“Can Europe Be Saved?” by Paul Krugman

Paul Krugman has a thoughtful survey of the Euro crisis in this week’s New York Times Magazine (forthcoming on Sunday but available on-line now).  This is not stockbroker-economist-type research, which tends to be long on buzzwords and hyperbole.  It is a well-reasoned feature-length review with some policy suggestions.  It has a central focus on Ireland and the other troubled peripheral states.

42 thoughts on ““Can Europe Be Saved?” by Paul Krugman”

  1. Monetary actions to be taken- last resort of the central planner.

    Central planning has been tried & it failed miserably.

  2. The following passage caught my eye:

    “Then there were the costs of financial clean-up. These have been especially crippling in Ireland, where banks ran wild in the boom years (and were allowed to do so thanks to close personal and financial ties with government officials).”

  3. If you read the title of this post too quickly you get……

    “Can Europe be saved by Paul Krugman?”

    ……..then you get images of some economist with a beard replite with cape, external underpants and the letter “K” displayed prominently on his paunch…..The answer “yes” then fails to spring to mind.

  4. It looks like things in the US are going to get much worse before they get worse :

    http://www.ft.com/cms/s/0/9a510cea-1e86-11e0-87d2-00144feab49a.html

    “An estimated 5.5m US households are tied to mortgages that are at least 20 per cent higher than the current home value. These are the borrowers most likely to default. For these families, the American dream of home ownership has turned into a nightmare.”

    “If home prices don’t decline at least another 10 per cent, then the laws of supply and demand will end up being repealed as far as it pertains to residential real estate.” The result is that millions more American families remain at risk of losing their biggest asset, their home equity. Since mortgages average approximately 50 per cent of total home values, the 30 plus per cent decline in home prices to date has already reduced homeowners’ equity by over 60 per cent.”

    “More than 3m homes have been repossessed by the banks since January 2007. The result is a dead weight dragging down homeowners, the financial world and the wider economy, with little prospect for improvement. “

  5. On the differences between Nevada and Ireland. Krugman talks about how Nevada pensioners don’t have to worry about their pensions being paid, since they’re paid from Federal funds. That’s nice, but it’s true about Cork within Ireland in the same way that it’s true about Nevada within the US.

    However, the main problem with national pensions – and this is true about the US in the same way that it’s true about Ireland – is that the pensions are unfunded and have to be paid out of ongoing income. If people’s pensions were funded and invested wisely then it wouldn’t matter whether pensioners lived in a larger currency unit or had a federal fiscal system or not. AFAIK we face a much bigger pension problem in the future than whether or not there’s a fiscal union. None of the countries have funds to meet their committments.

  6. My favourite:
    ‘It says something about the current state of Europe that many officials regard the Baltics as a success story. I find myself quoting Tacitus: “They make a desert and call it peace” — or, in this case, adjustment’

    While simultanously we have Nicolas Sarkozy (http://www.irishtimes.com/newspaper/breaking/2011/0113/breaking38.html)
    describe what happened in Ireland as ‘aid’ that we should give up our Corporation Tax for, and not as a stitch up/profitering that may force us out of the euro.

  7. Brendan Walsh quotes Paul Krugman as explaining that the Irish banks ran wild

    “…and were allowed to do so thanks to close personal and financial ties with government officials.”

    Let’s concede the personal ties, whatever that means. Could be marriage, golf, shared interests in embroidery or bee-keeping.

    But if the New York Times can establish ‘financial ties’ influencing the actions of Irish officials, they are the first to do so to my knowledge. Why not run the story in the news columns?

    The actions of Irish officials can be criticised as incompetent, myopic, naive, daft as a brush, all within the bounds of fair comment. But this is an accusation of corruption, and really should be substantiated or withdrawn. And in the NYT?

