Irish Finance Minister: Concerted Attack On The Euro Zone

The Irish Minister for Finance, Brian Lenihan,  says the recent surge in borrowing costs for some countries suggests there is a concerted attack on euro zone nations, warns reporters of a cosy cartel operating amongst economists and claims that the underlying trends indicates a remarkable turnaround for the Irish economy.

“There is a concerted attack on the euro zone, there is a concentration on weaker countries.”

Brian Lenihan


Ireland will counter a concerted attack that is threatening the euro zone by bringing its finances in order helped by a “remarkable turnaround” in the economy, the finance minister told reporters in Dublin on Friday as he criticized journalists for overstating Ireland’s economic difficulties.

Minister for Finance Brian Lenihan criticized some journalists for overstating Ireland’s economic difficulties to the detriment of the country, speaking at  a conference in Dublin Friday, the Irish Times reports.

At a conference titled “Confidence in the Media” Mr Lenihan said while most reporting had been fair, journalists needed to be aware of the self-fulfilling nature of any “doomsday scenarios” they wrote.

Journalists could undermine or promote confidence in the economy, the Irish minister stated as the price of insuring Irish government debt rose to all time high with a CDS spread of more than 500 basis points.

Climate of Fear

He acknowledged there was a “climate of fear” about the impact of financial markets on the economy, the loss of jobs and the stability of the banking system.

A crucial element in dispelling fear was the provision of accurate, reliable and balanced information, he lectured the professional media workers in Dublin.

“There is a tendency to paint black-and-white pictures, to overstate difficulties, to use sometimes emotive language. And God knows, our problems are bad enough without exaggerating the reportage to present doomsday scenarios,” he said.

Adding that he did not agree with those who claimed the media did not report enough good news.

It is facile to expect reporters to engage in “national back-patting,” he said,  and that journalists have to be skeptical in their treatment of stories.

Cosy Cartel of Economists

However, skepticism should not be reserved just for government, or political parties, and the same rigor should be applied to the reporting of interest groups and representative bodies.

Agendas were not exclusive to politicians and governments, and many interest groups had better communication resources than political parties, the Irish minster informs. Adding that a “cosy cartel” is operation amongst  economists, whereby they do not go head to head or disagree in public.

Euro Zone Under Attack

Ireland will counter a concerted attack that is threatening the euro zone by bringing its finances in order, helped by a “remarkable turnaround” in the economy, the finance minister also told the media as the premium investors demand to hold 10-year Irish bonds rather than German Bunds rose to a new euro lifetime high of 451 bps, a day after a surprise fall in Ireland’s Q2 GDP  posed a new threat to Dublin’s fiscal consolidation efforts.

Lenihan says Ireland will do its utmost to defend the euro currency from the market attack which he said was manifested in “disturbingly” high yields demanded for its bonds at sales on Tuesday.

According to Reuters (Dublin) the finance minister told reporters on the sideline of the conference:

“There is a concerted attack on the euro zone, there is a concentration on weaker countries.”

A Remarkable Turnaround

Data published Friday showed that the Irish economy contracted by 1,2%  in the second quarter of 2010, and that growth in the first quarter was less than previously estimated.

In recent weeks the extra yield investors demand to hold Irish bonds over German bunds has surged to record highs due to investor concern about the State’s ability to manage the cost of its bank bailout and reduce the budget deficit.

However, according to Mr. Lenihan, undeterred by the data,  the underlying trends indicates a remarkable turnaround for the economy.

“Exports are growing. New order books are expanding and business confidence has improved markedly since last year. Tax revenues are stabilizing, public expenditure is under control and our budget deficit will shrink next year,” Lenihan says.

Read also:  The big gamble: The inside story of the bank guarantee

Question Of The Day

Now, here’s the Econtwist’s Question of The Day:

Who is best at producing conspiracy theories?

A: Politicians?

B: Journalists?

C: Even?

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Irish Sovereign CDS Spread Exceeds 500 Basis Points

Ireland And Portugal Close To Collapse

Irish CDS Spreds Back To Record High After Bond Sale

Media Freedom Threatened In Most European Countries

Estonian Newspapers Protesting With Blank Front Page

Euro Area Under Massive Speculative Attack

Attacks Against Spanish Financial Markets?

Traders Short Record Amount of Euro

Dangerous Economic Misconceptions

Are Governments Producing Conspiracy Theories?

Markit Credit Wrap: The Week in Perspective

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