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Merkel won’t interfere with our ministers’ toys

Posted on: March 30th, 2015

No one is tactless enough to mention that we have Britain and America, our two biggest customers, to thank for booming exports.

No one mentions that we have emigration to Canada and Australia to thank for the lower jobless figures.

No one gives credit to the multi-nationals for holding the baby during the bad years.

Happy days are here again . Here comes the boom. Here comes the election. And here comes the bust.

Europe will allow us to take our feet off the brake for the next budget. An election victory is not a bad pay-off for the Rainbow’s obedience. Mrs Merkel knows that Enda, Michael, Joan and Brendan are pushovers.

For Angela Merkel, the alternative is too awful to contemplate. She might open a second front, find another Greek Syriza on her hands. Or even a few independents.

So she will give Ireland’s oligarchy a bit of leeway to buy the election. They will be allowed to break the rules in next October’s budget. That will be their pay-off for sinking the knife deep into poor Greek Premier Alexis Tsipras’ ribs. Then, a few weeks after Easter 2016, she will put her stiletto back on their throats.

That will be the deal. The economy will benefit short-term, but suffer long-term.

Ireland will have little to do with the future of the Irish economy. She will leave us to play with the harmless toys, to do what we do best, to manage the diseased state companies known as semi-states, and state agencies commonly called the quangos.

The Government is not going to throw the semi-state toys out of the pram. They simply love them. They love monopolies. They love utilities. And above all, they love patronage.

Mrs Merkel has left these little toys intact – comfort zones for the toddlers that pretend to run the Irish economy.

Not long ago the Government committed a sin in the semi-state playground that was so mortal that even a tribal Irish coalition had to emerge with its hands up. It surrendered – but only after a brazen attempt to parachute John McNulty, a Fine Gael loyalist, on to the board of the Irish Museum of Modern Art (IMMA) to qualify him for a Seanad by-election, was rumbled.

The Government came out all penitent. It admitted mistakes. It would never happen again. An independent, Gerry Craughwell, stole a Fine Gael seat.

Meanwhile, Craughwell has emerged as a ground-breaking hero who beat the system. Perhaps he may have forced change? Perhaps there will never be another IMMA?

Sadly all the signs are that no lessons have been learned. The Government responded to the debacle by donning sackcloth and ashes. They admitted mistakes. Standards were not up to expectations.

Corporate governance rules in commercial and non-commercial semi-state bodies were woeful. And they remedied them.

It was not clear whether they felt semi-state profits and performance might suffer due to the lapses or if they were merely circling the wagons. Anyway we were assured that we would never see another IMMA.

And if you believe that . . .

Last week, Brendan Howlin, Minister for Public Expenditure and Reform was answering questions I put to him in the Dail about the total paid to directors of semi-state bodies.

He was unable to provide the answers, but they will come soon from each department. He did manage to point me in the direction of the measures taken to bring about a complete change to semi-state appointments since the McNulty affair. He quoted selectively from the new ‘Guidelines on Appointments to State Boards’ issued since McNulty was forced to withdraw from IMMA.

I am sure the minister never expected any TD to read the 10-page document languishing in the Oireachtas Library. But it was interesting to examine their new Bible, the semi-state code of corporate governance, open appointments – and presumably better profits – for the dinosaurs.

Never has a finer piece of camouflage been created. It is nine pages of cover and waffle. In the middle is buried one full page of exits from the new rules. Get out of jail cards for political patrons.

The good stuff first: all State appointments must now be advertised. Interviews will be held by the independent Public Appointments Service (PAS). There must be a high degree of “transparency”. A website portal – stateboards.ie – will be opened. There will be strict, open specifications for each job. The PAS will give the minister a list of candidates. He or she will choose from that list. Well . . . er, sometimes.

Nine pages were fig leaves to cover the meat in the middle. Why had none of us read the meaty bits? Possibly because the cover was so indigestible. Or were we convinced that appointments to Government-run businesses had finally been reformed? Maybe a blow had been struck for the entrepreneurs in the world of the dinosaurs.

An ominous heading lurks in page 4 of the guidelines. It is headed ‘Exceptions’. Paragraph 9.14 is dynamite.

The minister may ignore the rules where he or she “has independently identified a person who is evidently and objectively highly qualified and capable of effectively discharging the role of chair of a State board and who has not otherwise applied through the stateboards.ie process.”

So the process of appointing a chair is totally bypassed. The minister can appoint any old crony he likes, provided he dresses it up in flowery, impenetrable cliches.

So that covers the chairpersons. What about ordinary members of State boards? How can they escape the ‘new’ regulations?

Look a little lower on the same page: “If there are some particular features of a specific State board or a particular role on a State board which in the view of the relevant minister necessitates its exclusion from the new appointments’ system for State boards, Government approval should be sought for the derogation. If granted, the reason for the exclusion should be published.”

All directors are through the hoops. Ministers can appoint whoever they like to any State body. Happy days are here again. This time the escape routes are buried in the middle of five pages of manure.

Other ‘Exceptions’ include the directors of State-owned banks, reappointments where the minister is happy with the serving director, North-South bodies and other juicy numbers.

Ministers must be breathing sighs of relief. They will still be able to appoint their cronies to State bodies whenever they like. Strangely enough, no other party pointed out that the new guidelines were a fiasco. They all know the game. It will be their turn in time.

Mrs Merkel is certain to allow them to indulge themselves in the semi-state playground as long as they obey her on the macro stuff.

And they will. A few years ago – when in opposition – Health Minister Leo Varadkar identified 2,416 directors of quangos. Nearly all were drawing juicy fees. Last week Brendan Howlin was unable to produce much information on the amount paid out by the State to these political favourites. On Friday I received an answer from the Department of Communications, Energy and Natural Resources. About €2m was probably paid out to these political proteges in fees.

There are no performance evaluations for these political appointees. Echoes of the old days in the City of London, when non-executive directors of publicly quoted companies, appointed by virtue of their membership of the old boys network, were known as the “Grunt a Month” brigade. After they had rubber-stamped the management’s decisions, they headed for the monthly lunch. They were usually nodded through the AGM by institutional shareholders.

Nothing so taxing awaits our commercial semi-state protegees. They remain appointed by the minister, re-appointed by the minister and never dismissed by the minister. Mrs Merkel has bigger things to do than to interfere with the puppets in the ministers’ playpens.

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