`If we had defaulted how strong would EU solidarity be now?'

Friday interview: John Moran, former Department of Finance mandarin

John Moran, the former mandarin who was at the heart of some testy exchanges with EU paymasters during Ireland's bailout years, may be an unlikely steadfast Europhile.

But his faith is undented. So much so, he's the driving force behind a planned series of EU seminars and exhibitions in Limerick next year, known as European Expo 2020, centred around an exhibition from a European Investment Bank art collection to be hosted in venues around his native city.

“I don’t think that Europe necessarily made all the right decisions during the bailout years,” says Moran in an interview at The Irish Times at the launch this week of the expo at the Hunt Museum, where he is chairman. “But I think they were learning as we went through a crisis of an unprecedented scale.”

The battle at the start of the decade to lower interest rates on the EU element of the €67.5 billion rescue – which also involved the International Monetary Fund (IMF) – was particularly torturous, as Brussels bureaucrats and EU leaders sought to teach Ireland a lesson and make sure it didn't become addicted to aid, he says.


“But I do think what happened during that time was a reinforcement of solidarity between the EU and the countries that were in trouble. And it also saw Ireland reaffirm its loyalty to Europe. I wonder, if we had adopted a different approach during the crisis, like defaulting on debt, how strong EU solidarity would have been with us on Brexit in the last two years in the face of demands from the UK government?”

Bringing the EU closer to the people is only one of a number of projects the 53-year-old is currently juggling. The lawyer-turned-banker, who would become secretary general of the Department of Finance during the Troika bailout years, is also involved in efforts to tackle some of the more intractable legacies of the crisis: as interim chairman of the Land Development Agency (LDA), established last year in a bid to address the housing crisis, and a strategic adviser to UK debt recovery group, Arrow Global, which sees itself among the more ethical firms circling problem mortgages in Irish banks.

Added to the mix are three Georgian house renovations he’s working on in the Shannonside city and chairing the Liveable Limerick movement. “If you look at everything I’m involved in, there’s always a challenge at the heart of it,” he says. “That’s what excites me.”

Son of a farmer and builder based outside the city, Moran’s early education was at St Paul’s primary school in Dooradoyle, where former finance minister Michael Noonan’s wife, Flor, was a teacher.

He went on to study law in University College Dublin in 1983, before going to the US at the age of 21 to join Wall Street corporate law firm Sullivan Cromwell and take the New York bar exams.

Returning to Ireland in 1990, he went to work as the in-house lawyer for Tony Ryan's aircraft leasing group GPA that would go on to collapse following an abortive stock market flotation during an aviation downturn after the Persian Gulf War.

Huge bearing

Both early positions have had a huge bearing on Moran. “The size of the deals Sullivan Cromwell was involved at the time were enormous by Irish standards. So, from that moment on, I wasn’t going to be frightened by the scale of anything,” he says.

“And then, coming back to work for GPA meant you were joining a company that had already passed the question of why couldn’t the largest aircraft leasing company in the world be based in Ireland.”

On Ryan: “He was really charismatic, a great leader. But the flaw in that business plan was there was a belief that it could never fail. The failure of GPA was that, while there was a long-term growing demand for aircraft, it committed to buying them as if there was never going to be a bad downtown. If it had just simply decided to pay a little bit more to buy options to purchase those aircraft, we’d still probably have GPA out the road in Shannon.”

The lessons for Moran was clear. “There will always be a downturn and you have to be open to the contrarian view.” It’s something an awful lot of people in Ireland would learn about a decade-and-a-half later.

Moran worked with Irish law firm McCann Fitzgerald for three years to 1994, working mainly in its New York office, before joining Zurich Financial Services, where he helped set up Zurich Capital Markets in Ireland.

Then, if you are to read his official CV, there is a gap of five years from 2005. That’s when he took off to the southwest of France and renovated three medieval houses and set up two juice bars.

"It was the best career decision of my life," says Moran. "It meant that, by luck, I didn't become involved in the crazy stuff that went on in the boom. So, when I came back in 2010 and joined the Central Bank, and subsequently the Department of Finance, I wasn't in any way compromised by decisions I'd made prior to the crisis."

Moran jokes that his return was down to the fact that he’d found out the hard way that there are easier ways to making a living than trying to set up a chain of juice bars. “But seriously, I felt I had the skills and experience that could help make a difference. And if ever there was a time to put my hand up to do so, it was 2010.”

He came back originally in the middle of that year to become head of supervision for wholesale banks – mainly overseas-owned lenders based in the IFSC – but was subsequently seconded in March 2011 by Noonan, then newly-appointed finance minister, to help sort out the domestic banks, under the EU- IMF troika programme.

A year later, Moran was put in charge of the whole department, succeeding Kevin Cardiff, a career civil servant, who went on to join the European Court of Auditors in Luxembourg.

Ruffle feathers

The appointment of an outsider was enough to ruffle feathers in the department, which was struggling with its own shortcomings in the lead-up to the crisis and found itself at the epicentre of the bailout programme. But all the more so because of the type of character Moran is – self-assured, ambitious and an ideas man, with a penchant for the limelight.

