Too soon for last word on Lenihan's handling of crisis

INSIDE POLITICS: When Ireland has left the EU-IMF programme it will be possible to assess Brian Lenihan’s tenure in finance…

INSIDE POLITICS:When Ireland has left the EU-IMF programme it will be possible to assess Brian Lenihan's tenure in finance

THE LAST two and a half years of Brian Lenihan’s life were like a Greek tragedy. His political ambitions were realised when he was made minister for finance in May 2008, but he was immediately presented with the gravest economic and financial crisis in the State’s history.

More pertinently, in the middle of trying to deal with that incredibly complex crisis, he was diagnosed with an illness that spelled certain death within a relatively short time.

He faced both challenges with extraordinary courage and grace. Throughout it all he maintained a natural courtesy and dignity, despite the fact his actions and motives were frequently misrepresented by political opponents, a coterie of academic economists and sections of the media.

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He let few people see how wounded he was by the assault on his reputation that sought to lay the sole responsibility for the mess the country was in at his door. The taunts did take a toll.

Easiest for him to deal with was the criticism in the Dáil, where he understood the rules of the political game. He had respect for most opponents, particularly Michael Noonan of Fine Gael. The fact the current Government is implementing his policies, almost down to the last detail, says all that needs to be said about the criticism he faced in the House.

Noonan yesterday paid tribute to the effectiveness of Lenihan’s approach to the problems in the public finances and suggested whatever mistakes were made in the handling of the banking crisis were due to incomplete and bad information.

That is probably as fair an assessment as it is possible to make at present. It is far too early to make a definitive judgment on Lenihan’s handling of the economic and financial crisis. The oft-quoted words of Chinese premier Zhou Enlai – who remarked in the 1960s that it was too early to say what the impact of the French Revolution had been – are pertinent.

Only when Ireland has exited from the EU-IMF programme at some future date and the banks are working normally again will it be possible to come up with any kind of reasonable assessment of Lenihan’s tenure in finance. Even then, the problem in coming to a judgment will be the impossibility of saying what would have happened if he had taken a different course.

For instance, we will never know what the consequences would have been if the bank guarantee had not been introduced on September 30th, 2008. It is certainly arguable that we might be better off now if a different course had been followed but, then again, we could also be in a far worse position. Only the passage of time will allow a reasonable judgment to be made on that by fair-minded people.

It is no coincidence Lenihan found a welcome ally in Garret FitzGerald during his struggle to get the public finances under control. FitzGerald, who had to wrestle with similar problems in the 1980s, had a real notion of what was entailed in trying to get the political system to confront the need to put the public finances back in order.

Interestingly, economists like Brendan Walsh, Colm McCarthy and John O’Hagan, who had been around in the 1980s, showed a far keener appreciation than some of their younger professional colleagues of the kind of economic and political choices Lenihan faced.

From the beginning, Lenihan himself harboured no illusions about the scale of the challenge facing him. Weeks after taking office, he told a construction industry conference he had “the misfortune to have become minister for finance a few weeks ago as the building boom was coming to a shuddering end”.

While he was widely criticised in the media for this alleged gaffe, Lenihan never spoke a truer word. By the time his critics had come to grips with the fact that there was a really serious problem, the scale of it was threatening to overwhelm the country.

The bank guarantee and the establishment of the National Asset Management Agency had to be dealt with in tandem with the budgetary decisions required to get the public finances under control. Then in 2010, as the Greek crisis blew up again, the financial markets decided we could not solve our problems after all.

Lenihan had been working with EU economic and monetary affairs commissioner Olli Rehn to devise a four-year programme that would chart a way out of the economic mess. In the event, the European Central Bank took fright at the scale of the Irish banking problem and insisted on pushing Ireland into a bailout.

“I believed that I had fought the good fight and taken every measure possible to delay such an eventuality, and now hell was at the gates,” Lenihan said later. A painful recollection of that period stayed with him. “I’ve a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport and looking at the snow gradually thawing and thinking to myself: this is terrible. No Irish minister has ever had to do this before.”

The scene conjures up the image of Michael Collins walking the streets of London, cold and alone on the night before he signed the Anglo-Irish Treaty in December 1921, knowing his motives would be impugned and he was probably signing his own death warrant.

Of course, Lenihan knew last November he was facing a death sentence whatever happened.

It is hard to think of anyone else in Irish politics who could have come through that political furnace with their political reputation relatively intact.

Despite plummeting ratings for the Fianna Fáil-Green Party coalition after the bailout, the public continued to retain a respect and affection for Lenihan.

He managed to retain his Dáil seat in the deluge of February 2011 that saw Fianna Fáil almost wiped out. His was the only Fianna Fáil seat left in Dublin and the surrounding commuter belt when the dust had settled.

It was testament to the fact the public believed he had done his best to deal with a disastrous situation not of his making.

The judgment of history should be equally understanding.