After the Storm

When Brian Cowen came to power in May this year, there was little sign of the impending storm that has recently engulfed the financial markets. Cynics might suggest that the incumbent Taoiseach Bertie Ahern saw it coming earlier than most and decided to make an exit while the going was still relatively good. Brian Cowen, in effect, was left to clean up the mess.
Within a matter of months of becoming Taoiseach, Cowen was firefighting. Inevitably, as a result, the recession into which the country has been plunged, and the turmoil which has followed, were the main topics in the first part of the Hot Press interview with the most powerful man in Ireland, published last issue. But the exchange, which took place over two lengthy sessions, covered a far broader canvas. Here, then, is An Taoiseach in less embattled mode...

Fine Gael leader Enda Kenny has been giving you a hard time with what are probably best described as jibes.
He’s the leader of the Opposition – it’s an adversarial system. I don’t mind the attacks. I think they’re predictable. Fine Gael still can’t hide their disappointment at not winning the last election. In Opposition, they are simply opposing everything – even though they are claiming we should have a responsible budgetary policy, they won’t support any of the individual decisions that have to be made to bring that about. That’s fair enough, if that’s the way they want to play it. I think people can see through that sort of double-talk. In the last election, we all put forward a programme based on the economy growing by 4% per year – that’s no longer relevant now. It’s a new situation we’re in and it’s my job now to manage the situation as it is – not like they or I would like it to be. We had that political battle back in 2007 and we emerged the victors. People supported us, and what we have to do is gain their support again in the future by doing what’s necessary in the present new situation.
On the subject of the electorate rejecting the Lisbon Treaty, it must have been very frustrating to start your tenure as Taoiseach on such a negative note?
It was a very disappointing outcome, particularly considering that I had only taken up the job on May 7 and I said it was the first political priority of the government. The opponents had pressed a lot of buttons that raised fears amongst people. So we are left now wondering where do we go from here? We have been major beneficiaries of the whole European Union project. During the last 35 years, the European Union has been the vehicle through which we matured and developed. It helped to shape the society we are today. We need to take into account that we’re an open economy and much of the investment in this country is because of the EU. I firmly believe that we should try and avoid doing anything that would put that at risk.
Will there be a second referendum?
There’s no decision yet. But the concerns that people have raised, I have asked the European Institutions and Member States to tell us in what way they can clarify those. These are issues that can be dealt with. I really want to make the point that the one thing we’ve seen in the recent financial crisis is the access to equity from the European Central Bank. If we were on our own (pauses)... we’ve seen what happened to Iceland on their own. We need to internalise that more – that we are inextricably linked up to the European economy. Look at the statistics – 40% of our exports go into the European economy and a million jobs in Ireland depend on the fact that we have access to the European markets. These are huge figures that we shouldn’t take for granted. This country has to reflect where we are in relation to Europe. As we go into more difficult times, the need for us to bring some certainty to our relationship with Europe is a very important factor.
Speaking of Lisbon, it was speculated that there was tension between you and French president Nicolas Sarkozy.
No. On a personal level, we have a good rapport. He has a job to do as head of the European Union and he offered to come to Ireland to listen to views – not just mine, but other prominent politicians – to get an understanding of what might have been behind the rejection of the treaty. His visit, in that respect, was a good thing.
Is it true that you were annoyed with his comments – seen as almost a demand – that “the Irish will have to vote again”?
No. We in Ireland have to recognise that others have an opinion about the European Union and the impact of us not being able to ratify the treaty. We can’t just expect everyone else to have no view when we make decisions that have an impact on their positions – and on whether or not what’s agreed between us at government level can, in fact, be implemented.
What are you planning to do to rectify the ongoing crisis in the health system?
