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Party rivalries doom us to disaster

'The capital sin of our young Irish state", wrote William Philbin, the Bishop of Clonfert, in 1957, "is our failure to provide for our young people an acceptable alternative to emigration. Our version of history has tended to make us think of freedom as an end in itself and of independent government -- like marriage in a fairy story -- as the solution of all our ills."

A year later, Ken Whitaker quoted those words in his introduction to Economic Development which, once it was endorsed by de Valera's government, charted the new course for independent Ireland steered by Sean Lemass.

Today, confronted by the most dangerous threat to our economic sovereignty since the foundation of the State, those words have a curious resonance. Substitute "Europe" for "independent government" and they seem as relevant as they were, half a century ago.

But there is a terrifying difference: the talent, originality, boldness -- all the factors comprising leadership -- that dragged Ireland out of the Fifties' quagmire, now seems in singularly short supply.

If we regard Philbin, Whitaker and Lemass as representatives of the clerical, administrative and political elites who then achieved consensus, it becomes easier to understand.

Our present predicament demonstrates all three elites are in disarray.

This is so evident in the case of the Catholic bishops that the very term "clerical elite" teeters between seeming sarcastic and oxymoronic.

That Archbishop Diarmuid Martin, the only bishop who has again and again demonstrated a remarkable capacity for national leadership, has been effectively ostracised both by the Vatican and by his episcopal colleagues is the clearest measure of the current chaos and confusion in Ireland's scandal-ridden Catholic Church. The reasons for the collapse of the administrative elite are, however, more complex.

The higher reaches of the civil service remained the ambition of the best and the brightest of school-leavers for 50 years but that changed with the impact of free secondary education in the Seventies.

Since 1973, moreover, membership of the EEC has unveiled wider horizons for Irish civil servants and many of the most able have abandoned Merrion Street for Brussels. Others were seduced by the attractions, again often international, of more lucrative careers in the simultaneously burgeoning private sector.

Now the pendulum has swung back as massive unemployment in the private sector highlights the value of job security in the public sector.

But that is irrelevant as long as the embargo on public- service recruitment remains in place and it will be some time thereafter before high-fliers who subsequently seek public service careers will be in a position to shape policy.

So for the moment we are stuck with a cohort of senior civil servants whose passivity contributed to, if it did not create, the present catastrophe and few of whom, to put it charitably, have the remotest claim to be described as the best and, indeed, the brightest of their generation.

The consequences have proved especially devastating in the Department of Finance although Brian Lenihan's efforts to address them have produced some slight hope.

The first straw in the wind of change was the appointment of an economist, Dr Alan Ahearne, as his Special Adviser in March 2009, an appointment scarcely indicative of overwhelming confidence in his mandarins, notwithstanding any disclaimers to the contrary he felt compelled to make as Minister for Finance in the interests of maintaining the best possible working relationship with his officials.

Then, in September 2009, Mr Lenihan announced the appointment of another academic economist, Professor Patrick Honohan, as governor of the Central Bank, a seat traditionally kept warm for former Secretaries of the Department of Finance; indeed John Hurley, Professor Honohan's immediate predecessor as governor, had been appointed Secretary General of Finance not once but twice, in addition to having also served as Secretary General of the Department of Health and Children.

In October 2009, there followed the appointment of Matthew Elderfield as head of financial regulation with responsibility for all regulatory activities in the re-structured Central Bank. Both Professor Honohan and Mr Elderfield had international experience outside the narrow boundaries of the incestuous and self-congratulatory Irish financial world.

Professor Honohan spent a decade at the World Bank and two years with the IMF in addition to teaching in universities in London, California and Australia; Mr Elderfield was formerly the chief executive officer of the Bermuda Monetary Authority.

But it is still unclear whether their appointments came in time for them to plug those regulatory banking loopholes hitherto ignored by Ireland's administrative elite, loopholes that could still become a catastrophic abyss.

The shortcomings of Ireland's administrative elite pale into insignificance, however, when contrasted with its political counterpart. The key to Lemass's success was that he had the political courage to make a u-turn: to abandon the protectionist policies he had championed during the economic war of the Thirties and, in the interests of economic expansion and his European overture, instead to make an unswerving commitment to free trade.

The present government members, in stark contrast, still shrink from admitting their mistakes. Instead they drone on about world economic conditions, Lehman Brothers and host of other unpersuasive mantras designed to deflect the blame away from themselves.

They dream of turning the clock back to the point where Brian Lenihan sees nothing incongruous in speaking publicly of his aspirations to restore AIB to "its former greatness" and to restore the Irish banking system to "the greatness it once had".

Such sentiments remind me of a fable by James Thurber, the great American humorist, about a husband who, on rising one morning and glancing out the bedroom window, told his wife there was a unicorn in the garden.

Nonsense, she said briskly, the unicorn is a mythical beast; she then rang for an ambulance as she had long wanted to get rid of her husband. When the men in white coats, equipped with a strait-jacket, arrived, they asked the husband if he had said there was a unicorn in the garden; he replied that the unicorn was a mythical beast.

The men in white coats glanced at each other, put his wife in the straitjacket and carted her away. The moral for our times? The Celtic Tiger is a mythical beast.

But the men in the white coats in Brussels and in the IMF, peering anxiously at the Irish patient, are prescribing straitjackets not for our politicians but for our economy -- in effect, for the poor, the pensioners, the unemployed and the otherwise under-privileged. And their diagnosis is the patient is slipping away.

"Irish sovereign debt riskier than Iraq's", read a Reuters headline on Thursday; Ireland is now sixth in the ranks of the world's 10 riskiest sovereign debtors.

That's why European Central Bank President Jean-Claude Trichet warned on the need for "precise action and precise decisions". The symptoms are so ominous that they registered even in the Dail's strained exchanges about the need for all-party consensus on a four-year budget.

Coalition has been described as the British political system's response to national crisis. Hence their wartime coalition governments and the National Governments of the Thirties; hence today's Conservative-Liberal Democrat coalition.

The most appropriate political response to Ireland's deepening economic crisis in 2009 would have been the establishment of a national forum on the economy, something loosely modelled, perhaps, on the New Ireland Forum of 1983-84.

But, for Fianna Fail and Fine Gael, power-sharing is best for Northern Ireland.

Now, moreover, the imminence of a general election makes it less likely that the Opposition parties, licking their lips at the prospect of humiliating Fianna Fail at the polls, will subordinate their selfish party-political ambitions to the national interest.

The only crumb of comfort is that we may at least have reached the point where the option of trying to resolve the crisis by way of all-party consensus may be explored.But the likelihood is that, as has happened so often in the last two years, it will be yet another case of too little, too late.

Ronan Fanning is the author of The Irish Department of Finance, 1922-58 and also the Emeritus Professor of Modern History at University College Dublin

Sunday Independent