  8. @Colm McCarthy

    But I thought that the easy borrowing from Anglo Irish Bank by Fianna Fail-connected individuals, with little loan scrutiny except by the Anglo CEO, and bypassing Anglo credit risk control steps, has been well-established and documented? Isn’t that correct? I believe that a mid-level manager at Anglo was dismissed for discussing it publicly. I apologize for not providing a citation — I will try to hunt one down if noone else can document this.

  9. @Colm McCarthy

    Here is documentation for Krugman’s claim. It involves Irish Nationwide — from the Irish Independent December 23 2010
    —————-
    By Edel Kennedy, Fiach Kely, Aine Kerr and Charlie Weston

    Wednesday December 23 2009

    A MAJOR investigation has been launched into how former Finance Minister Charlie McCreevy obtained a massive €1.6m Irish Nationwide loan to buy a luxury apartment in the K Club.

    The Irish Independent has learned the EU Commissioner purchased the property in 2006, at the height of the boom, after borrowing funds that exceeded the value of the property.

    The property is now worth only around half the price he paid for it.

    The revelation of the financial transaction came after Mr McCreevy was named in an RTE ‘Prime Time Investigates’ programme as being one of several high-profile Fianna Fail politicians who were given huge mortgages from Nationwide with minimum paperwork involved. The €1.6m loan was granted to Mr McCreevy even though the trophy home was worth €100,000 less than that at the time.

    The loan was granted by then-chief executive Michael Fingleton, even though the building society’s own guidelines did not allow it to grant 100pc mortgages.

  10. @Colm McCarthy

    “…and were allowed to do so thanks to close personal and financial ties with government officials.”

    Probably the language is a little loose. Maybe if PK had omitted the word “officials” it would be less offensive.

    Everyone will have a fairly clear view of the former head of government’s tendencies to become financially entwined with people engaged in business for example – and I am not harking back to Haughey.

    “financial ties” can extent to shared or similar investments and financial interests too don’t forget. One would imagine the joint property developer / governing party “tent” at the Galway races for example, might be a high profile occasion in which interests might have become aligned. Do you doubt there were less visible occasions too?

    If, theoretically, someone seemingly not that bright but, say, a local gaelic sports star well connected to the ruling party appears as something senior in the local planning authority he might reasonably be thought to therefore have a financial tie to the party. If the party has received “campaign contributions” from property developers; or if friends or family of party officials have been bumped up the queue to register in interest in the latest local property flipping opportunity by a developer – is there a financial tie?

    Ireland has been excellent at portraying itself as “clean” to foreigners. That Paul Krugman might have actually met a few Irish taxi drivers and copped on to the fact that the Irish themselves know that the place is full of a sort of “soft” corruption is to his credit.

    Given the chronic timidity of the Irish press, stifled by the country’s lible laws, and its failure to function as an effective watchdog over the years it strikes me as a bad idea to shout “you can’t prove it – so retract” to the New York Times for printing something that wouldn’t raise an eyebrow among ordinary Irish people.

    It might be tempting to pull on the green jersey to defend the country’s image so as to hasten a return to the bond markets, but I think that game is over. Addressing the dysfunctional influences within the country would do more for international credibility.

  11. @ Colm MCarthy

    “…and were allowed to do so thanks to close personal and financial ties with government officials.”

    It is accepted, is it not, that there was a catastrophic failure of financial regulation. How on earth could that have happened ? Let’s concede, in a spirit of charity, that some of it was caused by laziness, backwardness and incompetence. No one is perfect.

    The bit which worries me is the part which was semi-planned and deliberate, like the drunk who ‘accidentally’ walks on your toe. Of course people and institutions were scratching each other’s backs. Circles of influence. We have a number of solidly researched journalisitic accounts describing who was kissing whom, if not actually in bed with same.

    The laws of libel are not the only obstacle to be overcome in reforming our society. Legislation for ‘white collar’ crime is poorly developed in this little jurisdiction, and a law of omerta tends to operate in the senior ranks of the public service. It’s a small island and memories are long.

