Incoming Central Bank governor to make statement on ‘hacking’ report

Gabriel Makhlouf’s handling of budget leak has been severely criticised

Incoming Central Bank of Ireland governor Gabriel Makhlouf will make a statement on his controversial handling of a budget leak in New Zealand, Minister for Finance Paschal Donohoe has confirmed.

The Government’s appointment of Mr Makhlouf, a former New Zealand treasury secretary, has been mired in controversy after it emerged he claimed the accidental leak of sensitive budgetary material was a result of a hack.

A follow-up police inquiry found no evidence of a hack, which led to calls from the country’s main opposition party for him to resign from the post. Details of this controversy emerged after his appointment to the Central Bank here.

Last week, Taoiseach Leo Varadkar defended Mr Makhlouf's appointment but called on him to publicly address the criticisms levelled at him.


Mr Donohoe, who recommended Mr Makhlouf’s appointment to cabinet, said the Egyptian-born official would address the issue prior to taking up his new role here on September 1st but declined to give details of when and where this might take place.

“It goes without saying I wish this issue had not occurred in the way it did. It happened in the aftermath of us making the appointment,” Mr Donohoe said at the launch of the he National Treasury Management Agency’s (NTMA) annual report.

However, he defended the appointment. “From engaging directly with Mr Makhlouf both during the recruitment process and the aftermath of it, it continues to be evident to me that he is a public servant of the highest calibre who I think will provide excellent leadership of our Central Bank,” he said.

Mr Donohoe said Mr Makhlouf was aware of “the debate” here surrounding his appointment and wanted to respond to the criticisms contained in the policy inquiry.

Three decades

“This issue has to be seen in the light of somebody whose had a career now for three decades at the highest level of public service in many different jurisdictions,” Mr Donohoe said.

Mr Makhlouf, a former top UK civil servant and one-time principal private secretary to ex-UK chancellor Gordon Brown, was unveiled as the Republic's 12th Central Bank governor in early May, in succession to Philip Lane, who moved to a role with the European Central Bank.

He will be the first overseas official to fill the post in the Irish regulator’s 76-year history.

An investigation into Mr Makhlouf’s handling of the budget breach found, although Mr Makhlouf’s actions fell well short of what was expected, they did not warrant dismissal. Mr Makhlouf apologised over the incident while noting the report had said he had acted in good faith and with political neutrality.

International competition

“I think it’s important to bear in mind the means by which Gabriel Makhlouf got appointed as the new governor of the central bank,” Mr Varadkar said at a meeting of the British-Irish Council in Manchester last week.

“There was in international competition, there was a set of interviews and he was the sole candidate put forward to cabinet, at that point we made his appointment and we’ve no plans to revoke his appointment.

“The report we have seen from New Zealand says that he acted in good faith, didn’t act in a political way at all, but it was critical of him in some aspects, how he handled that affair. And I’m sure he will want to make a statement on that before he takes up office.”

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times