InBus_Win09_56-96:InBusiness 1-61 11/12/2009 16:05 Page 96
FEATURE | The Last Word
“A LOT DEPENDS ON
HOW NAMA IS
IMPLEMENTED AND A
LOT DEPENDS ON HOW
BAD THE BAD DEBT
PROBLEMS ARE.”
COLM McCARTHY
ON NAMA
THE RECENT PASSING of the NAMA
legislation has divided the country. Personal
opinions aside, Colm McCarthy is of the view
that time will tell if Minister for Finance, Brian
Lenihan got it right. “Governments all over
the world have decided that they have to
have some kind of bank rescue and NAMA is
the form that we have chosen,” he says. “We
will have to wait and see if this is the right
choice because a lot depends on how NAMA
is implemented and a lot depends on how
bad the bad debt problems really are in the
banks. We still don’t know that and it will take
time to come out. In due course, the banks
will have to make provisions for all of the bad
debts and it is very clear that they have not
made full provision for that yet.”
Colm McCarthy holds his report outside the Department of Finance. Leon Farrell/Photocall Ireland.
solely between dithering around for a decade are not getting worse as rapidly as they were, of that there can be no question, and so it is
like we did the last time or getting the so with any luck we could see the bottom important to analyse McCarthy’s view that we
adjustment done as quickly as possible.” sometime in the next couple of quarters. If are likely to reach the bottom of the downturn
Given the choice, most businesses would government sticks to its plans in terms of at some point in the first half of 2010. For
prefer the latter of McCarthy’s suggestions. A getting the budget deficit under control, and if business, a reality check that the worst of our
return to a stable economy and growth would there is a perception that the government has problems may be behind us this time next year
hopefully signal the beginning of the end of gotten on top of the problems that we have, is required. That our problems might not be
what has been the most turbulent business that will have a positive impact for businesses getting any worse does not necessarily mean
environment in living memory. However, and consumer confidence. However, if the that an immediate correction in fiscal policy will
McCarthy believes that we have some way to government were to abandon its budgetary mark the end, far from it. “It’s not going to be
go before we see the back of the bad times. targets, I feel that people will be afraid to just this year or next year, but several years
“It is hard to see any actual evidence from the invest and consumers will be afraid to spend thereafter before we get out of this,” warns
figures that have been coming out of knowing that the fiscal correction is still not McCarthy. “It seems to me that there is a
anything that we would call recovery,” he being addressed.” reasonable chance that we are close to the
says. “However, there are some signs that The need to stabilise and protect the public bottom, but how quickly the recovery is going
things are not getting worse, or at least they purse has to be government’s first objective, to be is anybody’s guess. We have a damaged
banking system as well as problems with the
“IF THERE IS A PERCEPTION THAT THE
public finances; the economy has lost
competitiveness and there is a continuing need
GOVERNMENT HAS GOTTEN ON TOP OF THE to get costs down across the board. On top of
PROBLEMS THAT WE HAVE, THAT WILL HAVE
that, I’m sure we can expect similar reviews of
public spending over the next few years so
A POSITIVE IMPACT ON BUSINESS AND
more cuts will be forthcoming. We simply
CONSUMER CONFIDENCE.”
have to be realistic and understand that we
are still in the very early stages of this.”
96 InBusiness Winter 09
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