    Furthermore, a large chunk of our media is in the hands of the state and the powerful private interests. It’s not Russia here, but we don’t have a free press. Given their own conduct, our respected professions, such as law and accountancy, have every reason to conceal the cozy arrangements which were made in the bubble.

    No wonder the NYT has trouble establshing the necessary ‘facts’.

  12. 4 options. All mutually exclusive in the models it seems.

    Argentina the best outcome? No analysis of the effects on ordinary Argentinians of losing 2/3rds of their wealth, though… or their pensions.

    Tell me academic chaps, how would you like it if your pensions were converted to Lenny pennies?

  13. Gregory,

    it’s all too loose though. I knew about the Irish Nationwide/McCreevy episode, and can add the Celia Larkin one from memory. The language used (ie chosen) conveys (ergo was designed to convey) an impression that the Irish banking disaster had its origins in ‘financial ties’ between banks and officials. This is what Paul Krugman wrote. This guy gets syndicated all over the world. If a cub reporter offered this kind of stuff to the subs at the NYT, it would not get printed.

  14. Oliver,

    Come on, will you please read carefully what Paul Krugman actally wrote! If there is evidence of the corruption of officials in Ireland, I want to know about it. If there is none, it is reckless to toss these accusations around, and destructive of any reform project. If you don’t get, I can’t help.

  15. @Colm McCarthy

    Krugman claims there were financial ties between the bankers and government officials, but does not claim that the ties were illegal, just that the ties fuelled an environment of crony capitalism where the banks ran wild.

    For example, government officials (Bertie Ahern) appointed their friends and bankers (Fitzpatrick, Bradshaw) to semi-state bodies entrusted with public money (DDDA). These bankers then used their position to approve deals with insane valuations (glass bottle site) where their own bank funded the deal. The main beneficiary of the deal (Paul Coulson) was a close business partner of the very same bankers that approved the deal, having all been part of a property syndicate that was a subsidiary of the banker’s own bank. Another member of the syndicate, and also a co-director of the same bank (McGann) was appointed by government officials to a semi-state body entrusted with public money (DAA) which became involved in risky property deals… At this point you can see that the algorithm is recursive, so I’ll stop (and yes that’s the same McGann who would go on to later dine with government officials (Cowen) in golf clubhouses but would carefully avoid talking about any of the problems his bank was having). Some more info on the DDDA deal here.

    Many beneficiaries of the lax lending environment (the developers) donated heavily to FF.

    So until the bubble burst, these sort of inter-linkages generated nice profits for Anglo, nice profits for the developers, and nice party funding, so the ties clearly had a financial aspect. There is probably nothing that is, strictly-speaking, illegal here, but that is little comfort to those left paying the bill and cleaning up after the party has ended.

  16. Yet as the earlier Ireland-Nevada comparison shows, the United States works as a currency union in large part precisely because it is also a transfer union, in which states that haven’t gone bust support those that have. And it’s hard to see how the euro can work unless Europe finds a way to accomplish something similar.

    It’s strange that Krugman makes no reference to the largest state in the union, California.

    There will be no federal bailout and the new and old governor, Jerry Brown, is struggling to close a $25bn budget gap.

    California made it difficult to raise taxes while as in Ireland, raising public spending was very easy and popular.

    On Monday, Brown announced a budget that includes $12.5bn in cuts to state employees’ pay, health care, welfare and higher education.

    On Thursday, he ordered state employees to return some 48,000 cell phones paid for by the state!

    More austerity to come.

    Germany’s economy was depressed as a result of low demand from domestic consumers. But it recovered in the decade that followed, thanks to an export boom driven by its European neighbors’ spending sprees.

    No recognition for painful labour and welfare reforms that took political courage; the reformed flexible labour system prevented a large rise in unemployment during the recession.

    The jump in emerging market demand is also ignored.

    @ Gregory Connor

    The money system in Washington makes any claims of corruption in Ireland by public officials look like Noddy’s playtime.

    Bribery has almost been legalised.

    Several members of Congress have been exposed for having got sweetheart mortgage deals.

