The Cedar Lounge Revolution

As an addendum to the piece last weekend about Charlie McCreevy I very grateful to the person who sent me this interview in Hot Press from last year with the man himself…

The economy…

JASON O’TOOLE: Are things going to get worse?
CHARLIE MCCREEVY: We are in for a period of lower and slower economic growth worldwide. I hope the big tsunamis of the financial sector that have occurred – I would like to think that the worst of that is out of the way. I can’t predict that better than anybody else. But the consequences of all this – no matter what’s going to happen in financial areas – are being felt at the moment in the wider economy. We’re going to have a period of slower economic growth – minus economy activity in some countries – for a couple of years. That’s going to have inevitable consequences in terms of high unemployment; greater pressure on the public finances etcetera. That’s an inevitable result of all of this. If you check a year ago, I said that I thought it would happen.

Do you think the collapse of our banking system demonstrates that free market economy doesn’t really work?
I don’t think it proves that free market economics don’t work. I think it only proves that everything at some stage goes to excess…

But shouldn’t these bank guys be reined in – they got too greedy and too selfish.
Well, it’s not just bank guys! Hold on now! It’s the whole lot of us. [I think not Charlie, I think not] Everybody partook of this. You know what I mean? It’s just the system maybe goes too far. But I don’t think it proves that the free market of economics doesn’t work. I think free market economics creates greater wealth. I’m a great believer that you must create more wealth. You can have differences of opinion as to how you go about doing that – and there are, say, people who believe in having a total socialist approach of doing it. I think that’s a failed economic philosophy. But one thing you have to agree on – you have to create wealth in the first place and then we have a separate debate as to how we should distribute that wealth, so that some people have a very, very total socialism approach, some people have a more free market approach. You need a banking system for the economy to work; whether it’s going to be an economy run on total State control principles or on total free market principals, you do need a banking or money system to make it operate. But I don’t think you can deduce from, say, the problems in the banking system worldwide that free market capitalism doesn’t work.

More on the economy…

In regards to semi-state bodies, do you think that perhaps the likes of Aer Lingus should still be under the government’s control?
I don’t think you can say those industries would be in better shape – or it could be better – if it was still owned by the State. In fact, all the evidence – in my view – would be the opposite. Private business principles are the best ones to operate within. Business will thrive better in private enterprise. But I have always said that there are many incidents where that is not always possible and we should never be prepared for ideological reasons to rule out another type of solution. So, there were many State industries privatised before I was Minister for Finance; there were some done when I was Minister for Finance – Eircom being the biggest one that we did. Since I left the government has partially privatised Aer Lingus. The government now only own 25% of Aer Lingus. So, they adopted a pragmatic approach. Your question is a valid one – whether the enterprises are any better. I don’t think the airline business is any worse on account of Aer Lingus being 75% privatised. The competition in the airline business has been good for everybody. I mean, the ordinary people of Ireland can go places cheaply, where they could never even dream of going when I was growing up.

If you look at when Eircom was privatised, only a few months later the shares fell dramatically…
No, it didn’t. It took a year. I think it took 14 months to be precise…

But that’s a bit of a disaster?
No, it’s not because – remember in that period of time the German telecom dropped by over 50% as well. Telecom stocks all over Europe were at a peak. We, luckily enough – and I take a little bit of the credit for this – actually sold Eircom into the market at just about the height of the telecom boom. And the next year after that – right around Europe – the market in telecoms went from up there to down there. But markets go like that. We actually got Telecom sold off into the private market at the height of the market. We did the taxpayer very good because we got billions of euros for it.

But didn’t ordinary Joe – ordinary Irish citizens – on the street who bought into Telecom at the time lose money on it?
But the ordinary Joe had up to a year he could’ve sold the shares and made a profit [hmmm... okay]. If I remember correctly now, 575,000 people applied for shares. That meant at the time there was 3.1 million people in the country who didn’t apply for shares – and couldn’t afford them, right? The money I got – the State got – for Telecom I put it into, say, the pensioners reserve fund; I paid some debts off, etcetera, and the taxpayers – the ordinary Joe and ordinary Mary – benefited by that. What happened was, the telecoms bubble just dissipated – but it didn’t just happen to the Eircom stock, it happened to all telecoms.

The PDs…

The PDs are in the process of disbanding. They turned into a bad joke in the end, didn’t they?
You must remember that the PDs lasted longer than Sinn Fein/the Workers Party, Democratic Left, Clannna Phoblachta. They have been singularly more successful than any of those parties in what they’ve achieved – and that should be recognised. They lasted over 21 years. They spent a lot of that time in government. They contributed a lot. They are absolutely detested by the Left in Irish life and by a lot of the media, but their achievements should be recognised as well. An objective look at their achievements would prove the things I just said.

The EU…

What do you think of the idea of holding elections for voting in EU commissioners? Shouldn’t the public vote on this rather than having them nominated by the Government?
There were two ideas floating around there for a while. That all of Europe would vote for the President of the Commission and then she or he might pick the individual commissioners. It’s a theoretical utopia. I can’t see that working.

And on Lisbon?

Do you think there will be a second referendum on Lisbon next year?
I don’t know, to tell you the truth. It’s primarily a matter for the Irish government and I’m sure they will have consultations with the EU partners. But the Irish government has been pretty forceful in saying that no decision has been made yet. I’m just an ordinary citizen, who happens to be EU Commissioner. It only falls into my remit as an Irish citizen – it doesn’t even fall into my responsibility as Irish Commissioner. It’s entirely a matter for Brian Cowen and the rest of the Cabinet to judge.

But do you not fear that if we don’t sign up to this treaty that Ireland might become isolated?
You must remember that each country had to ratify this particular treaty. If the only answer to the question is ‘yes’, there was no point in putting the question to any of the other 26 countries either. You must remember, this is a club. The rules of the club are being changed. Existing members of the club were asked to agree to the changes in the rules of the club. Ireland – by our own constitution – has to put these questions to referendum of the people. The Irish people said ‘no’. And that decision has to be respected by our European partners as well. There is no provision in the existing treaties to isolate anybody. There is no provision to throw out anybody, unless unanimously all the existing members of the club agreed to throw you out. And I doubt now, or in the future, any Irish government is going to unanimously agree to throw themselves out. So, therefore I think the question is not really the proper one to be addressed.

Why?
A – because it’s not correct. B – there is no proper procedure for going that direction. And C – it’s not the right thing to do. It’s not the right thing to say to people. Who came out and voted? 53% of the Irish electorate turned out. I read some interesting post-referendum statistics which suggest that a considerable segment of that 53% were actually people who hadn’t voted in the 2007 Irish General Election. So, therefore people did take the issue very seriously. So, that has to be respected.

Metaphorically speaking, you’ve been known for occasionally putting your foot in it…
All over my life (laughs)!

Like recently when you said you’d be “insane” to read the Lisbon Treaty. Do you have any regrets about any of these foot-in-mouth comments?
Not one of them even. I came to the view a long, long time ago that there’s enough people being cute and everything else. “Don’t say this!” and “Don’t say that!” It’s just not my style. Early on in my political career – it became a dictum at the time – I said, “One can always afford to tell the truth in Irish politics but no one would believe it!”

Ah, homespun wisdom and bluff populism. That guy’s a lot more ideological than he likes to make out. A lot more.