Irish economic meltdown - a crisis communications perspective

Until recently the Irish economy was known as the Celtic Tiger – these days it looks more like a white or perhaps green elephant.

Everyone knew that Ireland was going to have a bailout foisted upon it, whether from the EU, the IMF, the ECB or all three. Irish banks, now known as zombie banks, are in tatters and the government in a state of collapse but still two days before the inevitable rescue package the Irish government continued to play down the level of crisis.

Prime Minister Brian Cowen said, ‘The strategy being pursued by Government has addressed the difficulties facing the banking system, is bringing sustainability to the public finances and is resulting in ongoing improvements in competitiveness.’

He went on to say that his government was not looking for immediate outside assistance. It seems two days is a long time in politics because yesterday he said, ‘The European authorities have agreed to our request’ and a bailout accepted.

So what happened in two days? Why was everything under control and a bailout not required and then 48 hours later the PM had to don the hair shirt and proffer the begging bowl?

Well of course nothing changed in two days - what we are looking at are two different views of the same narrative.

International financiers and EU policy makers feared that if Ireland wasn’t shored up, the contagion would spread to Portugal, Spain and beyond (it still could), while the Irish government were dead set on saving their skin and didn’t want to accept the inevitable austerity measures that would be a condition of any bailout.

Now the greens seem to have triggered an election that the government say will be held in January - that’s if it can hold on that long. So a bailout is being put in place and it looks likely the government will be booted out of office in short order.

The best crisis communications in the world couldn’t save the Irish government or the Irish economy but surely accepting the reality of the situation and not engaging in wilful obfuscation would have been a better way to go instead of saying ‘we have the situation under control’ to then hitting the brakes and executing a spectacular u-turn.

So perhaps it’s not that the Irish economy is a white elephant, it’s the elephant in the room that the government was unable or unwilling to acknowledge.