Tuesday 21 May 2019

Cowen finally walks the walk

WHATEVER your opinion of the National Asset Management Agency, the outcome of the Lisbon Treaty referendum or Budget 2010, you have to admit that Brian Cowen's Government, despite being probably the most unpopular in the history of the state, is managing to get a lot done.

Indeed the Taoiseach has come through the torrid 100 days since he first spelled out the three challenges by which he would be judged.

It has been a dreadful period, in political and economic terms, but Brian Lenihan's Budget has meant that both he and the Taoiseach are now seen as being prepared to face up to the tremendous economic challenges, regardless of the long term political consequences for themselves.

The Minister for Finance had two audiences on Wednesday. One was the Irish public, intent on a Budget which would affect individuals like no other in memory. Then there was the international audience, all too aware of the €22bn gap between what the Government raises in taxes and what it spends on running the country, and our borrowings of almost €1bn a month.

If many people here at home are still feeling stunned, international investors appear to have given the Government's actions a vote of confidence, shown by a surge of support for Irish Government bonds.

Mr Lenihan stated repeatedly that the €4bn savings announced in the April Budget were absolutely essential, as agreed with the European Commission. In the days leading up to the Budget, events created the impression that the Taoiseach's resolve might be wavering.

If the markets had been left with the impression that the Government lacked the political will to reduce spending, the Taoiseach would not have been able to declare at yesterday's summit in Brussels that the Budget had been well received as a successful first step in an ongoing strategy.

The way forward is now clear. Whether they be called reform or transformation, ways have to be found to increase productivity and competitiveness in the public services. And Brian Lenihan has to continue down the path of substantial adjustment.

We may have turned a corner, as the minister says, but further corrective action will be needed in 2011 and 2012.

This week's strong start could be undermined by any weakening of resolve.

Irish Independent

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