Cowen and Lenihan at odds over IMF rebuke

www.independent.ie

Tension has developed between Taoiseach Brian Cowen and Finance Minister Brian Lenihan following the publication of a damning report on the economy last week by the International Monetary Fund (IMF).

Even before publication of the IMF report, Cabinet sources say that “differences in approach” had emerged between the two men. While they have maintained a proper working relationship, the Taoiseach’s determination to embrace the Social Partnership model is said to have privately frustrated Mr Lenihan.

That residual tension was heightened last week when Mr Lenihan rushed to influence public opinion before the IMF report had been widely analysed.

In his haste, he only served to leave Mr Cowen badly exposed. Mr Lenihan publicly, and unequivocally, welcomed the IMF report on Thursday, stating that it had endorsed current Government policy; that is, the economic policies followed since he was appointed Finance Minister.

By doing so, however, he focused attention on criticisms contained in the report of Brian Cowen’s Budgets in 2007 and 2008.

Mr Lenihan made matters worse when he tried to distance himself from of those decisions by stating: “I wasn’t a member of that government.”

Mr Lenihan also said that the economy had been “overheated” during the final two years of Mr Cowen’s tenure as finance minister.

In the Dail on Thursday, Mr Lenihan was compared to “Pontius Pilate” and accused of trying to “wash his hands” of decisions taken by the Government when Mr Cowen was finance minister — decisions which had been severely criticised in the IMF report.

The Taoiseach was then forced to go public to defend the decisions he had taken in the 2007 and 2008 Budgets. Mr Cowen also adopted a far more circumspect view of the IMF report than did his Finance Minister.

But Mr Cowen may suffer further political damage from Mr Lenihan’s attempt to “spin” the IMF report. A Sunday Independent/ Quantum Research telephone poll conducted last Friday found that 64 per cent of irish people felt that the Taoiseach should resign in light of the criticisms of his Budgets contained in the IMF report.

The poll also found opinion almost evenly split on the IMF suggestion that public sector pay and numbers should be cut: 51 per cent agreed, 49 did not. On the IMF suggestion that the level of social welfare payments also needed to be cut, an overwhelming majority (69 per cent) disagreed while 31 per cent said they agreed.

These findings indicate that the Government is still facing a huge task to bring with it public support for the difficult decisions it must still take. Mr Cowen is seeking to gain a measure of support from the Social Partners in advance of his Government deciding to cut the public service and social welfare bills.

Fine Gael and Labour will now increasingly focus on Mr Cowen’s stewardship of the economy during the critical years leading up to the last general election.

The IMF’s executive directors noted that Ireland has been hit particularly hard by the global economic and financial crisis, reflecting “significant vulnerabilities” built up during the boom years, amplified by the openness of the economy to global shocks. Read full article

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