Bamboozled by Budgets, Banks and Bailouts? Businesses will lead Ireland’s Resurgence

By Alan Foy on November 30, 2010 in Business

This is a sad week to be Irish, wherever you may be in the world. Our country’s economic and financial vulnerability has been exposed and the lack of leadership in our political classes has been cringingly on view for the world to see. I’d be surprised if most Irish people didn’t feel embarrassed and hurt by the events of the recent weeks.  It appears that our European partners (creditors) have come to our rescue and that the IMF/EU bailout is a fait accompli.

However, the choices and jockeying for position made by our political leaders (across the party spectrum) have almost fuelled the embarrassment of the typical Irish person. At a time of national distress and emergency, it appears that politicians in this country are grossly unaware of their national duty to leave party politics aside, lay down their differences and knuckle down to work together and agree creative solutions as a cross-party national government.

The infighting and cross fighting of our political “leaders” has left me baffled and reinforces the perspective that we are unable to coordinate our own affairs.  It’s time, I believe, for our Taoiseach, Brian Cowen, to recognise that he is vastly out of his depth and must now resign. His resignation papers should be handed to our President and she must form and install a Council of State with suitably qualified personnel to manage the country’s affairs for at least the next 6 months. At this time our country needs stability and it appears that this may be the last, only viable solution open to us.  This is an emergency situation and requires an appropriate response.

Our government has agreed to bailout terms which seem very expensive but we don’t have full visibility on exactly what’s been agreed. Many have commented in the media that our €85bn package falls far short of the total sum required over the next number of years. This may indeed be true. 20% of this bailout will actually be pulled from our National Pension Reserve Fund (NPRF), one of the few assets we have accumulated as a nation over the last number of years.  The issue though, I believe, is that the average Irish person does not know the extent of the problems facing our country, or for that matter, who the senior bondholders we’re protecting in our banks actually are. Haircuts or no haircuts, the Irish people need transparency at this difficult time.  We don’t have full visibility and we are repeatedly being left in the dark.  In my view, there’s no point prescribing the medicine without first advising the patient of the full diagnosis.

Notwithstanding the above, I believe that we can get out of this mess by deploying the appropriate talent, decisiveness and corrective action.  We have an amazingly talented pool of individuals in the business classes of this country. We have some of the most creative minds in industry and enterprises across the state. The really unfortunate thing is that none of them went into politics.  The brightest and the best steered well clear of Dail Eireann which is a crying shame. We need to reform our political system to encourage the participation of talented individuals who have the competence and talent to be more than just strong orators.  We need strong negotiators, commercially savvy and expert individuals in our political classes. We need to fundamentally alter the structure and political systems we employ to facilitate the introduction of that talent.  We need to make the choices required to reduce the size of our political institutions and to reflect a fair, balanced representation of perspectives.   The days of nepotistic behaviour, and tweedle dums and tweedle dee politics need to end, today.

It’s not all doom and gloom of course.  We have a vibrant entrepreneurial and business base with some of the best companies in Europe – each of which punch above their weight on an international scale, on a daily basis.  We need to encourage, not stifle, the innovation and productivity of our private sector.  We need to support entrepreneurs as they grow and scale their businesses with the full might of supports we can reasonably offer. To do this, we need a pro-business government that recognises the value of supporting SME’s.  We need to mandate that institutions (public and private) support them in every way possible.  A clear vision and trajectory for this support need to be presented and the role the banks must play should be clearly explained, to them and to entrepreneurs!  Among all the “talk” about bailouts, commentators, politicians and senior civil servants must clearly present a stated objective and plan to ignite the entrepreneurial base once more. We forget that the engine of growth of this Irish economy is the Small to Medium-sized Enterprise (SME). These companies and firms, and the great people they employ represent Ireland’s only path to economic and fiscal resurgence.   What are our leaders doing to assist in this renaissance?

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