Bruce Arnold

Critic of Public Affairs, writing about art, theatre, music and politics

This Government has discredited Ireland

It has become a vital need of the Irish State to hold an election and achieve a new mandate for government that will allow the shaping of a plan that satisfies the people of this country that they have clear leadership and know where they are going.

This is not possible under Brian Cowen, whose political credit has long since run out. Nor is it possible under Fianna Fail -- a party whose confusion is immense and whose alternative leaders have produced nothing either clear or reliable in terms of a replacement policy for the one that Cowen tried, ineffectually, to follow.

Collectively, the party, from Brian Lenihan through all members of the Government, are on a wrong course and have lost international credibility and support just as they have done domestically. In light of this, the idea of charting a way forward, even into the early months of next year, is a non-starter. As for a four-year plan, forget it. New minds and new faces are needed for that. More than that, as I have argued for many months past, a new party is needed that will provide the cutting edge that is not evident in the present Dail.

When Cowen took office as Taoiseach, on May 7, 2008, he was already compromised and in the shadow of a flawed and largely disgraced predecessor to whom he offered liberal and sanctimonious praise on the occasion of his own Dail election as Taoiseach. He was also compromised, much more seriously, by his commitment to protecting the Fianna Fail party at the country's expense.

He gave an upbeat account of everything in sight. He said, "the influence of the EU project has been all pervasive across every aspect of our lives", little realising the coming irony of that submission. There is hardly a sentence in the whole speech that does not pullulate with the shameful tremble of self-mockery. How far back in the past does this gem echo its absurdity? "We are admired and respected as a progressive country throughout the wider community of the developed world."

Instead, we face, as a noted international commentator said this week, "a bond crisis snowballing out of control" and "a confidence crisis (which once it) takes root starts to contaminate everything, as we are seeing in punitive borrowing costs for Irish banks".

This commentator demonstrated that even he had been wrong in suggesting Ireland had taken control of its future, citing Karl Whelan's forecast of a high probability of "the horrible humiliation" of Ireland in the hands of the International Monetary Fund, a view also endorsed by Colm McCarthy. Their opinion, expressed by Whelan in the words "they have taken far too long to admit the scale of the fiscal problem that we are facing", is only too true.

An eminent Swiss economist told me: "Ireland needs to know the truth. Only new people in government will be capable of delivering the truth. The bond market worldwide is not intrinsically evil, but it is unbelievably harsh when it loses confidence. Truth produces confidence. And your current administration has proven they can create all sorts of headlines, but the one headline they will never publish is truth."

Cowen knew that the fiscal roof was falling in when, as Finance Minister in late 2007, he involved himself in the Anglo Irish Bank crisis, setting up a kitchen cabinet to advise him on the detail and provide information about the bank's circumstances. Even then, the bank's fate was becoming perilous. Cowen claimed that he first heard of the problems in Anglo-Irish in September 2008. Yet he was at an Anglo Irish board dinner in April of that year where the discussion was exclusively about the problems faced by Anglo Irish Bank.

A major contributor to these problems was Sean Quinn, of Quinn Insurance. Quite openly and deliberately, in Cowen's presence, the discussion was focused on these financial difficulties. These were seriously aggravated by heavy gambling at the time with Contracts For Difference (CFD) which ultimately came to represent a quarter of Anglo Irish Bank shares.

Cowen promised intervention with the National Treasury Management Agency in order to get them to put deposits with Anglo. He knew this was necessary. Despite Cowen claiming he had told them to step in, the NTMA failed to follow this course.

The Financial Regulator, who has been generally characterised in the media as having been asleep at the wheel, was in fact in close contact with the bank and knew what had to be done. His hand was stayed, however, by sustained protection of Sean Quinn. Fianna Fail, including Cowen, were lobbying for Quinn. The Financial Regulator knew that Quinn was taking money from his insurance company -- picked up by the bank's auditors, PWC of Belfast -- and that this was illegal on two counts. However, Quinn was "untouchable".

The Financial Regulator, the Department of Finance, Morgan Stanley and Anglo Irish Bank all knew that the CFDs spelt death for the bank and the regulator should have picked up on them.

Instead, the Financial Regulator, the Central Bank and the Department of Finance, with Cowen's knowledge, were allowing Sean Quinn to take money from his insurance company and gamble it through the bank.

They were even pressurising Anglo Irish Bank to place the Quinn stake. On all actions taken, the bank and Morgan Stanley kept them informed.

To demonstrate how up to its neck the Financial Regulator's office was before the placing, at one meeting Pat Neary told a member of the bank's board that Sean FitzPatrick was talking too much and too openly about the Quinn stake. This member was told to tell him to "shut his mouth". It was alleged that if it got out "there could be a run on the system". According to one source, "a member of the Central Bank board had overheard Seanie at some party spouting on about Quinn and brought it back into the Central Bank boardroom".

This all represents the most blatant and most damaging example in recent Irish economic history of the State's interests being placed second to an internal, private involvement of politicians and of servants of the State. The idea of them remaining in office any longer is repulsive and objectionable to all right-thinking Irish men and women. They must go. When they do, the State must be reinvested with men and women who speak the truth and act in the interests of the people.