We have to get better outcomes for the very considerable resources we are putting in. When I was Minister for Health, from 1997 to the year 2000, my final budget allocation was equivalent in euro terms of about €3.2 billion. We’re spending €15 billion now. That’s just eight years later! So, if it was simply down to resources the issue would be solved, but the fact is there are structural problems. We will not get to where we want to get to, in our health service, if we honestly believe we are going to build on the very same construct that we have. We know already that the status quo-plus won’t work. The bottom line is we owe it to the taxpayers – who are providing 28 cent of every euro that’s collected in taxes into the health service – to do better.
What type of reforms are needed?
We need to think outside the box. Find more flexible arrangements. Developing specialities in centres of excellence will contribute to improving the health system. And, at the same time, having other parts of the treatment regime provided as locally as possible on the basis that patient safety has to be our first concern. In the past, we had more than half of our GPs in single person practises; that was fine then, but not nowadays. We need to make sure that we can provide locally as much services as possible rather than having to refer them to the hospital every time it goes beyond simply respiratory problems, or you have to go for tests, or have minor surgery. Getting all that done in a primary healthcare setting will ensure that the hospitals will have the appropriate patients for hospital care and that the A&E doesn’t become the extension of all the GP dispensaries in the area... or where people bypass the GP and head straight for the A&E.
On the subject of education, what are the key areas for the future?
To create the jobs for the future, we need people internationally to see Ireland as a centre for advanced research, in terms of science, technology and innovation. That’s a huge strategic challenge. We need more PhDs. The sciences are not as popular in the curriculum as they once were. In my opinion, the sciences have to be really up there, in terms of proper funding so that we produce the stream of people to come into our Third and Fourth Level system – and be the innovators. We need to get the sciences fashionable again with young people.
How can Ireland create more jobs? What sort of industry should we be cultivating?
We need to build what I describe as a ‘smart economy’ focusing on all of these areas where you are trading knowledge – such as software export. In fact, we are the second biggest software exporter in the world. The top companies in high-tech areas have located here and are bringing their research and development capability here. We have a strategy for science, technology and innovation that’s seen significant investment and the whole thrust of our policies going forward is to take our own winners from Irish business – these high performance start-up companies that Enterprise Ireland are supporting and are involved in areas which have real scope of potential for the future – and to internationalise Irish business.
That sounds great but what does it mean?
The international trading sector is a growth area for the future and Ireland is well placed to exploit it. For example in the year 2000, 21% of our total output was the services industry – last year it was 43%. It’s reckoned by the year 2025, 70% of our national output will be in services. We have to continue to support manufacturing where we can have competitive advantage, particularly in the food industry, for example. Also, high-end manufacturing where we’re seeing many research and development projects being allied to manufacturing plants, co-locating manufacturing in Ireland. That trend is happening now in the multinational sector. We will continue to invest in education, research and development – supporting the high-tech industries. That’s where I see the future for Ireland.
What are the major challenges facing Ireland as an economy?
There are four. The first is that in the new economic situation, we have to cut our cloth to our measure. We are not in a position to sustain the present level of spending. We need innovation and to provide better output for the considerable resources the Irish taxpayers provide for public services. The second thing is – to communicate our economic recovery strategy for the country. We need budgetary discipline – but that in itself isn’t sufficient for the essential precondition for us to regain more prosperous times when the international economy picks up after this recession is over. The economic recovery strategy will identify those areas where we can compete and grow even in difficult circumstances. That involves continuing with the large capital investment programme we’re doing at the moment – building up our infrastructure. The third thing we have to do is to implement our plan for public sector reform. Myself and the Minister for Finance will be bringing detailed proposals for government in the coming weeks and communicating that policy once it’s approved by government.
You said there were four challenges!
The fourth thing is more obvious: to continue to try and deal with this present international financial economic crisis. There is a big concern that the banking sector needs to continue to do business with Irish business in terms of extending lines of credit so that Irish businesses can get through this difficult period. That’s something I’ll be working very closely on with the Minister for Enterprise and the Minister for Finance.
Vincent Browne has repeatedly made the point that there is no real effort to redistribute wealth to the least well off. In fairness, doesn’t he have a point? 
