Noonan vows to end cycle of boom-and-bust economics

Changes will make it more difficult for future Irish governments to ‘walk on the wild side’, Minister for Finance tells London audience

Once upon a time, not so very long ago, appearances by Irish politicians at Bloomberg’s London headquarters were packed affairs, with analysts anxiously examining every clause for market intelligence.

Yesterday, Michael Noonan was the latest to appear. This time, however, the room was half-empty. The lack of interest is a sign of progress. In the eyes of the markets, Ireland has been taken off the critical list.

Mr Noonan told dry jokes, pushed a positive story about Ireland, but still found time to drive home a few stiletto blades into critics who advised back in 2011 that Ireland’s only route was to run away from its debts.

Academic economists “in particular” were quick to declare it ‘Mission Impossible’, that it couldn’t be done. They were on Irish radio and TV advising us that we should throw in the towel and default,” he said, menacingly courteous.

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“There was lots of very serious input telling us the bailout was the wrong idea. ‘Default, don’t pay the bondholders, do what Iceland is doing, what Argentina did and you’ll be fine, write off your debts’. Quick fix, easy solutions.

“It was promulgated by very popular broadcasters, but also by economists, particularly those out of the business schools. But we won the argument. As we became successful the adverse comments fell away.

"They find it hard now to get economists to go on radio in case they are asked why their prophecies were so incorrect," said Mr Noonan, with a chuckle and a smile, even if both the laugh and the smile were as cold as ice.

Reputation was shot

In 2011, Ireland's reputation was shot. "I don't want to be too critical about my predecessors," he said, before proceeding to be exactly that. "We had ministers going out to Brussels lecturing people on how to get rich by selling houses to each other. They were sick of listening to the boastful Irish."

Relations were built: “Wolfgang is a good pal of mine. Christine was a very good friend of mine, she was very helpful,” he said, talking about his German counterpart, Wolfgang Schäuble and France’s Christine Lagarde, who now heads the International Monetary Fund.

“I tell her when she is going for president of France that I know Brittany very well. I’ll do whatever I can in several towns in Brittany, and knock on doors. She’s very good at what she does,” he declared, to laughter.

Still less than three years in the job, Mr Noonan reflected he is now the second most senior Economic and Financial Affairs Council minister because of resignations, departures and sackings: “We’ve seen six Greek FMs, not a secure job.Three French FMs.”

Ireland has repented of past sins, he assured: “I want to get away from this boom-and-bust model which bedevilled us for so long where we had these periods of boom followed by bust, followed by enormous emigration.

“I’d rather grow at a sustainable lower level than go through this boom-and-bust cycle.”

Politicians would not make the same mistakes again: “A lot of architecture has changed which will make it more difficult for future governments to take a walk on the wild side.”

For now, Noonan is looking towards December 15th and the bailout exit, though he is surprised it is attracting such international attention: “I just thought it would be another event that would pass by. There are 100 camera crews coming.”

Asked if he would celebrate “with a pint”, Mr Noonan declared his intention to be abstemiousness. “There’ll be no brass bands, or champagne. Our intention is not to be exuberant; this is just a stop along the way.”

Mark Hennessy

Mark Hennessy

Mark Hennessy is News Editor of the The Irish Times