    Again, that is small potatoes compared with the billions used by the lobbying industry.

    http://www.finfacts.ie/irishfinancenews/article_1019448.shtml

  17. Krugman’s four scenarios idea is really a bit of a non-sequitur, because he goes on to say that he can’t see how Ireland and Greece can avoid restructuring, which means Toughing it out is out of the question. Win Thin at Creditwritedowns (echoing Satjayit Das at Eurointelligence last week) builds on previous IMF work in making the same case:

    “the larger the differential for any country between real interest rates (borrowing costs) and real growth (with the differential defined as r – g), the larger the increase in the primary budget balance (budget ex-interest payments) that is needed just to stabilize the debt/GDP ratio

    Markets have fixated on 7% borrowing as some sort of threshold for a country having to go to the EFSF. We would posit that under the IMF concept of r – g, borrowing costs don’t even have to rise that high to help unravel a country’s debt dynamics. Let’s look at IMF growth forecasts for 2011 for the major euro zone countries and compare them to real 10-year borrowing costs to obtain r – g. The differential is largest for Greece at 11.6%. Next is Ireland at 6.6%, then Portugal at 5.5%. Spain comes next at 3.4%, Italy at 2.0%, the Netherlands at 0.5%, and Belgium at 0.4%.

    There has been talk that the stronger euro zone countries (read Germany) somehow subsidize the high borrowing costs experienced by the weaker countries. Looking at the (r – g) gap for the periphery, however, it would seem that the subsidies needed to drop r down to g for these countries may simply too great to bear, especially if Spain and Italy are thrown into the mix. And just breaking even here does nothing to reduce the mountain of debt that already exists for these countries. Here, r – g must be negative, and we reiterate our view that without EM-type rates of growth, euro zone countries simply cannot grow their way fast enough out of this debt trap. Other measures that are reportedly being discussed by European policy-makers include expanding the EFSF, allowing it to directly purchase member bonds, and lowering the cost of EFSF aid. None of these are enough to close the r – g gap substantially, in our view. We continue to believe that large-scale debt restructuring with significant haircuts is the only sustainable solution to the euro zone’s current debt woes.”
    [http://www.creditwritedowns.com/2011/01/european-debt-dynamics.html]

    I’d be interested to hear John McHale and JtO’s explain to me why he’s wrong. It’s beginning to seem like it’s the Europeans, and not the Americans who, to paraphrase Churchill, will do the right thing only after they have exhausted the alternatives. But then maybe I’m being too optimistic in assuming that sanity will eventually prevail…

  18. @ Colm McCarthy

    While I genuinely appreciate your desire to maintain judicial level standards of proof for allegations of improper ties between politicians and financiers, I think the responses of other commenters, especially Bryan G, have shown that you don’t actually require law-breaking as currently defined to pervert the course of the economy in ways that led us to boom and inexorably to an almighty bust. And Krugman did not specifically accuse anyone of breaking the law.

    The Macro-Resilience blog has an excellent theoretical description of the role that crony capitalism played in the creation of the Great Recession in the U.S., building on Minsky and Olson in particular. It doesn’t take a lot of imagination to tweak this model to the Irish example:

    http://www.macroresilience.com/2010/11/24/the-cause-and-impact-of-crony-capitalism-the-great-stagnation-and-the-great-recession/

  19. @Colm

    I read Krugman’s phrase “financial ties” to mean crony capitalism, which is clearly documented in the case of the Fianna Fail led government over recent years (say 2000 – 2008 up to September of that year). This was a major problem in several countries during that period, not just in Ireland. For example the same crony capitalism in other guises infected the U.S. mortgage industry (as Krugman would be quick to acknowledge I believe). I did not interpret the phrase “financial ties” as meaning cash-filled brown envelopes passed to government employees, just “soft” corruption of the kind that is documented in some of the posts above.

