Thursday 18 July 2019

Behind the smugness is a clueless Brian Cowen

In the current economic turmoil the Minister for Finance should be showing all the hallmarks of a potential leader. He is failing miserably, writes Alan Ruddock

The more time passes, the less impressive Brian Cowen becomes, and the more we realise that he has only one gear. Cowen may be a consummate bar-stool debater, he may be able to bully and browbeat opposition spokesmen or media interviewers, he may be able to digest and regurgitate a brief from his officials better than any of his Cabinet colleagues, but he is no statesman. On Friday, he was given an opportunity by RTE's 'News at One' to calm the nation's jitters about the current financial turbulence, but instead of reassurance tempered by concern, we were treated to the narrow politics of a Fianna Fail party hack.

On the economy he was complacent, bordering on smug: we'll be fine, he said, because his December budget was a minor miracle in foresighted economic management.

On the stock markets, he was dismissive. The current chaos was a simple correction, caused not by market fears of what was coming next but by market overvaluation in the past. Nothing to worry about, really, just speculators getting their fingers burned.

On Bertie Ahern's problems, he was at his contemptuous best: he has no time for vulgar personal politics because politics is about issues -- as long, of course, as those issues do not include 'vulgar' things like ethics or morality or truth or integrity.

To the party faithful it was probably a tour de force: defiant Cowen laying waste to the doubters and scattering his enemies with the savagery of his delivery. For the rest of us, however, it was a depressing display. Cowen, whisper it, looks out of his depth now that the Department of Finance has to do a bit more than just count the tax revenues.

Cowen should be deeply concerned by the threat of recession in the US and the UK, and he should be equally concerned about the European Central Bank's determination to fight inflation and so flirt with recession. He, of course, is powerless to prevent an economic downturn in either the US or the UK, but he can influence the ECB and he can use the threat of an international recession to embark on aggressive domestic reforms that would improve the prospects of the Irish economy.

But he will not. On Friday he talked of Europe's "zone of stability" and said that he would not try to influence the ECB's deliberations over interest rate policy. He is, apparently, entirely happy that Ireland's membership of the euro has delivered year upon year of inappropriate interest rates, too low during the boom years and too high during the trough.

Cowen will say nothing to Jean Claude Trichet and the other ECB policy-makers, and will take whatever interest rates they choose to set, like the good little European that he is. His duty, however, is not to the ECB or the European Commission or the Council of Ministers, but to the Irish electorate, He should be making noise and should be arguing passionately for lower interest rates. He should publicly berate the bank for risking recession in the smaller member states so that German inflation does not tick up a basis point or two, but he will say nothing. He could even threaten Ireland's withdrawal from the single currency if the ECB continues to ignore the concerns of smaller countries, but of course he will not.

Cowen, as he said on Friday, only has the capacity to understand Europe in the simplest of terms. Ireland, according to Cowen, can only choose to be in or out of Europe, and has no role whatsoever in trying to influence its direction. He will stay dumb on interest rates and he will expect the voters to treat the referendum on the new European constitution as a referendum on European membership. Fear will be his and the Government's weapon of choice in the referendum debate -- vote yes, or the sky will fall.

There will be no serious attempt to argue for the new treaty, because it is far too complicated, so fear will replace rational argument. He does not see, or does not choose to see, that Trichet's intransigence on interest rates will cause problems for the Government when it tries to persuade an apathetic public to vote for the new treaty.

Why vote for ever closer integration with the rest of Europe if Irish interests will forever be ignored? Are we supposed to mutter out thanks for past handouts, doff our caps and just take whatever crumbs fall our way in the future? Are we supposed to say nothing when European policies threaten recession in Ireland?

And if we are, what does that say about the appetite of this Government (or future governments of any persuasion since they all take the same stance), to fight our corner on issues that may not carry the same import as a recession?

Cowen's silence on interest rates is matched by his empty verbosity on domestic reform. When asked, he will always trot out the same inanities: he wants to improve competitiveness, enhance productivity, deliver value for money in the public sector.

He tells us that reform is already under way, that his wise and prudent management of the economy will deliver all that we ask for and that social partnership will continue to steer the economy into calm waters. Yet he fails to provide any evidence beyond the sound of his own voice. The public sector employs more and more people -- 22 per cent more than in 2001 -- and the wage bill is mounting alarmingly.

Not once has Cowen called a halt, not once has he suggested that the public sector could shed 30,000 workers rather than hire another 30,000. He talks of competitiveness, but ignores the reality that the much of Ireland's increased competitiveness in the 1990s came from the steady devaluation of the Irish pound, and not from visionary government policies.

In its latest report, published last November, the Competitiveness Council said that "Ireland is now the second most expensive location for consumers in the EU-15 and has the third highest inflation rate . . . Ireland's physical infrastructure remains a source of serious competitive disadvantage, with a lack of investment in the 1980s combining with huge growth in the economy and the population since the 1990s to bring about infrastructural bottlenecks. Across transport networks, energy, information and communication technology and housing, Ireland's stock of infrastructure lags those of comparable countries elsewhere in the OECD."

Cowen claims his beloved National Development Plan will close the gap, but how seriously can we take his assurances that the NDP will deliver real change when his government cannot even ensure that broadband is available in a country that styles itself a 'knowledge economy'.

How seriously, too, can we take those commitments now that the money has started to dry up? Cowen and his colleagues failed to deliver change when they had resources, so what chance when they do not?

It is a very real problem. Cowen is Bertie Ahern's anointed successor and he should, by now, be showing signs of real leadership. As Minister for Finance he should be planning for the next five years, even the next 10, laying down a template for reform and deregulation that could transform the country. Instead, he stays stuck in the same old gear -- petulant, aggressive, boorish -- muttering the same old mantras. There is no sign of an imagination at work and no sense of urgency. He talked on Friday of Ahern's 'leadership skills' -- essential, apparently, in the upcoming round of wage talks with the social partners -- and showed none of his own.

The result is stasis. Ahern's government is leaderless and purpose free. It shambles along, its credibility shattered by Ahern's grim grip on office and by the failure of his lieutenants -- Cowen chief among them -- to pick up the slack. They are focused on protecting their fatally wounded leader, not on securing future prosperity for the country. One gear, grinding slowly, and driving us all closer to recession.

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