Irish Government tough on fiscal policy; weak on dishing it out to the banks

P O’Neill with a sharp observation of the Irish version of mañana, or ‘don’t do today, what you can do tomorrow’. Think of those late agriculture, regional development, education and OFMdFM draft budgets, if you’re getting all nordie and smug.

But in the maelstrom of the Republic’s economic crisis, the consequences have been catastrophic, not least in the government’s ‘unaggressive’ dealings with the banks… He quotes Lorenzo Bini Smaghi, a member of the ECB:

“Markets waited and waited and since they saw no policy reactions they started to lose confidence in the course of the summer. Remember there was a downgrade – in August – but there was no policy reaction, no announcement that a tough budget was in preparation and no announcement of the measures. The loss of confidence also affected the banking system and this created a spiral which led to the crisis and in the end the request for financial assistance.”

The dilemma for Irish voters will be deciding which (if any of the Opposition parties) have the capacity to avoid a further series of mañana responses, in order to hypothecate electorally challenging decisions…

Don’t hold your breath….