I don’t accept this view. There is far more equity in the Irish taxation system now than there was 20 years ago. The top 1% of earners pay 25% of all income tax. I think very many significant changes have been made to improve the equity of the tax system. I mean, four-fifths of all workers now still have an effective tax rate of 20%. We’ve taken 550,000 working people out of the tax net altogether. One third of workers don’t pay any tax at all. That shows that the burden is being spread. The gross income of people on the average industrial wage, which is €34,500 per year – 10 years ago it was half that – has increased by about €15,000 in the period from ’97 to 2007. Despite the fact that people are thankfully earning €15,000 on average more per year, they are paying €1,000 less in tax because we cut the rates and increased the tax credits and increased the thresholds on which income tax starts to be paid by working people. On capital taxation, when Ruairi Quinn was Minister for Finance, only 4% of all taxes paid came from capital taxes – we trebled that. We brought that up to about 12%. So, we brought down tax rates but increased tax revenues under all headings because cutting tax on labour and on companies – bringing it down to 12.5% – meant we had more companies and people doing more business, generating more jobs, generating more tax for the exchequer.
As far as the disadvantaged are concerned, the State has become a lot more bureaucratic in its dealings through social welfare.
Our social welfare budgets have been greatly increased. We have greatly improved the rates of payments for those who are vulnerable, disadvantaged, disabled, or pensioners. We have also ensured that there is a proper safety net for people who are temporarily out of work by providing payments as they seek other work. Now, we have to find an affordable way to do all this, given that we won’t have the same level of resources as we’ve had up to now. Many working families with young children on low incomes, in fact – when you take into account the direct support – they get support in excess of their gross income from the State. They don’t pay any tax and we also provide some supports for them, child benefits etc. The best poverty-buster of all is to create jobs. There are more than 2 million people at work, which increased by 600,000 during the last decade. We are now losing jobs because of the difficult times we’re in, and that’s unfortunate – but we have to minimise it to the greatest extent we can.
What international political figures have inspired you?
One would have to be impressed by Helmut Kohl in terms of the unification of Germany. It was a huge achievement. Bill Clinton was a very impressive politician. He is a great communicator, a very bright man and a very impressive political thinker. I’ve read a lot about the various policy think-tanks that he’s been associated with. Very instructive. He changed the Democratic Party in America by helping to find a new political narrative for the Democratic Party. You can see how Obama has moved that onto the next level. It’s fascinating to examine how Clinton recovered his presidency after an uncertain start in his first 12 or 18 months and was then granted a second term in office.
Are there any other politicians that stood out?
I met with Nelson Mandela. He is the Gandhi of the latter part of the 20th Century. He is hugely impressive in terms of what he represents. The strength he showed during that period of confinement and then his ability to show leadership when he emerged from the cinder block is awe-inspiring. You’d have to point out that FW de Klerk, too, was wise enough to comprehend that the philosophical foundation on which apartheid was structured was unsustainable. Tony Blair was very impressive. One had the knowledge when talking to Blair that you weren’t just speaking to the British Prime Minister but to someone who was prepared to listen to the angles, and approach these arguments afresh, rather than simply defending long-term British positions. He was a man of his time. Bertie and himself struck up a very close political relationship, which undoubtedly helped to get us over some of the bumpy patches of the latter parts of the Peace Process.
What has been the reaction of your constituents to you becoming Taoiseach?
In fairness, there is this thing that when you become the Taoiseach people refer to you as ‘Taoiseach’. That’s out of a very genuine respect for the office. One is very grateful for that because it’s important that the office of Taoiseach – whoever is the incumbent – is looked upon with respect. I mean, colleagues of mine call me Taoiseach. I always called my previous bosses – whether it was Albert Reynolds or Bertie Ahern or, indeed, Charlie Haughey – Taoiseach. I even addressed John Bruton – when he had the job – as Taoiseach. People do that here locally and in other parts of the country – and I am very grateful for that. We are all getting used to this arrangement now and it is different, that’s a fact. At the same time, I’d be very hopeful that they wouldn’t view me any differently in terms of my demeanour and how I behave towards them. I hope I’ll always be a person who is seen to be listening and discerning and mindful and sensitive to their issues and how they see the locality.
