Cowen should take heart from how Bertie saved St Luke's

DÁIL SKETCH:WITH THIS Government, it always comes back to the builders.

“A structural deficit in the order of 8 per cent has emerged in the Irish public finance position,” explained Brian Cowen.

What does this mean? It means Ireland is now in the same position as St. Luke’s was in the 1990s – with its fundamentals in a parlous state.

Aficionados of the Mahon tribunal will recall how Bertie Ahern’s constituency office, while appearing swanky and healthy on the outside, was discovered to have dodgy foundations.

According to the former taoiseach and assorted witnesses, St. Luke’s was in danger of sliding into the Tolka river and had to be shored up immediately using special rafts of cash.

Thereafter, regular injections were needed over a period of time to stabilise the position.

It was such a traumatic time for all concerned, nobody thought about things like keeping proper accounts and the like. Memories of those terrifying months – Bertie didn’t know the day nor the hour when somebody might call to his office with a raft of cash – were so difficult for him to recall that he was often moved to incoherence in the witness box.

But everything worked out fine in the end. Bertie Ahern met the challenge of the upturn, got his finances in order and became taoiseach.

And St. Luke’s is still standing. It never did slide into the Tolka.

Let this be a heartening tale for his successor, Brian Cowen.

Brian is currently struggling with a collapsing economy and needs billions of euro to shore it up. If he can’t secure the foundations within a few years, the entire country will slide into the cold embrace of the International Monetary Fund.

Naturally, faced with such a parlous state of affairs, a man might not make a lot of sense. Bertie rarely did.

Brian Cowen struggled to explain the situation we are facing: “The structural deficit I spoke about of basically 8 per cent is regarded by most as the structural deficit in our financial position at the moment,” Cowen told the Dáil.

There is also a “cyclical side of the deficit”. However, the structural will swing into the cyclical, and things will eventually get better.

Simple as that.

The Taoiseach seems to know what he is talking about. He has a problem though, and he said what it was yesterday: “How do you convey to people in ordinary language what is the size of the issue?” He might try talking to them.

Brian’s belated but very welcome efforts to try and explain the severity of our problems led to him being accused of losing two billion euro between last Thursday and Sunday.

Labour’s Joan Burton, standing in for her leader, said Minister for Finance Brian Lenihan reckoned on Thursday that the exchequer would take in €34 billion in tax this year.

However, during a press conference on Sunday, the Taoiseach stated the tax take was likely to be in the region of tax yields in 2002/2003.

And as everybody knows, the exchequer only took in €29 billion in 2002 and €32 billion in 2003.

“Taoiseach, did we lose two billion over two days?” Joan asked sweetly. “It seems an awful lot of money to lose over two days.” Not that anyone really cares, because it’s all just mad money and we don’t have any of it at the moment.

But Joan was confusing us for a reason.

“This Government keeps chopping and changing the figures, and there is grave uncertainty. Uncertainty in business is the hardest thing to price.” This, Deputy Burton concluded, is partly why the international credit rating agencies have such a negative view of Ireland and why, in recent days, the country’s credit rating has plummeted from a marvellous triple A to a disappointing double A plus.

Ceann Comhairle John O’Donoghue was so bamboozled that he proceeded to refer to the Labour finance spokeswoman as “John Bruton”.

Which brings us to Standard Poor’s – a credit rating agency, apparently. People were talking about it in Leinster House yesterday with that alarming familiarity borne of innocent ignorance.

They downgraded us. It was like being demoted from the first division, said Enda Kenny. Worse still, it’s going to shove up the cost of our borrowings.

He took no pleasure in noting with thinly disguised glee how the man from Standard Poor’s remarked that a change of government might be necessary to stabilise economic matters here.

Brian Cowen took no pleasure in the views of this analyst either. His job, he said, is in the area of credit ratings. “I don’t know what he knows about Irish politics.” Then the Taoiseach discovered an unlikely ally in Joan Burton, who took a very dim view of this agency making pronouncements about the Government.

“I don’t think that’s any business of any foreign rating agency” she sniffed, before quickly reverting to type by blaming EU commissioner Charlie McCreevy for encouraging this sort of carry-on.

Brian replied at length. Structural deficits and all that.

Our heads exploded.

Only six days to go to the budget.