Saturday 7 December 2019

Kenny and Noonan must resolve to sing from the same hymn book

ONE New Year's resolution the Government might like to consider is singing from the same hymn book. We recently saw Enda Kenny tell the nation that we could not emerge from the bailout unless we got a deal from Europe.

A month earlier, Finance Minister Michael Noonan said the opposite and assured the world that a deal is not necessary. It is no exaggeration to say that some sort of deal on bank debt is the cornerstone of the Government's economic policy.

Both men sit on the Economic Management Council which meets weekly to discuss economic issues. Is it really too much to ask that they share common views on the issues that really matter to the State?

Some will say that this is nitpicking or argue (correctly) that ministers should be allowed to change their view as circumstances change, but the circumstances have not changed in the past few weeks. The bond markets remain as benign as ever and the Government appears to be meeting most targets.

Mr Kenny and Mr Noonan regularly disagreed last year on the economic outlook, but forecasting is difficult and most people accept that forecasts are given in a range even if the Department of Finance prefers to publish fixed targets. People buying bonds are less likely to accept fuzziness when it comes to matters such as the necessity for a second bailout.

Luckily for Mr Kenny, the markets were already winding down when he made his extraordinary comments which effectively amount to an admission that the current bailout has failed. He is unlikely to be as lucky if he repeats his views in the months ahead.

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