Some department staffers recall their frustration at the time of attending meetings with Moran seeking sign-off on something, only to find themselves dragged into long, theoretical and off-topic debates. “He was full of ideas – some were great – but the wheels of public administration probably didn’t turn as fast as he would have liked,” according to one former colleague.

But Moran insists he is not afraid to make decisions – as long as the bigger picture is looked at.

“I would not necessarily put myself out there as the best chief operating officer or project manager that the world has ever known,” he says. “That’s not my skill. But when I moved into the department, I immediately identified that there was no corporate office or project management system in place and there was no chief operating officer. I put new systems in place.

“As a general rule, if you focus as a secretary general of a department or a CEO of a company on all the detail and getting stuff done, I think an organisation runs the risk of not moving forward.”

Moran, who would quit the department unexpectedly in 2014 saying his work was done after the Troika had departed, says he found himself surprised during his days there at how little co-operation and cross-thinking there was among various arms of government. He recalls facing pushback when he put unemployment figures as a key performance indicator for the department's strategic plan, as that was seen as the Department of Jobs, Enterprise and Innovation's role.

“But, for me, it was the most important indicator of success as to how the economy was recovering,” he said.

There are signs things have improved in recent years, given the interdepartmental approach that has been taken to Brexit, addressing climate change and coming up with Project Ireland 2040, a planning and investment initiative for the next 20 years as the population is expected to grow by a further one million people.

And while there are hopes in some quarters that the fledgling LDA, will become a machine to deliver homes at pace as the country, and especially Dublin, deals with a housing supply shortfall, its interim chairman sees it as more of a slow burn, linked to the 2040 plan.

“Of course, we can help to unblock land that is currently there. It would, to my mind, be a mistake if we got distracted if we allow the LDA, which is supposed to be a medium- to long-term disruptor, to get consumed by short term deliveries only,” says Moran.

“If you were to pick one issue that is potentially going to tear the heart out of Ireland, it’s going to be how we deal with housing. We don’t do a very good job of this. We haven’t done it historically. And it involves some of the most sensitive political issues we probably as a nation have to face.”

The LDA, first flagged back in 2016 as part of the Government’s Rebuilding Ireland plan to reboot the housing sector, was launched 12 months’ ago as an agency with €1.25 billion of planned taxpayer funding to deliver 150,000 homes over 20 years, using State land and the “strategic land assembly” of private sites.

An initial portfolio of eight sites in counties Dublin, Cork, Kildare, Meath, Westmeath and Galway was assembled with the aim of delivering up to 3,000 apartments and houses over the short term.

Moran says design teams are working on schemes for these sites, as the LDA awaits legal transfer of the plots and the passing of legislation establishing it as a commercial semi-State body. Some planning applications may be lodged before the year is out.

Strategic review

Meanwhile, at the start of the summer, the land agency launched a strategic review – in collaboration with local authorities, Government agencies and private sector groups – of how large cities should be developed while limiting urban sprawl.

“The worst thing that could happen is that we end up taking lots of land on board, buying it in the wrong places,” he said. “We spent probably the first six months of the year teasing out some of the philosophical and strategic things that we need to think about. Things like, should people be living in suburbia? Should people be living in one-off housing or more high-density locations? Are we going to operate in all of the towns and cities or focus on some?”

The LDA aims to prepare a full, multi-year business plan when legislation outlining its exact powers and function passes through the Oireachtas.

Meanwhile, Moran – whose post-Department of Finance days have seen him act for periods as an adviser to Japanese investment bank Nomura and Uber, which has set up a European base in Limerick but failed to get approval to actually run its ride-sharing service in Ireland – is currently working as a strategic adviser to Arrow Group, a UK distressed debt firm that bought out US private equity group Oaktree's Mars Capital Ireland debt servicing business in 2017.

Arrow is reported to be circling hundreds of millions of euros of deep-in-arrears mortgages AIB is looking to offload to so-called "ethical" finance houses and charities.

According to Moran, Arrow is a “patient capital” provider that’s prepared to provide “long-term solutions for a long-term problem”.

As an alternative to the buy-to-rent model that is currently gaining traction, Arrow’s solutions include a plan where a borrower in trouble could maintain their mortgage, only pay interest, and remain in their home for an agreed period.

“You may have, for example, a family in Dublin for whom it’s really important to remain in their home while mum and dad are working in the city and supporting their children but, by the time they retire, they could hand back the keys and move elsewhere,” says Moran. “The solution revolves around the principle that if you pay a fair price – the interest, which, in today’s world, is much lower than rent – for that property, then you can have it for as long as you need it.”



Name: John Moran

Age: 53

Job: Interim chair of the Land Development Agency, strategic adviser to Arrow Global, chair of the Hunt Museum and of #LiveableLimerick.

Lives: Limerick mainly, also Dublin.

Hobbies: Sport, gardening, architecture and interior design, and “stirring it up”.

Something you might expect: He’s a Munster and Limerick GAA fan.

Something that might surprise: He’s to be found with friends and family in medieval costume annually on Bastille Day in Cordes-sur-Ciel in France.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times