MINISTER FOR Finance Brian Lenihan won the thumbs-up from major investors in London yesterday on the latest leg of his European tour to build and sustain confidence in the Government’s plans for economic recovery.
There was also generous praise for Mr Lenihan’s command of his economic brief after a private briefing in the City organised by the National Treasury Management Agency.
The Minister told The Irish Timeshe was satisfied that perceptions of Ireland as potentially the weakest link in a weak eurozone were a thing of the past. During his visit to London in March, the Minister had urged British Euro-sceptics not to make the mistake of entangling questions about the Irish economy in the ongoing debate about the UK's role in the EU.
A number of those in the Minister’s audience yesterday agreed with Mr Lenihan’s contention that Ireland’s long-term strength and potential is firmly rooted in the euro.
They also underlined their belief that, while having to implement difficult and hugely unpopular measures, the Government is aided by the fact that – unlike those in Britain and Germany – it is not facing into an early general election.
Eric Busnel of Dresdner Kleinwort said he thought Mr Lenihan had given “a very convincing” and “polished” presentation on the Irish economic situation and outlook that would prove reassuring to investors.
Asked if had been impressed by what the Minister had to say, Nicolas Walewfki of Alkan Asset Management replied: “Yes. I think particularly the reduction in labour unit costs is very impressive, and there are very few countries who do that.”
Asked if Mr Lenihan had faced any scepticism or significant challenge from those listening, Mr Walewfki said Europe’s policy would be key: “If they are too restrictive and Europe goes into deflation then we will delay the recovery.” But that, he agreed, would be a Europe-wide problem rather than one for Ireland on its own: “Exactly. Ireland has done its job, I think, by reducing its unit labour costs.”
Scott Rankin from Davy Research thought Mr Lenihan impressive: “I’ve heard him speak once before, but never to this type of audience,” he said.
“He spoke off the cuff and got his point across very well. Getting the message across that the adjustment is under way and is happening quickly is very important.”
One of the organisers of yesterday’s event speaking off the record said he estimated there had been quite a positive response from the audience of investors and representatives of “big money funds”.
“I think the frankness with which he (the Minister) speaks, that he’s able to answer everything, and quite clear that Ireland’s addressing its own problems was reassuring.”
Asked if there had been any concern or questioning about Ireland’s viability within the euro, he said: “No. That actually has died totally.”
Mr Lenihan said he was pleased with the positive response to his presentation: “I think what’s very clear is that the outside world recognises that the steps being taken by the Irish Government to repair the banking system are seen as the correct steps externally. But of course they’re very difficult steps.
“And in the domestic political debate, clearly the Government has suffered a loss of support because of that. But we certainly won’t be deterred from taking whatever action we have to take.
“I think we’re very fortunate that we have a mandate from Dáil Éireann until 2012. I think a lot of the commentators inside made the point that one of the difficulties in Britain and Germany is that the elections are so imminent that they believe the governments are not able to take the steps that have to be taken,” Mr Lenihan said.
