Minister for Finance, Brian Lenihan sets out economic philosophy
Brian Lenihan was the first Fianna Fail minister to be asked to speak at the annual commemoration of the Irish civil war assassination of the country's second Finance Minister, Michael Collins, and he chose to make an address that dealt essentially with issues of economic policy and political philosophy. The speech at Beal na mBlath, Co Cork, on August 22nd 2010, provides an insight into the underlying economic and political principles of the 25th Irish Finance Minister, Brian Lenihan. (Article published in Finance Dublin in August 2010).
“ three elements are essential to the recovery and maintenance of future employment:
1. We must improve our competitiveness
2. We must restore sustainable public finances
3. We must ensure that credit is available for businesses and households
“In a small open economy like ours, competitiveness is essential to creating sustainable jobs.
“Job creation requires that the public finances be put back on a sustainable path.
The role of private enterprise
“We know from our own and from international experience that only the private sector can create enough good jobs to meet the demands of our highly-trained young people and to solve the unemployment problem.
The role of business confidence and rational expectations
“We know from the 1980s that unless businesses are confident about the Exchequer’s long term position, they will not create new jobs.
A functioning private credit system
“Credit must be available to businesses that want to invest and create jobs. To provide such credit banks must attract funding which they can then lend on to these sustainable businesses. The measures adopted to resolve the banking crisis, including the creation of NAMA and support for individual financial institutions, are grounded in realism.
“Collins and the founders of this State were determined that all citizens should have equal rights and equal opportunities.
“Very few even of the most eminent economic experts, domestically, within the European Union, or internationally, foresaw the speed and extent of the crisis, either here in Ireland or worldwide. By the same token, none of us should be dogmatic in our certainties.
“There is no substantive connection between the economic and financial position we confront today and the totally different challenge faced by Collins and his contemporaries. But as I look at those pictures of my predecessors on the wall in my meeting room I recognise that many of them, from Collins through to Ray McSharry, had in their time to deal with immense, if different, difficulties.
Public finance accounting
“less often recognised is Collins’s work in putting in place an accounting system that required government departments to give full reports of expenditure to the Dail, and also required that any financial proposal brought to Cabinet should be first submitted to the Minister for Finance. Here was a man at constant risk of arrest and death, running a ruthless guerrilla war and masterminding the highly efficient intelligence system which secured its success. Yet he still had the time and the ability to build the foundations of a system of financial control. He recognised that such a system was essential to the running of a State.
The ultimate source of economic stimulus
“I am comforted by what their stories tell me about the essential resilience of our country, of our political and administrative system, and above all of the Irish people. That is why I am convinced that we have the ability to work through and to overcome our present difficulties, great though the scale of the challenges may be and devastating though the effects of the crisis have been on the lives of so many of our citizens.
On politics and the Irish civil war....
“No man is fully formed at the age of 31.
On Collins and De Valera:
“They shared much, in terms of their devotion to Ireland, their interest in its language and culture, their piety, their social conservatism.
“In recent decades, however, the full magnitude of Collins’s achievements has, I believe, come to be appreciated and valued by Irishmen and women right across the political spectrum. But at times this has, regrettably and unnecessarily, been accompanied by a denigration of Eamon De Valera, as if only one of the two could win the approbation of history.
“Each was, at different periods, prepared to operate within the constraints of the realities facing him, without losing sight of his greater vision of a free, prosperous, distinctive and united Ireland.
“....part of the healing process on our island must be an acknowledgement, aided by the work of modern historians like T. Ryle Dwyer and the late Peter Hart, that, alongside great patriotism and self-sacrifice, terrible deeds were done on all sides during the War of Independence and the Civil War.
(The full speech is at this link on the Department of Finance's website)