Nat O'Connor: One of the clear risks to Ireland's economy and society is that we can go back to business as usual. In fact, if we don't make any particular effort to do otherwise, we are more likely than not going to slip back into bad habits, old networks and 'traditional' ways of doing business. Indeed, the IMF's mission chief, Ajai Chopra, is quoted as warning that it's important in boom times to be wary of claims that 'this time will be different' in respect of the risk of a crash. There is no better example of this risk than Ireland's obsession with secrecy. We can either continue to accept that politicians, bankers, devleopers and clergy 'know best' and so we don't need to know; or we can demand a new way of doing business: transparently.
A major cause of the ongoing banking crisis has been the drip-feeding of information from the banks, and the lack of total disclosure on just how bad their books are. One welcome aspect of the IMF's visit will be a forensic examination of the banks once and for all.
Meanwhile, the Governor of the Central Bank has been praised for giving clear information about what's likely to occur with the IMF, and why.
The Taoiseach said that the Governor's view did not necessarily reflect that of the Government. “The governor gave his view. He is entitled to give his view.”
The Taoiseach is quite right. The Governor is meant to be an independent officer of the state, and he should speak independently. What is wrong is that the Government chooses not give an equally clear (albeit divergent) explanation of the situation. Instead, the Taoiseach continued that "we have to determine what is the best option for our country and for our people at the time." In other words, the Government will decide for us - not with our participation in the discussion.
The Minister for Finance told the Dáil yesterday that "If the Government has been reticent in making public comment, it has been in the interest of protecting the taxpayer".
The Minster continued "Jumping to conclusions ahead of the facts is not to the benefit of the taxpayer, nor is it in our interest to do this in advance of the discussions that are now taking place." It is entirely reasonable that the Minister cannot be expected to have all facts to hand, but he can be expected to explain what he knows and what he intends to do.
It would be healthier for Ireland if we had a multitude of voices and a competition of ideas, based on expert knowledge and evidence. This would not threaten the Government. Yet, people in Ireland often have to look to foreign media for more balanced and varied coverage on our own crisis!
It is a cliché that we are living in an information age. But some practical implications of that are that it is easier than ever to access people's academic writings or more personal musings in blogs or newspaper articles. Hence, we can make up our own minds what we think of our 'leaders' and their point of view.
For example, there is no need for the IMF's mission chief, Ajai Chopra, to be a mystery. We can read his blog to get an idea about his analysis of economic matters. And we can look back over his previous work, such as his analysis of Korea in 2001, which has some similarities to the Irish case. He acknowledged then the need for growth stimulus as part of budgetary measures, and cautioned about austerity measures that were damaging to economic growth: "We are not advocating irresponsible fiscal policy. At the same time, however, there is a danger if fiscal conservatism is carried too far as it could exacerbate the downturn in the economy."
In a similar vein, transparency can bust the exaggerated myth of our lost sovereignty; for example, John Bruton's lament. He said "We’re now in a position where we’ll still be making the decisions but we won’t be making them on our own, we’ll have others looking over our shoulders". And what's the problem with making decisions in the open, and accepting comments on them?
Based on its track record, the IMF team is not going to tell the elected Irish Government what to do in the four-year plan or the Budget. It may advise or give a technical opinion, particularly on what they believe will or won't work. But national sovereignty over the choice of tax measures and cuts to public spending remains firmly in the hands of the Government and the Dáil. Any attempt to blame the IMF for directing cuts towards lower income families or people who depend on social welfare will be untrue. All the IMF can do, if announced austerity measures are not followed through on, is suspend access to the money we want them to lend us. But if we meet our targets on closing the deficit, than we'll be able to borrow. And a growth strategy must be part of our plan.
The Taoiseach has denied talking in riddles about the current situation. "Work has not been sufficiently completed, or options put before the Irish Government in sufficient detail, for us to decide what our ultimate position will be. We are engaged in those discussions in an open and transparent way," he said.
What this comes down to is that the Government does not appear to believe that its duty is to tell people what is going on, to explain or clarify the understandable confusion and worry about the arrival of the IMF. The Government will announce its decision, once that decision has been made.
We have a choice for the future. We can accept the old style of leadership from behind closed doors, or we can demand that in future our political leaders have a duty to tell us, in clear terms, what is going on and what our options are, before they make a final decision that may burden a generation with debt.
In this context, the Irish Examiner makes a worrying claim: "The EU-IMF investigators will uncover significant fraud and corruption in their examination of the Irish banking sector according to a leading European economist who worked with the IMF."
Ireland's banking sector is "not like the USA with a highly complicated system. Its simply three to five banks with loan books. It’s typical of what can happen in a small country where everyone knows everyone and as long as everything is going well, nobody notices," said Dr Gros.
"Iceland found that senior politicians, regulators and bankers were all at fault for bringing down the country’s economy." And Dr Gros fears something similar will be discovered here.
It is perhaps not surprising that during his first meeting with an Oireachtas committee, the open-speaking Governor of the Central Bank called for an inquiry into how the crisis began, in order to get to the root causes and to make sure we don't go back to business as usual.
By way of contrast, the traditionally secretive UK Government is today making available data on 195,000 items of spending for the first time ever. The Cabinet Office minister said "This government has the clear ambition is to make the UK the most transparent and accountable country in the world." The Guardian has a live blog on the experiment and diverse opinions on the benefits of openness.
Dr Nat O'Connor @natpolicy
Nat O’Connor is lecturer in social policy in UCD’s School of Social Policy, Social Work and Social Justice and part-time policy specialist at Age Action Ireland. Previously Director of TASC, Nat also led the research team in Dublin’s Homeless Agency.
He has taught politics and social policy since 1999. He has a PhD in Political Science from Trinity College Dublin and a MA in Political Science and Social Policy from the University of Dundee. He is a Fellow of the Higher Education Academy (UK), a member of the National Economic and Social Council (NESC) and chairperson of the Irish Social Policy Association (ISPA). You can find him on LinkedIn (natoconnor) and TwitterX @natpolicy
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