Prudent Paschal plots a steady course as his star continues its rise to top

HE’S BEEN hiding in plain sight. Because of his kingmaker role in the Fine Gael leadership contest and the sharp focus on Leo, the stellar ascent of the Finance Minister isn’t properly acknowledged.

Paschal Donohoe now finds himself in a pivotal role analogous to that of former UK chancellor Gordon Brown. The often dour Scot became half of a dynamic duo in New Labour’s Blair/Brown era.

While the leader is off doing his showbiz glitzy pirouettes in his sexy shades, the hard grind of managing the economy and the public finances falls to plain Paschal. Leo ramps up election hypes and coalition one-upmanship while Dreary Donohoe is back at base boringly balancing the books.

His career path from Cabra CBS to the most important Cabinet member at 44 wasn’t always predictable. Graduating from Trinity College, he was selected by multinational Procter & Gamble for their elite executive incubator system. They and Diageo were palpably disappointed his passion for politics diverted him away from his corporate career from 2004.

Donohoe’s early forays into politics proved problematic. Mostly because the inner-city deprivation of his Dublin Central constituency is tough territory for Blueshirts. FG had no seat there.

He failed to become a TD in the 2007 General Election and again defeated in the by-election of 2009. But as Dublin city councillor and senator he persevered. Assiduously working his base area, despite redrawing of the constituency, his big breakthrough came when topping the poll in the landslide 2011 election.

Enda Kenny was his best mentor, fast-tracking his promotion three times and plucking the fresh backbencher from obscurity to replace Lucinda Creighton as Junior Minister for European Affairs, which involved leapfrogging a multitude of longer-serving FG TDs.

Paschal (right) and Enda developed a close working relationship around EU summits and he was elevated to the role of Transport Minister in 2014. Then he landed the plum senior Cabinet post of Public Expenditure and Reform a mere two years later and found himself substituting for Michael Noonan regularly.

While in Transport, he proved his political skills in navigating the sale of the State’s 25pc equity in Aer Lingus to Willie Walsh’s IAG global group. This was commercially a no-brainer – a mega growth opportunity, offering significant fresh commercial investment instead of State aid.

However, Labour TDs on Dublin’s northside and many of the airline’s trade unions vowed to oppose further privatisation based on ideological, political resistance. But Donohoe deftly delivered Government approval for the sale, yielding double-digit Aer Lingus expansion.

Dramatic further growth prospects have only been curtailed by Shane Ross’s lethargy and ineffectiveness in providing urgent infrastructural development at Dublin Airport.

A politician as a corporate executive with business experience is a rarity in today’s Dáil, populated by former teachers, lawyers and careerist full-time public representatives.

Yet his commercial attributes are deliberately played down by Donohoe.

His media interview style is characterised by a slow motion, laboured, dull and dour delivery. He conceals his sharp intellect – but Donohoe really matters to the national interest in 2018.

We are heading into a maelstrom. We will see a general election within a year with all the expected volatility fending off auction politics; managing enhanced voter expectations post-austerity is a big ask.

It falls to Paschal to dampen down fiscal promiscuity. His prudence is all that stands between us and another “boom-to-bust” cycle.

Budget 2019 will be authored by Donohoe in the context of demands for an extra 20,000 public servants; pay parity for recruits since 2010; income tax and LPT cuts; welfare increases; extra investment for significant additional capacity to meet health and education demographic requirements.

FG has yet to secure a balanced budget after seven attempts. The national debt stubbornly stands at €206bn, not reduced in cash terms.

His Summer Economic Statement this week ignores the extent of the soft centre of the entire Government’s economic narrative. Ireland’s miraculous economic bounce-back is based on extraordinary levels of dubious multinational accounting practices.

Take iPhones. Made under contract in Asia. Sold, consumed in Europe. But their profits and intellectual property asset base are housed in Ireland – to avail of our effective 1pc corporation tax regime.

The ratio of payroll costs to profits amongst hightech foreign multinationals is 20 times greater than that between indigenous businesses here. While we’re getting 200,000 IDA jobs, their main aim is warehousing our CPT regime to maximise returns to shareholders.

This falsely distorts our national output/GDP statistics, creating fake news about the sustainable state of the real Irish economy. Of 37pc of CPT receipts in 2016, more than €3bn derives from 10 FDI multinationals.

It’s only a matter of time before Trump, OECD, Macron and EU commission tackle this Celtic wheeze. Our windfall has created the best-performing economy in the western world for each of the past five years. It’s unsustainable.

The potential for Brexit uncertainty to paralyse capital investment decisions on both sides of the Irish Sea cannot be overstated.

Both transition/ implementation periods seem certain to extend to at least January 2022, well into the next Westminster Parliament.

Future decisions on the location of manufacturing and distribution centres will be put on hold until there’s clarity on the shape of a future customs union between the EU/UK. P

ASCHAL’S innate caution is in reality the only ‘backstop’ to impoverishment. As the ECB’s quantitative easing (economic methadone maintenance to wean us off cheap credit) terminates in the autumn, interest rates will swing upwards – this is already occurring with the US Fed. Five years is the normal time limit to bookend economic cycles. So the clock is rapidly running down.

Ireland’s Exchequer and households remain the fourth most highly indebted in the EU. External shocks, such as economic implosion in Italy or Chancellor Merkel being moved on in Germany, may catapult the euro into new eras of uncertainty.

US/China trade protectionism rows will only worsen before there is any resolution. Stock markets are understandably nervous.

Too many finance ministers in the past have been patsies to their boss’s political ambitions. Varadkar is determined to retain the Taoiseach’s office – expediently oiling all squeaky wheels as they arise each month, regardless of cost.

Budget ’19 amounts to Paschal’s audition to achieve his ultimate ambition. Leo’s most likely FG successor is no longer the invisible man.

Donohoe stands between us and another ‘boom-to-bust’ cycle