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Dan White: Follow Ray's advice -- and put yourself

It was by any standards an impressive performance. Just days after being diagnosed with pancreatic cancer, the details of which were then prematurely disclosed by TV3 on St Stephen's Day, Brian Lenihan came out fighting.

After getting a diagnosis like that, most of us would still be in shock as we digested the possible implications. Brian Lenihan is obviously made of sterner stuff.

While his bravura performance will have further raised Lenihan's stock with the Irish people, important questions remain. During the course of yesterday's interviews, the Finance Minister intimated that, with the 2010 Budget now out of the way and no further budgets planned until next December, his workload would be easier in the first half of 2010 than it was during his first 20 months as Finance Minister.

Any easing off of the Finance Minister's workload is likely to be purely relative. While the sense of panic and despair which gripped the nation in the first half of 2009 has now gone, more, much more, needs to be done before the Irish economy can be said to have recovered from the current depression.

While Lenihan won't have to worry about framing the 2011 Budget until mid-year, NAMA, which will commence operations shortly, can be relied upon to take up most of the resulting slack in his schedule.

Ever since Lenihan unconditionally guaranteed the deposits and bonds of the Irish-owned banks in September 2008 the Government has set its face against nationalising them. This is despite the fact that the Irish banking system is effectively bankrupt with the Government having had to pump in €11bn of fresh capital into AIB, Bank of Ireland and Anglo Irish.

Loans

Instead of taking the banks into state ownership, the Government has devised NAMA, a "bad bank" which will purchase bad loans from the banks with a book value of €77bn for €54bn.

When Lenihan first unveiled his plans for NAMA last April the new organisation was widely seen as an alternative to nationalisation. Not any more. As the likely extent of the banks' loan losses continues to balloon, NAMA will almost certainly, by crystallising even further loan losses, trigger further capital injections from the state.

This is likely to result in AIB and the merged EBS/Irish Nationwide/Permanent TSB ending up in majority state ownership (Anglo has already been nationalised) and the state shareholding in Bank of Ireland also rising dramatically.

As if that wasn't enough to have on his plate, the 2011 Budget, which is likely to include new property taxes and water charges as well as a complete overhaul of public-sector pensions, will be just as politically tricky as last month's production.

Unlike new or increased income and excise duties, introducing a new property tax or water charges isn't as simple as merely waving the administrative equivalent of the magic wand. A new property tax will involve valuing every house in the country while water charges will mean installing water meters in every home. These are mammoth tasks which, unless they are properly planned and executed, could well result in fiasco.

In order to reduce his workload Lenihan has decided not to take on any outside public speaking engagements. He should go even further.

Besieged

When he returned to the Department of Finance in 1987 Ray MacSharry, remembering how he had been besieged by lobby groups during his previous spell as Finance Minister in 1982, instructed his private office that he no longer wished to receive delegations personally and that in future they should communicate with him in writing.

After three weeks of mayhem on the switchboard word got out that the Minister was not for turning.

From then on, MacSharry likes to recall, being Finance Minister was the easiest job he ever had!


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