On a personal level, how are you handling the heightened level of interest in your personal life?
There’s a level of scrutiny there because I’m a public figure – that’s unavoidable. I acknowledge it as a fact of life, but I certainly won’t be encouraging it. We all need a private space. We all need the ability to do our job and, at the same time, step back from time to time and feel that you have a bit of space to enjoy other aspects of your life.
I’m gathering we’re not going to see your home featured in VIP magazine anytime soon?
I don’t think there’s sufficient in here (pointing around sitting room) to interest such a sophisticated readership anyway (laughs)! I haven’t enough on display to merit that! But I’m not one who is comfortable promoting that type of culture. That’s not for me. That’s not to say others who have different styles are less valid. It’s whatever people are happiest with themselves. There is this a need to satisfy public demand – or perceived demand – by the media. You have to try and find a balance. I think most people, to be frank, see enough of us politicians anyway.
But even though you’re a private person, you obviously need an ego to do what you do?
Of course there’s ego in politics. You can’t stand up in a public forum and give out your opinions there unless you have an ego to come out and do it.
Your hometown of Offaly is called the ‘Faithful County’, and you’re known yourself as a ‘loyal’ politician.
It’s what I would call ‘straight dealing’. You can’t be a fair-weather friend. When I made the point about loyalty being a virtue – at the time when the Taoiseach was under attack in the no-confidence vote in the Dail – it was then portrayed that I regard it as the only virtue in politics. I don’t regard it as the only virtue, but it’s an important part of a relationship. Sometimes people try to suggest that being a loyal party man is a person who takes their focus off the national interest in all circumstances – I would never do so. I’m loyal to both party and country. But being loyal – in the proper sense of the word – is not about deferring one’s judgement or not being prepared to give one’s opinion – but you do it within the appropriate forum. You do it internally. Otherwise, it’s an à la carte aspect to party politics, which doesn’t really serve either the individual or the party well. Being prepared to undertake disciplines of membership of a political party enhances your opportunities to progress in politics – when you think about it – because then you become a person upon whom people can rely. You can be entrusted with confidences, with responsibilities, with doing a job for the party.
You talk there about straight dealing, but people have a perception of politicians as dishonest?
OK. There are times when we don’t live up to our best. That’s happens in all walks of life. The unfortunate problem is that politics is judged on the basis of some sort of politically correct perfectionist model and if you don’t live up to that, then there’s a reason to denigrate politics, generally. I think that’s a very absurd and false analysis to adopt, because it’s corrosive really. There are times when we do things that we wouldn’t be proud of. There are times when you should have been a bit bigger about things – that will happen – but you’ve got to be honest with yourself in those situations. Acknowledge it when it happens. At the end of the day, we are all human, we are all fallible.
When Albert Reynolds became Taoiseach, the press labelled his supporters as the Country and Western Gang. According to the papers, you’ve got the so-called ‘Dail Bar Lobby’ gang.
There’s a lot of nonsense that goes on in the press. At the end of a long day, whether it’s there or somewhere else, you sit down with friends and relax and talk about everything – except politics. You don’t talk about politics when you’re socialising. It’s part of what you do to deal with the heavy workload. Also, you have friendships that span political parties. I enjoy socialising. I enjoy relaxing with colleagues and I enjoy the banter. A lot of it is relief of tension – take it handy for an hour and relax. Don’t take yourself too seriously. It’s a good tonic.
That makes it all sound too pleasant to be true.
But it’s true: you have people you like from various different parties and you can just sit down as two individuals and chat about each other’s families and how things are going – it doesn’t have to be this characterisation of a battlefield all the time. There are some journalists who like to portray politics as some kind of unseemly exercise carried out by people who carry vindictive hatred around the place all the time, trying to see if we can get one up on each other. That’s just stereotyping – there’s a far greater generosity amongst people in politics.
