On the face of it, Paschal Donohoe has been a very successful finance minister. During his period in office strong economic growth has continued, unemployment has fallen and, relative to annual output, national debt has also dropped. The minister projects an image that is intelligent, considered and open. So what on earth prompted me to declare on Newstalk radio last Sunday that Donohoe has been the worst finance minister in the history of the state?

When it comes to judging the performance of politicians, I apply two tests. First, do no harm, primum non nocere.

You may have seen recent headlines proclaiming that a third of global foreign direct investment (FDI) is “phantom” capital. This story was based on a study by the International Monetary Fund and Copenhagen University, which found that an annual total of $15 trillion (€13.6 trn), nearly 40% of global FDI, “passes through empty corporate shells” with “no real business activities”.

The European Central Bank (ECB) is contemplating making extensive use of negative interest rates to stimulate economic activity. It already charges banks to deposit surplus funds with it. Volker Hofmann at the Association of German Banks said that euro area banks already pay €7.5bn a year for the privilege of the ECB holding their money.

A decade ago, the Irish small and medium-sized enterprise (SME) sector faced carnage as bust replaced boom in the property and credit bubbles. The economic crisis and recovery had a profound impact on the Irish SME landscape. Thousands of businesses went bust. Thousands more became zombie firms, hopelessly burdened by legacy debts.

n Irish politics, the plea “don’t hit me while I’m holding the baby” has been reformulated into “don’t criticise me while I’m reforming the health system”. Former health minister James Reilly promised to use universal health insurance to fix the system’s myriad ills. His immediate successor, Leo Varadkar, promised in Fine Gael’s 2016 election manifesto to dismantle the HSE as it was “too large and remote from the frontline” and to replace it with a health commission “focused on purchasing services and care for patients”.
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Thirty years ago this November, the Berlin Wall fell. German reunification followed within 12 months. The results of last Sunday’s regional elections in Brandenburg and Saxony show, while Germany may no longer be divided by an Iron Curtain, its people remain divided socially, economically and politically.
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For the first time, the rate of interest on Irish government 10-year bonds fell below zero last month. Investors now must pay for the privilege of lending money to the Irish government. This phenomenon affects all developed world economies, as interest rates have fallen to levels never previously seen. “May you live in interesting times” is supposedly the translation of a traditional Chinese curse. In financial terms, these are very interesting times indeed.

Elton John tweeted recently that he ensured that the flight of Prince Harry and the Duchess of Sussex to visit him recently was “carbon neutral” through carbon offsetting. The couple flew by private jet to Nice to visit the singer at his home in the south of France for three days. It was the couple’s fourth journey by private jet within a two-week period.

My attention was recently caught by a newspaper headline which stated: “[Paschal] Donohoe takes tough stance on state debt.” The article reported that our finance minister plans to keep the state’s debt on a downward path as he prepares the 2020 budget. I was not reassured. First, while our national debt may be on a downward path when compared with national economic output, it has continued to grow in absolute terms. According to data from the National Treasury Management Agency, the national debt rose from €198.7bn in December 2017 to €205.3bn a year later.

I recently returned from a pleasant holiday in Croatia. On the face of it, the nation is doing well. Its bloody involvement in the wars that followed the break-up of Yugoslavia ended in 1995. Since 2013, Croatia has been a member of the EU and a beneficiary of significant grant aid. Neveretheless, there is ambivalence in Croatia over the country’s membership.

The youth unemployment rate is nearly 30%. According to a 2017 Gallup poll, only 12% of Croatians are satisfied with their income.
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