McCreevy seeks political consensus

The EU Commissioner for the Internal Market Charlie McCreevy has called for an end to “Punch and Judy” politics in Ireland as the Government tries to tackle the economic crisis.

In a speech to the Leinster Society of Chartered Accountants in Dublin today, the former minister for finance said there was no other time in Ireland’s history when setting aside party political differences would make more sense.

He said there was no government anywhere in the world that could conduct the “necessary fiscal retrenchment without becoming politically very unpopular”.

“There is too much at stake for the normal, business–as-usual ‘Punch and Judy’ politics to continue to hold sway,” he said. “It is readily obvious that there is broad consensus on the direction in which our economy should go.”

“In these extraordinary and quite dangerous times, do we want to emerge from this crisis quickly and strongly through a tough, difficult, but more consensus approach that would lift the confidence of capital markets and reduce the cost of the significant levels of debt that we now have to raise?” Mr McCreevy asked.

“Or do we want to increase the risks to our political and economic stability that the dynamic of the party political game renders inevitable in times such as these, which in turn results in a much longer period of adjustment at much greater expense to the taxpayer and to the next generation? “

“The sooner a debate is kick-started on this issue, the better” he said.

Mr McCreevy said he understood people in Ireland and other countries were angry at what has happened. Many don’t understand why it happened or why it was allowed to happen, he added.

He said the answers were complex but much of it had to do with excess liquidity in the global financial system, over-complex financial engineering and innovation, and an absence of adequate supervision at both a macro and micro level.

He went on to say it was a “myth” that the economic crisis was caused by a lack of regulation. “On the contrary much of the regulation was there. It simply wasn’t enforced. That’s why supervisory structures and supervisory resources and expertise must be and will be strengthened. Lessons have been learnt and they must be acted upon”.

Mr McCreevy said that it would not surprise him if there was a widespread view that bankers and property developers – in Ireland and elsewhere — should be taken out and “tarred and feathered”.

“But we must not lose sight of the fact that for our economy to recover, experienced bankers and experienced property developers will be needed. Whether we like it or not many of those who have been chastened and bruised by the experiences of the recent past are probably also those who have learnt most and some of them may therefore be best equipped to manage and handle the many challenges of renewal that lie ahead.”