THE GOVERNMENT is expected to name the investigator for one of the two “scoping” inquiries into the banking crisis by the end of this week.
Minister for Finance Brian Lenihan said last week the investigator would be named “in a matter of days”. He had a number of people in mind, he said, but would not be drawn on identifying them.
The second inquiry will be conducted by the governor of the Central Bank, Prof Patrick Honohan. The two preliminary inquiries are due to be completed by the end of May. A commission of inquiry will then be established and asked to report by the end of the year. Its terms of reference will be set by the Oireachtas but its proceedings will be conducted in private.
Following Taoiseach Brian Cowen’s prediction of economic growth in the second half of the year, it has also emerged that Alan Ahearne, the economic adviser to the Minister for Finance, believes that Ireland may officially emerge from recession this quarter.
In background briefings for recent public lectures, seen by The Irish Times, the economist suggests that economic activity this quarter may be stronger than the fourth quarter of last year.
Activity remains weak, he conceded, but early evidence from this quarter is that it is no longer falling but has stabilised and may be rising.
Comparing the situation to January 2009 when the outlook was “extremely grim” for the banks and for the economy, he said the economy had made huge strides.
He predicted that half of the Nama loans will be transferred by the end of April and that, by then, the banks that are well capitalised will be “able to facilitate the increasing demand for loans that will go hand-in-hand with economic recovery”.
According to the briefings, which are generally upbeat, Ireland may also be in a strong enough position within two years to be no longer associated with the “PIIGS” group of European countries (Portugal, Ireland, Iceland, Greece and Spain), so-called because they are seen as the most vulnerable.
Dr Ahearne pointed to the news that the crisis in Greece was deeper than had been thought. The “contagion” caused by the disclosure spread to Spain and Portugal in terms of poorer interest rate spreads, but notably not to Ireland, he noted.
That suggested that Ireland had reacted more flexibly. Conceivably, in two to three years’ time, it may have improved sufficiently to be grouped in terms of the performance and strength of the economy with the Netherlands, Finland and Belgium, he said.
Meanwhile, the president of the Law Reform Commission, Mrs Justice Catherine McGuinness said yesterday it was important that the inquiry should have the confidence of the public.
“I think it is important to have the confidence of the public and I don’t think they are confident about something that’s going to be held entirely in private,” she told Newstalk.
She said the commission had published a report on improving the tribunal system to make it less expensive and less time-consuming.
Senator Eugene Regan presented Fine Gael’s formal complaint on Nama to the European Commission in Brussels.