Friday 24 November 2017

Colm McCarthy: Brian Lenihan was an exceptional minister for an exceptional time

The banking guarantee casts a long shadow but his efforts to stem the crisis took great courage, writes Colm McCarthy

Brian Lenihan was Finance Minister for less than three years. His elevation to cabinet (as Justice Minister) came only in 2007, so he led the department unburdened by responsibility for the economic policy excesses of the previous decade.

By the time of his appointment to Finance in May 2008, it was already clear that the fiscal position was deteriorating rapidly -- several banks had already collapsed in the US and elsewhere and the Irish banks were under attack in the markets. Lenihan persuaded his government colleagues to introduce the first budgetary cutbacks pretty quickly, in July of that year, and the Lehman collapse in mid-September triggered the worst financial crisis since the 1930s. His entire period as Finance Minister was devoted to battling the deficit and the implosion of the Irish banking system, and the second half of it to a third battle against cancer. He had hoped to find time in opposition to write about his first two battles but sadly has lost the third.

When the dust settles, Lenihan will, I believe, be judged to have contained the exploding budget deficit as well as could reasonably have been expected in circumstances which included not a single lucky break. But the scale of the banking disaster has exceeded the direst predictions and has laid low the solvency of the State itself.

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