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Maeve Dineen: Man with a mission but is he a man with a plan?


Finance Minister
Michael Noonan has
been reluctant to
explain his proposals

Finance Minister Michael Noonan has been reluctant to explain his proposals

Finance Minister Michael Noonan has been reluctant to explain his proposals

IS Michael Noonan a man with a plan or out of his depth? The straightforward answer is that we just don't know. His unexpected announcement this week that this country would not repay €3.5bn of loans owed to investors in failed Anglo Irish Bank and Irish Nationwide has taken everyone but the IMF by surprise.

Noonan has been understandably reluctant to explain his proposals in detail, saying on Wednesday that he was not giving away his negotiating position on the airwaves.

That is a perfectly reasonable stance, but the consequence is we don't really have a notion whether Noonan knows what he is up to or whether he was just chasing headlines on day 99 of his first 100 days in office.

It is quite clear the markets don't like his comments. The euro weakened on the back of Noonan's proposals and the cost of insuring Irish bonds against default rose to new records, but it's not the Finance Minister's job to please the markets. Certainly not in the short-term.

Clearly, it would be good news for Ireland if we saved €3.6bn by burning Anglo and Irish Nationwide's bond holders.

The money will come in useful and there is no moral or financial problem to rule out such an action.

The markets will accept this behaviour because they know it is rational -- but only if it is well-flagged and well-explained. Noonan did neither. Rather than regarding the markets as omniscient, it is often better to treat them like children. They like to know exactly what will happen and when.

This is the golden rule of the stock market and should only be disobeyed in extremis. The change in policy over these senior bonds is a broken promise. And you don't get many chances to break promises in these dangerous times.

Of course, many will say we are in extremis, that drastic times call for drastic measures, and Noonan is right not to play these games. By appearing unpredictable he will keep the markets on their toes and make negotiations down the line much easier.

As a former English teacher, Noonan would have taught Shakespeare's 'Hamlet' to many students. In that play, Hamlet acts like the mad fool to get his way.

Let's hope this is what Noonan is playing at. The last government found it impossible to wring concessions from Europe by playing by the rules; so perhaps he wants to appear unpredictable.

The problem, however, for those who playact is that others can take you at face value.

In Brussels yesterday, there was consternation at Noonan's Washington outburst. But is this necessarily a bad thing? Noonan represent's Ireland's interests in Europe and let's face it, there are not too many others doing this at the moment.

Still, it is silly to pretend there is no cost to provoking Europe. There is a feeling emerging that he was once again playing to a domestic audience by talking about relatively minor matters when the euro's future hangs in the balance.

At one level, it is difficult to disagree; the European house is on fire. Noonan was conspicuously absent from the emergency talks in Brussels this week. He sent Junior Minister Brian Hayes instead, while he was on his solo mission to Washington and New York.

Ireland hasn't offered one suggestion to solve the euro crisis -- if anything we have just added to it.

Yesterday, talk on the financial markets was of little else other than Ireland's bombshell and the Greek mayhem. Many questioned why Noonan chose this moment to add petrol to the blaze in Europe.

Even Noonan himself must have felt he went a little too far yesterday when he announced his comments were "given a weighting they didn't actually deserve" because of the crisis in Greece.

In the eyes of our European partners, Mr Noonan is fiddling while Athens burns. The increasingly strained relations between Dublin and Brussels would matter at the best of times but they are dangerous when we are dependent on Brussels for our survival.

The markets and Europe are unhappy with Noonan, the IMF appears to be pleased with him and the public here are a little bewildered. We are suddenly being asked to believethat the IMF, temporarily under US control but soon to be run by French Finance Minister Christine Lagarde, is our new best friend.

Apparently, IMF officials never left his side while he was in Washington. Noonan then went on to behave like a crazed teenager who just got the phone number of the prettiest girl in the class, after US Treasury Secretary Timothy Geithner gave him his personal mobile number. This was despite the fact that Geithner was at pains to say that his influence in eurozone matters was minimal. These sudden shifts in friendship are more confusing than a teenage crush, but nobody is taking the trouble to explain to the Irish public what exactly is going on.

There have been no fireside chats from Noonan, no address to the nation from Enda Kenny. It is hard to conjure up a solitary Irish soundbite beyond Eamon Gilmore's question about 'Frankfurt's way or Labour's way'.

Noonan is blundering around Europe at the moment like a 21st century Forrest Gump. We can only hope the Limerick man has a plan and is adopting a dangerous pose, pretending to be a loose cannon capable of anything in order to scare Europe into making concessions.

But there are reasons to fear he is floundering; drowning rather than playacting. Perhaps he could give the nation a hint and let us know that it's all an act; even a simple wink would do.

Irish Independent