AT A time of crisis, the public looks to its leaders to provide direction, stability and hope. They have been dismayed by a number of Ministers and by Taoiseach Brian Cowen in particular. Instead of a firm and settled response to the threatening budgetary situation, the prospect of further fiscal uncertainty has been raised and Mr Cowen has participated in a radio interview that has further damaged the standing of his Government.
Fianna Fáil's two-day parliamentary party conference in Galway was designed to reassure and prepare backbenchers for a difficult Dáil autumn session and for a December budget that will involve further cutbacks in public spending. They were taken by surprise when Minister for Finance Brian Lenihan indicated that savings in excess of the planned €3 billion might be required. Initially, Mr Cowen appeared to play down this prospect. But in a subsequent interview on Morning Irelandhe acknowledged that while savings of less than €4 billion might be required, he did not want to pre-empt ministerial discussions on the matter.
In recent weeks, Ireland has received a great deal of unfavourable international publicity as the cost of winding down Anglo Irish Bank and recapitalising other financial institutions has risen inexorably. Questions about the State’s capacity to absorb such high levels of debt, especially as current Government spending greatly exceeds its income, were raised. At one point, the cost of Government 10-year bonds exceeded that of Germany’s by 4 per cent. Those dire circumstances may have prompted Mr Lenihan to say the Government was prepared to cut more than €3 billion in the Budget if that was found to be necessary. Whatever the reason, it reintroduced an element of uncertainty for projected Government savings and reignited debate on whether such action could prove to be counter-productive by postponing investment and growth.
The cost of winding down Anglo Irish Bank is still unknown. On the basis of information supplied in the past, however, it may be more than expected. Those funds will have to be borrowed at uncertain cost and can never be recovered. They represent a millstone of biblical proportions for the taxpayer. Financial and budgetary vagueness arising from Government bungling and indecision can only add to the cost and increase the final public burden.
The issue of whether the Taoiseach was hungover during a Morning Irelandinterview, following a late- night session with his parliamentary colleagues, does matter. This RTÉ radio programme attracts a very large public audience and Mr Cowen makes himself available for interview once a year. Given the electorate's need for reassurance and firm leadership at this time of national crisis, his casual treatment of the occasion was unacceptable. The defence offered by Minister for Tourism Mary Hanafin that the Taoiseach was "hoarse and groggy" because of a sinus complaint does not meet the needs of this occasion. Mr Cowen's performance was, at best, unedifying and, at worst, damaging to his leadership and his Government in challenging times.