  20. Gregory,

    I will yield to no-one (Myles na Gopaleen) in whinging about our beloved public servants. If there is a distinction to be drawn between elected and appointed officials, it is up to the accuser (Paul Krugman) to make that distinction, and not up to you or me.

    There is no basis for insinuating that the appointed officials are crooked. Thick, asleep, behind the pace of the game, too easily impressed by bankers with large motor cars, all fine. Crooked is just an awful notion to introduce into the coverage of the Irish debacle. It is out of order for these guys to abuse their worldwide media access in this way.

    If you don’t get, you don’t get it. Stand up and fight!

  21. If Europe is going to be on the same currency, it will also have to get serious about converging on deficits, tax policy, retirement ages, pension benefits, etc. It is unfair to the citizens of a country with higher retirement ages and taxes to pay for other countries.
    Further, debts will have to be written down with haircuts imposed on bondholders, as many countries and individuals are insolvent. The alternative is ten years or more of stagnation. At some point, when asset prices drop significantly systemically, liabilities must also be reduced across the board. Start with 20% bondholder haircuts and 20% mortgage balance reductions.
    Bill

  22. Colm McCarthy: If there is a distinction to be drawn between elected and appointed officials….

    Krugman doesn’t draw any such distinction. I’m sure you know that in America all sorts of offices are filled by election. The Taoiseach is an official, as is a guy who checks tax returns.

    I’m evidently not the only one struggling to make sense of your complaint. Surely you don’t dispute that bankers and government officials had close financial ties? See Bryan G’s comment above. Do you doubt that bank regulation was influenced by those ties and would have been tighter if they didn’t exist?

  23. Do we need to list all the suspect appointments to make the case?

    Okay, I’ll make a start:
    http://www.independent.ie/national-news/ahern-defiant-over-loans-from-state-boards-trio-74093.html
    “TAOISEACH Bertie Ahern insisted last night he was not obliged to disclose that he owed money to close friends who were appointed to State boards.

    His statement followed controversy in the Dail earlier yesterday after he was accused of not answering direct questions about the appointment of three friends: Joe Burke, David McKenna and Des Richardson. ”

    How about the Quinn affair? It stinks to high heaven. Too many questions and articles to post.

    How about banks writing off loans to current and former politicians without pursuing payment? An individual who received these would be viewed by the Revenue as having received a gift and be taxed accordingly.

    How about politicians making up invoices/claiming unvouched expenses? Likewise, an individual is not in a position to claim these without the revenue viewing them as salary.

    Finally (and I could go on and on and on), if we don’t have a problem with crony capitalism, why is Mr. Lenihan planning on stamping it out:
    FT 17 March 2009:
    “Ireland is planning to introduce tough legislation to clamp down on crony capitalism and excess bank lending in the wake of the property bubble that has hammered its leading banks, Brian Lenihan, finance minister, told the Financial Times on Monday night.

    “There is a problem in all small countries with too many incestuous relationships,” Mr Lenihan said.”

  24. Don’t know if a view from “outside” will help ( I have businesses in continental Europe and and the US) but the perception is more of profligacy, arrogance, mendacity, nouveau riche “beggars on horseback” during the Celtic Tiger than crookedness and Krugman using this term sur won’t do our “image” any good.

    Though I don’t live there in Ireland I think we know what we mean by “crooked” in Ireland ( and elsewhere) short of it being proven in a criminal trial.

    Also, I’m not sure Krugman’s writing in the NYTimes qualifies as “journalism”, subject to verification of sources, libel laws etc. especially as he doesn’t name names.

    For the moment at least, we’re not seen as “crooked”. Time will tell!

  25. @ Colm,

    I don’t see why you would assume the phrase “government officials” refers specifically to civil servants. I think you may be inappropriately exporting Irish usage (where “officials” might usually be taken to mean civil servants) to an NYT article. I think ministers can be very reasonably covered by the phrase “government officials”. To be sure Krugman makes no explicit distinction between elected and appointed officials – why should he? If he had said “government ministers” (which would not be a typical phrase in the US) would you complain that he hadn’t distinguished the ministers with links from the ones without them?

