are actually quite interested in doing more here, but the Europeans are more cautious," Bruton says, declining to be drawn on names.

He's more keen to share his views on whether European banks should be forced to recapitalise at all -- he "worries" about the initiative because it's a "pro- cyclical" policy that will only exacerbate the crisis the eurozone is already in by slowing down economies.

Between his concerns about the banking policy, his abhorrence of the financial transaction tax and his objections to the "structural" deficit clauses, it's clear that Bruton is distinctly frustrated with the European response to the crisis.

Does he really not harbour hopes of re-entering the European fray and trying to right those perceived wrongs?

He insists not, but is vague on what the rest of his career might involve, saying he has "never really had a very explicit career plan".

It's hard to top running the country, one suggests.

"I didn't run the country, I presided over a Government that ran the country," he says. "I really enjoyed that, I must say.

"One should never become too attached to any one position that it becomes sort of an obsessions. You have to retain some detachment in life if you want to lead a reasonable life."

One wonders how many people watching that irrepressible 19-year-old back in 1966 would have gotten a sense of that philosophy.

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