I heard that in your backbencher years you once phoned a colleague, pretending to be Charlie Haughey...
Yeah, that’s in the folklore. It never happened but it shows you how stories can get legs. There are a lot of anecdotes, but I just feel that the Dail Bar is the only private bar in the country that you can go into as a members’ bar. I find that we have heavy exposure, on all fronts, in terms of everybody knowing everything about us, so we should try to keep something sacrosanct. What goes on in there, in terms of craic and anecdotes, is for there, and for the members. There are many you could refer to, but I don’t like referring to any of them in public because sometimes people might find them hurtful and they’re not meant to be. We all have families and relatives of people who are referred to in these stories and I wouldn’t like anybody to take offence where none is intended. Sometimes these anecdotes mightn’t play as well out in the public view.
But isn’t it true that you are good at mimicking?
That probably is true. There’s an ability of mimicry in my family. This really arises out of retelling stories – funny incidents. The real wit and humour I enjoy is recounting actual things that happened. I remember in the pub one day, serving guys who were on shift work. It was the 1972 or ‘76 Olympics. There was a swimmer called Cornelia Ender who won, I think, six gold medals. She was an East German and, as we know now, a lot of these athletes were, to put it mildly, ‘manufactured’. I remember the commentator on the sports programme – whatever it was, the 200 metres freestyle or whatever – she was going to win her sixth medal and he was making this big case of this brilliant swimmer. And she won her sixth gold medal as she hit the final wall, and the guy at the counter said to me: ‘I don’t know what that fella’s getting all excited about! Why wouldn’t she be a good swimmer and Germany surrounded by water?’ That’s not really funny, unless you know that guy who said it – and the way he said it. Here was a guy who knew it all – but he obviously knew very little!
During your Hot Press interview last year, you said about the family pub: “I learnt far more there about human nature than I learnt in any university or school. I think it gave me a great insight into people.”
It keeps you grounded. You’re less inclined, hopefully, to be pompous or to take yourself too seriously. It’s very interesting meeting people. So, you find out, what seem like very ordinary people live extraordinary lives. Out of that then, you don’t take an individual for granted – and you refuse to be stereotyped or stereotype others. People miss out on the great variety of life if they lose that natural sense of enquiry.
Curtailing off licence hours smacked of the 'Nanny State' mentality...
Alcohol is a substance that’s never been taken lightly; it has been subjected to a licensing system. There have been a lot of changes in licensing laws in Ireland during the last decade. We are just trying to find that sensible balance. I think the majority of people are happy enough with the arrangements.
Banning the sale of alcohol after 10pm is hardly going to eliminate after-hours public order offences.
There’s also a need to look at the fact that a lot of assaults occur where people congregate at night, such as fast-food joints. As people are coming out of one place onto the street, a sort of a free-for-all attitude develops and suddenly arguments start and altercations begin and someone throws a fist or a bottle. Then the Gardai and hospitals are involved. The taxpayer is paying for all this! No one has the right to expect the taxpayer to accommodate your excesses. I think that needs to be tightened up.
So, what advice would you give young people in relation to alcohol?
Just find the balance and keep the head, basically. I’m all for people enjoying themselves. I wouldn’t be prudish about it – we were all young. There was a great saying, ‘I’ll go anywhere within reason – but I won’t go home!’ There was a bit of that (laughs) when I was younger. Young people should be able to go out and enjoy themselves. I remember being in Sorrento once on holiday with my wife and walking down the street late at night, and the young and old were out enjoying each other's company and there wasn’t the same sense of an alcohol-fuelled atmosphere. People seemed to be behaving with moderation. I don’t welcome a boozing sort of culture coming into this country. There’s an aggressiveness at certain hours of the night that I wouldn’t have seen in the past. It’s a new phenomenon.