  26. @ Colm McCarthy

    ‘Crooked is just an awful notion to introduce into the coverage of the Irish debacle.

    How long did it take us to recognise the reality of clerical child sex abuse ? If there is one thing we know for sure about Ireland, it is that institutional crimes will be denied for as long as possible. When they can no longer be denied, they are ‘managed in such a way as to limiit the impact on powerful stakeholders.

    We have an administrative public service modeled on British lines. Secure, well paid positions with generous pensions. The system is designed to deter the kind of simple graft which is still found around the world, and it does. To that narrow extent, you are correct.

    Circles of indirect influence, as noted above by other commentators, are much harder to eliminate. What makes it even harder is that conflicts of interest are are considered normal and ‘ even necessary among our educated classes. Looking the other way is what keeps it all going.

    Naturally no one likes to think badly of themselves. If the dodgy stuff is done for the good of one’s family and friends, does that make it OK ?

  27. @Paul Quigley
    Golden circle in Ireland
    http://www.tascnet.ie/showPage.php?ID=3123&ST=mapping%20the%20golden%20circle

    Golden civil servants:
    For discussion of large number of former senior civil servants moving into industry see this discussion on politicalworld.org (not a link as not allowed):

    “Quinn as An Employer of Former Senior Civil Servants – Should our Rules be Changed ?”

    (politicalworld.org is also very good on the astounding absence of prosecutions in Irish clerical abuse cases).

    Ironically enough getting senior civil servants to spend shorter terms in the top positions was a reform measure, as was paying them more.

    Then there is:
    Roddy Molloy, former head of FAS, and former chair of the Institute of Public Administration!

    George Redmond, former Dublin Assistant City and County Manager.

  28. @Paul Quigley
    Via The Irish Left Review from the report (pg 31)
    “FitzPatrick, Ann Heraty and Gary McCann were members of the remuneration committee of Anglo Irish Bank that set the payment for the chairperson, who was Sean FitzPatrick;
    Sean FitzPatrick as chair of Anglo Irish Bank, was involved in setting the remuneration of non-executive directors, who included Ann Heraty and Gary McCann;
    Sean FitzPatrick was chair of Smurfit and was a member of the remuneration committee of Smurfit, hence involved in setting the remuneration of Gary McCann, who was CEO of Smurfit;”

    Striking photo here:
    http://www.independent.ie/national-news/anglo-off-the-menu-as-they-tucked-into-the-economy-2495868.html

    @All
    Our local councils – where our politicians start – are a swamp and so therefore are our political class are too. Without decisive action our civil service will inevitably go the same way. The only question is how far has it already gone?

  29. @Colm
    Being entirely an outsider and with an outsider’s perception, mine is that most of the “crooked” officials (elected, appointed and otherwise) have little or no conscious understanding that their behaviour is “crooked”.

    Instead they see that they’re working with “the key people” and that they are “taking the best advice” and “having a flexible approach to regulation”, etc. The almost undeniable fact that the way they value advice, the way they assess key-ness, and the level of flexibility in regulation is influenced by parameters which are not objective is the key issue.

    The closed nature of the networks must have made Ireland the cheapest place in the world to procure government favours. You didn’t really have to bribe anyone…simply be a “fine fellow and a good friend”. Favours in Ireland were bought and sold for smiles and winks and nudges from insiders. Outsiders got ignored. If the appointments to goverment boards at the moment don’t tell you that something serious is wrong in Ireland they I don’t know what will.

    That’s my perception anyway. Tell me if I’m wrong.

  30. @High Sheehy
    You are talking about this:
    http://www.independent.ie/national-news/ff-stuffing-quangos-with-cronies-during-its-last-days-in-office-2498058.html

    @ALL
    “The IL&P board should have been aware of the risks, especially when among their number is Liam O’Reilly, the former chief executive of the Irish Financial Service Regulatory Authority.”
    http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=MARKETS-qqqm=nav-qqqid=43958-qqqx=1.asp

    “SEVERAL private firms and individuals with strong political and departmental connections secured lucrative government work over the past two years.

