Communicating in a crisis – what the Irish government did wrong (part 1 of 80-180 billion)

November 21st, 2010 | by Andrew Ó Baoill |

When I talk with my students about PR I explain that the first rule of crisis communication is to ‘fess up – get out in front of the rumours and claims, admitting the truth (in order that you can have a say in framing that truth).

This week the Irish government got that wrong. They lied when asked if there were any discussions with the IMF or the EU – or at least finessed their answers to mislead (rather than merely obfuscate or avoid).These developments can be seen as sensitive – because they are. Any information provided might influence short-term economic developments, affecting the availability of funds for Irish businesses, or whether a business will decide to proceed with an investment in the country. However, providing false information also has an impact – and arguably a longer-term negative impact on the reputation of the government and the state.

At a time when statements/leaks were flowing freely from other governments, the EU, and elsewhere – and when the development (while gut-wrenching for those of us watching from afar) was not farfetched, I cannot understand what it was thought might be gained by having the news dragged out like this.

And now, of course, government ministers are claiming that the only two things that can’t happen are that corporation taxes should rise from their current level [1] and that the government cannot fall. An election, or a change in personnel within the government, would signal uncertainty, which would make this process more expensive (as markets treat uncertainty as risk) and damage whatever authority the government still retains in its negotiations.

[1] The issue of corporate tax levels is an important one, and more nuanced in Ireland than elsewhere. As an island nation (with accordingly higher distribution costs), which built much of its growth (before the property bubble) on inbound foreign investment, having a tax rate lower than the rest of Europe has been cited by multiple observers as one of the keys to the country’s economic success. Beyond the palaver about English-speaking, well-educated populations (both true, but of diminishing significance/value), corporate taxes (and, until recently, high levels of European structural investment) were key elements in the country’s economic growth. However, whether this is the one issue of government policy that should be retained, untouched, beyond the reach of the bureaucrats who are about to take over running the country, is less clear.

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