The start of the year feels different, much more hopeful. Globally the economy is improving even though the risk remains of a second recession. The longer the recovery kicks in the greater the likelihood that consumers will switch from saving and debt reduction to spending again, taking up the slack from fading government stimuli. That's the script and if commodity prices especially oil doesn't strangle the recovery, globally, we could be out of the woods in two years. Given the huge degree to which the Irish economy is leveraged to exports, lifts elsewhere are of crucial importance to us but most of Ireland's difficulties stem, not from a cyclical downturn in the global economy or the collapse of Lehmann Brothers as Bertie's Book of Economic Fairytales would have us believe, but from home grown gaffes. A return to global economic growth this year and next of 4% should, eventually, lead to even stronger performance by the Irish economy but it still will not generate the taxes needed to bridge the yawning deficit.
Brian Lenihan gets it. His December budget was a clear statement that he is stubbornly opposed to further income tax increases and that the burden has to, largely, fall to spending cuts.
That means trimming fat wherever it can be found from Government spending, while widening the tax base. That's why Brian Lenihan's illness couldn't come at a worse time for his country and he knows it. Lenihan has fought hand to hand at the cabinet and applied his considerable intellectual prowess to win the arguments. Let's not kid ourselves many in the cabinet have rubber in their spines and share, neither his insights, his vision or his courage.
Brian Lenihan has us on the right track which is precisely why sovereign bond investors are beginning to see Ireland in a different light than other distressed economies. But as a pragmatist Brian Lenihan will also know that Ireland can't afford to continue into 2010 dependent entirely on the next set of medical results he will get. Contingency plans must be made now. Any successor, even a temporary one, cannot deviate from the template and must be prepared to fight it out at Cabinet and with powerful vested interest groups including public sector unions committed to putting the Government under maximum pressure despite the clear lack of public support for strikes and disruption to services. The job needs a lion with a commanding understanding of the brief and prepared to put country before short term political gain.
Looking around the cabinet who fits the picture? Unlike Brian Lenihan, most of the seasoned Ministers, much like most senior bankers, are relics of Ahern's last economically destructive reign and share Brian Cowen's instinct to avoid culpability. Dermot Ahern certainly comes across as having steel but is it selective? The Minister for Justice sat on his hands while a large proportion of the Irish police force marched in quasi uniform on parliament. Had that happened in the US or in Britain we'd still be reading about how the army was called out. Instead he gave more time to Thierry Henry's foul and only faced off the GRA when it gaffed and announced it was considering breaking the law by balloting members for strike action.
Rather, Brian Cowen might be better advised to use the Seanad backdoor to appoint a top drawer Chief Financial Officer from the private sector as Minster for Finance, someone with experience of managing complex and diverse structures and who can follow in the footsteps of Brian Lenihan without flinching. In the impending reshuffle the job of junior Minister for Finance could be filled in this way helping the country and Brian Lenihan the best way possible.

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