    These included firms now run by former leading figures in Fianna Fail and the Progressive Democrats, as well as a number of former senior civil servants.

    Topping the list is economic consultancy firm Indecon, which was paid a total of €1.6m in an 18-month period to provide services for eight government departments.

    The company’s chairman, Paddy Mullarkey, was secretary general of the Department of Finance until 2000.”
    http://www.independent.ie/national-news/firms-and-former-officials-cash-in-on-connections-with-government-1531001.html
    See above how many former senior civil servants get lucrative consultancy work after leaving office.

    So if senior civil servants are so ethical, able to repulse the cornyism surrounding them why with ease, why:
    1. Have almost none spoken out since the collapse?
    2. Why have none ever resigned?
    3. Why did they demand their loss of a performance bonus after the country crashed be treated as part of a pay cut?
    4. Why are they not campaigning for radical reform? Ah, but that would because they are pure and flawless.
    http://www.irisheconomy.ie/index.php/2010/01/28/civil-servant-u-turn-explanations-getting-worse/

    New motto:
    The Irish Senior Civil Service – We Were Only Following Orders.

  31. Via politicalworld.org. Letter from Irish Times (link broken):

    “Patrick Hennessy

    I worked in the DPS ( Department of Public Service) years ago under Ray Mc Sharry a Department which was brought out from under DoF and then brought in again. I think I was the youngest Assistant Principal in the DPS in 1980 and worked alongside colleagues who subsequently went on to become Secretary of Government departments and Central Bank governors. I left in 1982 to the EU and then the UN. What I observed then was a new phenemon of the “special advisor” which grew into that powerful species between Ministers and Departments and were in effect the spin masters of Ministers. Given that the Govt. was nearly always FF and ministers and special advisors just rotated around Ministries for decades senior civil servants became obsequious, to both Ministers and spin master advisors.

    Senior civil servants with a good ability to “hold their pint” and spend at least two or three late evenings around Killdare Street and the Green mixing with the boys from the Dail. Political allegiances of senior civil servants were well known in the house.

    When I joined in 1976 as an Administrative Officer ( the fast stream route where an Honours degree was a minimum requirement) I joined with Graduates in History, Psychology, Geography etc. I was Philosophy. DPS was HR for the Civil Service , linked to the Civil Service Commission, etc. etc.

    Key problems then: (1)Top down micro management (2) Obsequiousnes and an inability of civil servants at the top to say NO (3) Let it leak that you were FF and let the hare sit……….one day a reward would come (4) Never cross a “Special Adviser” (5) Protocol and respect for hierarchy trumps substance (6) Don’t take risks. Doing nothing you get promoted anyway, time servers, doing one thing wrong and you were marked (7) Be one of the boys and slap backs and you will get on.

    So here i am 25 years later and just retired from the UN. Has much changed in the Irish civil service?
    e.g (1) Do they have a transparent performance management system ( 360 degrees) ? (2) Are Special Advisers still running the spin and indirectly the show? (3) Do senior civil servants conviently leak their party affiliations? (4) Does i help to have a pint in the right pub at the right time? (6) Are there still many time serving staff members? (7) What have senior civil servants added to their Honors History or Philosophy degrees they entered with to match competencies to job requirements?

    If anyone is interested I will do a free HR consultancy on this and submit my findings to an independent Committee? CV and referees available on request

    Any takers?

    Patrick Hennessy
    Bangkok”

  32. @Brendan Walsh

    re “Then there were the costs of financial clean-up. These have been especially crippling in Ireland, where banks ran wild in the boom years (and were allowed to do so thanks to close personal and financial ties with government officials).”

    Sound a fair comment to me.

    When bank board members find their way onto State company boards are these bankers not then State officials?
    When friends are appointed to State Boards (because they are friends) are they not then State officials?

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