Events at home and abroad over the past week have put the Irish response to the crisis that engulfed the country in 2008 into a clearer context and have shed some new light on key events.
It is becoming clearer by the day that, contrary to the widely proclaimed narrative, the Irish political and administrative system made mainly the right calls under the most extreme pressure from September 2008 onwards.
Of course that pressure was largely self-inflicted by those who presided over the boom and Fianna Fáil paid a justifiably heavy price for that in the 2011 election.
It has to be acknowledged, however, that when the storm struck Brian Lenihan and Brian Cowen did what was required to stop the country sliding over the edge of the abyss and their successors in office had the guts to stick to the plan, with some important modifications.
The economic recovery, which is gathering pace by the day, has come about because our democratically elected leaders held their nerve in the face of widespread opposition and worked with the EU institutions to restore the public finances and keep the banks afloat.
They did this despite a vocal array of pundits and politicians who insisted that hardship could be avoided if Ireland defaulted on its debts and told the EU institutions what to do with themselves.
The Syriza government in Greece was elected on just such a populist platform with appeals to national pride and promises to end austerity as if that could be brought about by wishing it so.
The Irish electorate only has to look at what is happening to Greece now to see the dire consequences of following such a course of action. Hopefully, for the sake of the long-suffering Greek people a compromise solution can still be found but Syriza’s negotiating stance to date gives no grounds for believing that will happen.
The economic commentator Anatole Kaletsky, who has argued strongly that the Greek debt burden should be reduced, summed up the position during the week: “The latest Greek negotiating strategy is to demand a ransom to desist threatening suicide. Such blackmail might work for a suicide bomber. But Greece is just holding a gun to its own head – and Europe does not need to care very much if it pulls the trigger.”
To be fair to Europe its leaders do seem to care. German Chancellor Angela Merkel and European Commission president Jean-Claude Juncker in particular have been leaning over backwards to try to get a resolution but so far without avail. What they can’t do is bow to Greek demands.
The RTÉ documentary on Brian Lenihan earlier this week gave some insight into the enormous pressure politicians have to cope with at a time of crisis. Lenihan was pitched into the job of Minister for Finance just as the economy turned and it was his fate to have to cope with the consequences of the crash.
His first task was to convince his Cabinet colleagues what needed to be done and after that convince the public that there was no other way. It took all of his persuasive skills to do it but he managed to get a series of horrendously difficult budgets through the Dáil. Without them we would not be where we are today.
Central Bank governor Patrick Honohan, who at times had a difficult relationship with the Minister who appointed him, acknowledged this in the documentary, saying that the importance of Lenihan’s contribution would be appreciated by history.
One of the key figures from that era, Kevin Cardiff, former secretary general of the Department of Finance, in his evidence to the banking inquiry during the week provided a great amount of detail about what happened at key moments.
Cardiff was an impressive witness who didn’t shirk admitting his own and his department’s failure to appreciate the scale of the banking problem but he did give the lie to the notion that no preparations had been made to deal with it.
He confirmed that Lenihan and Finance would have preferred to nationalise Anglo Irish Bank on the night of the guarantee but were effectively overruled by Cowen. Mind you in the long run that would have made little or no difference to the State’s liability for Anglo’s debts.
Cardiff made no bones about the fact that Ireland was pushed into the EU/IMF bailout in November 2010 but he also said he felt grateful that the institutions were prepared to fund Ireland for three years.
John Moran, his successor as secretary general, took issue with the portrayal of the crisis as a television drama with simplistic goodies and baddies and he made the point that the core the problem facing the country was not whether bondholders were burned but whether the public finances could be brought under control.
He outlined how Michael Noonan immediately on taking office in March 2011 had entertained notions of burning some bank bondholders but had backed away at the last minute under pressure from the ECB.
At the time it represented a climbdown for Noonan and the newly installed Fine Gael-Labour Coalition but with hindsight it was the wise thing to do given the potential damage to the country from an open clash with the ECB.
The Banking Inquiry is providing more detail about what happened and at times it makes for good theatre, but main elements of the story are already well known. The really important thing is not the minutiae of what happened but whether the right decisions were ultimately taken. All the evidence is that they were.