The green jersey merchants haven’t gone away

We heard a lot about the “green jersey” agenda during the Anglo trial, which finished during the week. It is the name given to the drive to protect the financial system as the crisis hit, taking in the government, Civil Service, regulators, banks and beyond.

Let’s put the events covered in the trial – and the forthcoming cases – to one side. They arose from specific actions and events as the crisis hit. What about the wider picture?

Financial regulation has changed in the meantime and we must hope that the same hapless regulation of the financial system – followed by acceptance that all was well despite compelling evidence to the contrary – could never happen again.

But have we really taken off the green jerseys in this country?

A key part of “green jerseyism” is always toeing the party line. This was problematic in the run-up to the crisis, but it remains a notable factor today among the people who define themselves as members of “ Ireland Inc” – big business, big government and the advisory firms that circle around between them.

Supporting Ireland is a good thing. The country, for example, has a great ability to get behind IDA Ireland’s attempts to lure new foreign investment and to build up multinationals already here. Part of the strength of the way Ireland operates is that when people put their mind to it things can be changed quickly.

Tax arrangements

But there is a flipside here too. Insiders have, for example, used their influence over the years to invent and prolong special tax arrangements that allowed them or their clients to earn more profits. In the build-up to the banking crisis one group of these allowances – relating to property – also created huge economic damage.

The Ireland Inc creed continues to frown upon straight discussion of anything that might be seen not to be in the “national interest”. My first experience of this was during the currency crisis of 1992-1993. Back then there was no euro and the Irish pound was tied to other currencies in a currency band, allowing limited fluctuations. The markets attacked and the pound was one of the currencies under pressure. Most of the banks and broking houses were “onside” in saying the pound would not devalue, with a couple of notable exceptions . The media was put under constant pressure, with a barrage of what would today be called “spin” from government and the financial sector. In the end the inevitable happened and the pound devalued.

It happened again as the financial crisis hit in 2008, when the message from “Ireland Inc” was that everything was okay and the banks were well capitalised. There was a lack of plain talking as the crisis built up and immediately after it hit.

Subsequent documents released from the Department of Finance show that, behind closed doors at least, some feared the worst or had some inkling of it. A clearer acceptance of this, even as late as early 2008 when the crisis was brewing internationally, could have allowed at least some of the damage to be mitigated. The official line was that all was well.

But all has changed after the crisis, of course. Or has it ?

Unfortunately not, or not entirely anyway. Take the debate about corporate tax. Sinn Féin's MEP Matt Carthy may have gone a bit over the top when he said during the week that Ireland was an "enabler of massive tax avoidance". But the accountants who trot out the tired old line about the Irish tax system being " fully transparent" are just as far off the mark.

The reality is that Ireland has been part of an international chain that has allowed big US multinationals to pay ridiculously small amounts of tax – but only one part. At the centre are the US tax rules , a point often ignored in the political finger-pointing from Capitol Hill.

But Ireland and other countries are part of the story here too, and had we not announced the ending of the double Irish tax structure in late 2014 we would be really in the cross-hairs of the international debate. And we might still be, depending on the EU Commission ruling in the Apple case, another area where public debate here tends to ignore the possibility that there may have been some breach of the rules .

Irish banking

The green jersey is also still evident in a lot of the commentary on Irish banking. The sector may now be stable but it is far from fully functioning. In the bubble conditions of last year the government bravely said it would get back all the money put into AIB, Bank of Ireland and Permanent TSB.

In the cold light of the markets now, the best you can say is that it will be an awfully long time before that happens.

We pat ourselves on the back for raising money for half nothing on world markets while ignoring the fact that this is courtesy of an extraordinary programme of buying from the ECB. Just this week Pimco founder and market guru Bill Gross compared international bond markets to a " supernova" which would one day explode. Best to be ready when that day comes.

Sometimes it is best to face problems head on and discuss them openly. The green jerseys can be worn for the next couple of weeks for sure, but that is for another reason entirely.