Brendan Keenan: We can't go on fooling ourselves about our missed troika targets

All talk and no action? Finance Minister Michael Noonan and Taoiseach Enda Kenny should stop making spurious claims that we are meeting the troika reform targets

October 01 2012 04:44 AM

WE have always loved false statistics. In the 1990s before people started travelling widely, we were repeatedly told that Dublin's O'Connell Street was the widest street in Europe. In the 2000s before people began to follow economics, we were repeatedly told that we were the best paid people in Europe although average income was higher in six countries. Today, the great Irish myth is that We are Meeting all Our Troika Targets and by implication deserve to be bailed out.

This nonsense is repeated endlessly by ministers and sometimes even appears to be repeated by members of the troika, but it is factually incorrect.

Just as one can compare national income in reports by the OECD and IMF or easily compare O'Connell Street's measurements with Unter den Linden or the Champs-Élysées, it is not difficult to determine whether we are meeting out targets.

Every three months, the troika helpfully publishes the memorandum of understanding that sets out targets agreed by the Government and troika.

While it is true that we have met the (very few) financial targets for debt ratios and the like, even a casual reading of the memorandum shows we repeatedly fail to meet other targets for reform.

Sometimes those targets are simply stretched into the future, sometimes the memorandum highlights the failure and curtly notes that the date has been changed. Either way, we have failed to meet them.

If a bus is cancelled, it does not mean that those sitting at the bus stop have not been let down.

This would not matter if the targets were petty issues, but most of them are important and undermine our credibility in Europe at a time when we are trying to renegotiate our debt and may well need another bailout.

To take five important examples: we have missed the deadline for personal insolvency legislation; acknowledged we won't reach the deadline for the introduction of a water charge; failed to sell off Permanent TSB and nationalised it instead; failed to take on the professions; and failed to reduce the bill for public sector pay and pensions.

We have also made so little progress on issues such as a property tax or privatisations (and grudgingly picked the wrong candidates), which ensures we will miss targets in these fields as well. We have also ignored repeated troika warnings about protecting the elderly from cuts and placing an unfair burden on children.

You do not have to agree with the troika's prescriptions to see that we are not following them. The least contentious troika demand was probably that Permanent TSB should be sold.

It is hard to disagree, unless you like living in a country with a state-owned banking sector that leaves taxpayers vulnerable when things go wrong. There was no real energy behind the State's efforts to sell the lender and the chief executive admitted last month that he doesn't think a sale will now happen for some time -- which is nice for him and his colleagues because they keep their jobs, but a disaster for the rest of us because we get to pay for their mistakes.

The troika itself is getting antsy about the failure to meet almost any deadline that does not have a number attached to it and has repeatedly told the Government in private that more needs to be done to meet those targets to modernise the economy and break the power of the many vested interest groups that brought Ireland to the brink.

The long list of broken promises, combined with a certain smugness and energetic efforts to get our debt written down, have left many in the troika feeling understandably cynical.

They wish, for example, that Finance Minister Michael Noonan had put more effort into selling off state assets.

This all matters because many people are confused by the government narrative that says that "we are the good boys. We have done every thing asked of us and now the troika won't give us any extra help."

The troika is beginning to believe that we are all talk and no action -- a north European version of the Greeks.

The truth is probably somewhere in the middle, but every time a government trots out the lie that we have met every target, somebody in Washington, Brussels and Frankfurt bangs their head on a table and shouts, "Not again".

Brendan Keenan: We can't go on fooling ourselves about our missed troika targets

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