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Cold Comfort from Good Samaritans

Posted on: June 13th, 2010

TWO unlikely Good Samaritans gave shelter to Fianna Fail in their hour of need on Friday morning.

Friday was the day that the banks took a breather. Instead , the nation’s most powerful political tribe took a battering. The Irish Times opinion poll gave the State’s largest party the worst result ever. Reeling at the results, the soldiers of destiny assembled in force to meet two of their executioners.

Klaus Regling and Max Watson turned up at the Oireachtas Finance Committee to explain their report on the Banking Crisis.

Committees of this sort often tend to deteriorate into partisan TDs and senators attempting to trap innocent witnesses — blissfully unaware of the political minefields — to say things that support a particular party’s point of view.

Then they triumphantly wave the words of the visitors in their opponents faces.

Friday was no different.

Opposition and Fianna Fail members vied to make Messrs Regling and Watson say something silly to support their stance on the economy. Fine Gael and Labour concentrated their questions on the past. Fianna Fail, with the notable exception of the former Taoiseach Bertie’s loyal brother — Noel Ahern — made little attempt to justify the past, but led the duo by the hand into the present. And it was surprisingly fertile territory. If Brian Cowen was watching the proceedings on the monitor in his office he might have found a moment for a rare smile.

While his troops on the committee like Frank Fahey, Marc MacSharry and Michael McGrath were teeing up the witnesses with easy questions the investigators were surprisingly obliging, serving up all the right answers. Opposition faces looked shocked when Max Watson revealed that even the IMF had failed to spot tell-tale signs of Ireland’s economic Armageddon. Fianna Fail members began to beam when Regling was even more definite, insisting that “crisis management in this country has been very good”. Then he sent them into ecstasy by declaring that the Government response had been “the best in the euro area”.

Regling had already rowed in behind Professor Patrick Honohan’s independent view that there had been “little alternative to the bank guarantee”.

Vindication beckoned the Taoiseach. Cowen’s Friday was looking up.

This was manna from heaven for the FF troops. On the day that the Labour Party had humiliated Fianna Fail, heading a national opinion poll for the first time in the State’s history, here was surprise succour. Labour had opposed the bank guarantee in September 2008. The experts were implicitly dismissing them as opportunists.

An answer to an inspired question from Frank Fahey about Nama gave Fianna Fail more cheer. Regling, again unaware of the political sensitivities, stumbled into a landmine. The diplomatic answer was that Nama was way outside his remit. Far from it, Klaus was “impressed” with Nama. He even volunteered that the Nama haircuts had been “realistic”.

Fine Gael teeth began to grind. These sessions are usually penalty kicks for the opposition. The meeting was going all wrong.

And finally Herr Regling reassured Fianna Fail’s Chris Andrews that “Ireland is not ruined” as it still had an above average European per capita income.

Fianna Fail was on a roll. Frank Fahey even mischievously asked the two independent economists to compare the state of the UK’s economy and its government response to the crisis with our own. We all knew the answer to that. The UK is in deeper doo-doo than we are. For once neither Klaus nor Max rose to the bait, seeing the danger of stating the obvious. But it was a good try by the wily Fahey.

If Cowen was watching he must have begun to lick his lips and prepare for the next spin. His luck had changed. God loves Fianna Fail, after all.

He should think again.

There is an ominous pattern in the message from the two reports and the subsequent comments of their authors. While they refused to name names they have pointed fingers. They have written and talked in code that a babe in arms could understand.

Virtually everything that happened in Ireland in the 2003 to 2008 period was wrong. After that, in the 2008 to 2010 window there was a marked improvement.

They coldly blame the Government, the banks and the regulators in almost equal amounts during that earlier period. They are effusive about the Government’s behaviour after the manure hit the fan. Fianna Fail was in power throughout that period.

So the party currently on the ropes cannot escape by taking the Cowen line that they may have “made mistakes” in the past but that they are remedying them now with courageous measures.

All true; but the guys who refuse to name names must have noticed a strange coincidence.

The period they are condemning with such commendable impartiality roughly coincides with the tenure in the Department of Finance of Brian Cowen. The period for which they are giving such plaudits coincides almost exactly with the succession into the hot seat of Brian Lenihan.

So decoded, they see Lenihan as primarily responsible for fearlessly tackling the problem, for the austerity measures, for the bank guarantee, for the public service cuts and indeed (whatever we may think of it ) for Nama. Cowen, in the dock for his time in Finance, is now reduced to piggy backing on the Minister for Finance’s initiatives. Klaus the German and Max the Brit were far too polite to interfere openly in the internal politics of another country; but the wildly different fates of the top bosses in the three spheres where they have directed their criticism must not have escaped their notice.

Top bankers’ heads have rolled, to be replaced by clones; senior regulators have exited to be replaced by a seriously independent Professor Patrick Honohan and Matthew Elderfield, a Brit without baggage; the main political culprit, the Minister for Finance at the time, has been promoted to the highest post in the land. Today he is hopelessly scrambling to pretend that the courage of his Finance Minister is his own invention. The message is not lost on the Fianna Fail troops. Nor on the public, judging by last week’s opinion poll. Fianna Fail are in a terrible bind. If Lenihan’s health holds he will be the automatic successor to Cowen. Even in his present condition he is leading the Government.

Surprisingly, Regling and Watson never spoke to Cowen during their probe.

They did meet Finance Minister Brian Lenihan. Their refusal to make nakedly political judgments is understandable. Yet they have sent a coded message of cold comfort to Fianna Fail.

It will be fascinating to see if the soldiers of destiny act upon it.