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Farewell To The Shamrock

Posted on: March 26th, 2008


MONDAY: the scene is the White House, Washington. The financial world is facing its worst crisis since World War Two. It is also St Patrick’s Day.

Today, you would have to feel a twinge of sympathy for a besieged George Bush.

Imagine the pandemonium in the Oval Office: President Bush, Secretary of State Condoleeza Rice and Treasury Secretary Hank Paulsen are locked in crisis talks; the world’s financial markets are tanking; the dollar is imploding; Bear Stearns, one of the biggest investment houses in the US, has just gone belly up; a massive rescue operation has been launched; Gordon Brown is on the blower; the Bush family fortune is on the line.

There is a knock on the door. “Come in” bellows the President, hopefully anticipating the arrival of the cavalry. Maybe it is Fed boss Ben Bernanke, or possibly the old master Alan Greenspan, even Warren Buffett riding to the rescue of the US economy.

The door opens: Enter a well-known Drumcondra “accountant”.

There is a gasp of disbelief.

Not quite the man for the moment.

I guess the last figure George Bush wanted to see knocking at his door in the middle of the market meltdown was that of Bertie Ahern bearing a bowl of shamrock.

Bush probably recognises Bertie these days because he turns up like a bad penny at the same time every year, but Bertie hardly rates at the top of the White House crisis- management list.

Still, the shamrock opens a few doors in the US. While Bertie was charging into the White House, the entire Irish cabinet invaded the corridors of power in the main cities of America. Hopefully, if they carried a shamrock in one hand they brandished a microchip in the other.

Fortunately (and it was only by good fortune), the US was the only game in town last week. A lucky place for the Cabinet to land. In theory, at least.

Ireland‘s leaders had arrived at the centre of the world’s financial action. So their festive air must have been a confounded distraction for every state governor, congressman and senator trying to steady the nation’s nerves.

Last Monday was hardly a time for shamrocks and shillelaghs.

No doubt the 13 ministers who swamped the US were determined to impress their preoccupied hosts with tales of our economic triumphs, just at the very moment that Ireland was sinking like a rudderless ship back home.

There was a skeleton cabinet left here, as 34 ministers departed for the diaspora. The skeletons were Minister for Defence Willie O’Dea, grounded to ensure that Ireland was not invaded by aliens, while fellow-minister Seamus Brennan was camped in Dublin South as reinforcement.

These Fianna Fail twins — of small physique — would hardly make a fearsome brace of bouncers at a nightclub, let alone defenders of the national territory.

Willie and Seamus must have watched in wonder as Ireland‘s economic dominoes dropped one by one. And apart from the two boyos, there was no one available to reassure the Irish people that the economy was fine and to deny that the banks were about to go bust.

The dramatic events in the US were more than germane to Ireland. Identical incidents were happening at home. Never before had the woes of the global economy been so obviously the woes of Ireland too. An eerie reality was being born.

For nearly 15 years Ireland has disproportionately benefited from the boom in the US, the strong dollar and sterling, the advent of multinationals and the International Financial Services Centre.

Last week, the downside of the same global coin surfaced in spades.

As Bear Stearns sank, we suddenly realised that we too had a branch of the same bank in our IFSC. As worrying rumours spread about giant US banking house Citigroup, the penny dropped that it is an anchor tenant in the same centre. Financial services have a transatlantic reach.

Later in the week, the assault on HBOS shares in London was also an assault on HBOS Dublin, one of our most aggressive retail banks; similarly the highly influential Lex column in the Financial Times fingered global minnow (but fallen Irish icon) Anglo Irish Banks as vulnerable to a commercial property slide; its shares tumbled by 15 per cent. Ireland has arrived as part of the global financial universe, but there is a price to pay for the transformation.

The collapse in the mighty dollar and the fall in sterling means Ireland‘s exports are climbing a steep hill; the credit crunch in the US has curtailed bank lending in Ireland; a young Irish entrepreneur appeared on Prime Time to relate how he could not borrow any money, his business was paralysed.

Elsewhere, the spike in global oil prices was fuelling Irish inflation. Worse still, it put a dampener on Ireland‘s most spectacular business success. Ryanair, the proudest flagship of the Celtic Tiger era, saw its shares take a pounding in response to savage international selling.

And we are even catching the same contagion as everyone else. As the UK rumbled a few sharp market practices and began to investigate false rumours being spread to depress share prices, the Irish Regulator played catch-up and decided to follow suit. Unsavoury dealing activities know no borders.

On Thursday, Irish bank shares rocketed in response to an apparent move to end market manipulation. The suspicion was growing: the global market rogues were operating here in the land of the shamrock.

We are uncomfortably exposed as a pretty powerless economy. The US, the UK and Brussels dictate our economic health. Sentimentality and the shamrock are out the window. Today it is far more important that we keep Intel rooted in Leixlip than that we nostalgically retain Guinness at St James’s Gate.

The volatile events in the US have helped and hindered Ireland. We are a dependent nation.

Back in Leinster House as ministers jetted around the world, there was hardly a government member in sight to explain the global crisis to a bewildered Irish people.

Where was the accountant, Bertie Ahern? Finance Minister Brian Cowen, was in far-off Korea. Ministers were scarce.

RTE’s Prime Time, the News and Morning Ireland were reduced to economists and- worse still — the squeaky bleating of the eunuchs from IBEC. The crisis provided a field day for the old malcontents and moaners like the Irish Exporters Association, demanding government action. The government is impotent on currency movements.

It was left to George Lee, Pat Kenny, John Murray and a few other calm commentators to offer enlightenment.

The Dail was in recess. No help from there. In the Seanad, Environment Minister John Gormley (who was available as he had only travelled as far as London) gallantly handled Health matters although it is not his portfolio. Government came to a halt, just when it was most needed.

At a time when the economy demanded a guiding hand, economic ministers were missing.

Presumably they were still overseas promoting the Ireland of the shamrock.