John Bruton is a former Irish Prime Minister (Taoiseach), who helped transform the Irish economy into the "Celtic Tiger," one of the fastest growing economies in the world. John Bruton was also deeply involved in the Northern Irish Peace Process leading to the 1998 Good Friday Agreement, under whose terms a conflict of allegiances dating back to the seventeenth century was resolved.
While Prime Minister, Ambassador Bruton presided over a successful Irish EU Presidency in 1996 and helped finalize the Stability and Growth Pact, which governs the management of the single European currency, the Euro. Mr. Bruton addressed a joint session of the US Congress on September 11, 1996, as only the 30th head of state or government of an EU country to do so since 1945. He was probably the only President in office of the European Council to have addressed a joint session of Congress. Further, he represented the EU at Summit meetings with the President of the United States and with the Prime Ministers of Canada, Japan, China and Korea.
Before being appointed Ambassador to the United States, John Bruton served as a leading member of the Convention that drafted the proposed European Constitution, which was signed in Rome on October 29, 2004. He strongly supported proposals to give the general public a more direct say in the choice of EU leadership by allowing the public of the 27 EU Member States directly to elect the President of the European Commission.
From 1999 until his appointment as Ambassador, he was one of ten Vice Presidents of the European People's Party, which brings together the leaderships of 74 European political parties, many of whom are in Government in their countries.
Since 2001 he has spoken on world, the European and Irish economic developments to influential business and political audiences in New Zealand, South Africa, Chile, Canada, Argentina, Mexico, Peru, Colombia, Costa Rica, Ukraine, Turkey, the United Arab Emirates and numerous EU Member States.
Since taking up his position in Washington in 2004, John Bruton has met with the President and former Presidents of the United States and visited with governors, mayors, business leaders and students in over 20 US states to explain that the expanding European Union is good for the US economy and good for American jobs. In Washington, DC, Ambassador Bruton has had one-to-one meetings with over 250 Members of Congress to explain major EU developments and discuss the importance of the EU-US relationship in matters of trade, counterterrorism, public health, energy, the environment and the promotion of peace, democracy and human rights around the world.
John Bruton was first elected to the Irish Parliament ("Dáil Éireann") in 1969 at the age of 22 as a member of the Fine Gael Party, becoming Party Leader in 1990 and leading it into government in 1994. He previously served as Ireland’s Minister for Finance (1981-1982 and 1986-1987); Minister for Industry & Energy (1982-1983); Minister for Trade, Commerce & Tourism (1983-1986); and was Parliamentary Secretary (Junior Minister) from 1973-1977. He has also been opposition spokesman on Agriculture and on Education.
As Minister for Finance, he began the task of overcoming a major budget deficit crisis for Ireland in 1981 and made proposals to overhaul budgetary procedures to allow long-term planning and a realistic appraisal of the choices facing legislators.
As Minister for Industry he prepared and had enacted into law the comprehensive industrial development legislation, which underpins Irish growth to this day, and undertook a major overhaul of Irish company law. He resigned his seat effective November 1, 2004 to take up his appointment as EU Commission Head of Delegation in the United States.
John Bruton was born in 1947 and graduated from University College Dublin with a Bachelor of Arts degree in economics and politics in 1968 before studying to become a barrister. He was called to the Bar of Ireland in 1972. He holds Honorary Degrees from Memorial University of Newfoundland and the National University of Ireland. He is married to Finola Bruton and has 4 adult children.
Question: Do you place the majority of the blame for the global economic crash on the U.S.?
John Bruton: In the sense that securitization, which was a very ingenious way of spreading the risk was initiated in the United States. And spread from the United States elsewhere. Without people realizing that, although it minimized risks in the short run, it made what would otherwise have been localized risks, risks to the entire system as it spread more widely in the sense that nobody recognized that risk, the U.S. has a bigger responsibility because it was in the U.S. that the method originated. On the other hand, it has to be said that it wasn’t just American banks that bought these sub prime mortgages that bought these securitized products. The European banks with their eyes open bought these things and their supervisors of the Central Banks of Europe knew that they were doing it. So, if there was a supervisory failure, and clearly there was, that’s not just an American failure, it’s a failure of all of those countries and regulators that were regulating banks that were engaging in this risky activity.
Question: Do we need unified international oversight of global banking?
John Bruton: I think we need to have comparable standards or mutually recognizable standards for supervising banks. Because I think it is reasonable that banks should be able to operate in other countries. Otherwise you are going to have national monopoly banks and that’s going to be good only for the bankers and the consumer is going to lose. The margins between the lending rate and the borrowing rate will get very high and the benefit in the middle will be taken by bank shareholders. That’s not good. To control that, you need competition. And you need competition from other countries. But the problem is, that if banks get into trouble, the people who are asked to help them out and save them are the taxpayers of the one country in which they are located. Not all of the countries in which they are operating, but the one country in which they are operating. Ireland has had to rescue, for example, its banks. A lot of their business was overseas.
So, if you have global banking, but national financial responsibility on national taxpayers you’ve got to find some way of mediating between the two of them. And one way of doing that would be to have mutually recognized supervisory standards where an American regulator would know that if a French bank was operating here in the United States, that the standards of regulation and the standards of making sure that that bank wasn’t making foolish decisions were equivalent to the ones that the American regulator would be applying to an American bank and competing on the American high street. So, getting more mutual recognition and more standardization of bank supervisory standards and perhaps placing particular limits on particular types of activities like securitization makes sense.
Question: Is the G20 an effective improvement over the G8?
John Bruton: I think the G20 is a big improvement. And indeed the creation of the G20 is one of the few good things that have come out of this appalling economic crisis that we have. We have had for a long time a lot of organizations dealing with the global economy. We have the World Trade Organization, the International Labor Organization, the World Bank, the IMF, we have a Financial Stability Forum, and I could go on and on and on. But they are all sort of separate silos operating in separate silos. And up to now, there has been no over arching board of directors, if you like, that is politically accountable to tell them, this is your agenda and this is the direction in which you should go and we’ll be checking up on you every so often. And if you haven’t acted on what we’ve said, we’ll be asking some questions the next time we meet. We now have that in the G20 where we have the politically accountable leaders of countries representing, I think over 90 percent of the entire income generation, in the entire world every year. And that’s much better than anything we had before. There is someone now in charge of the world economy, which there wasn’t before. There were a lot of independent actions, but there wasn’t coordination. So, I think that’s a huge step forward.
The G8 was a much more limited thing because it didn’t have representation of some of the major emerging economies, who are representatives in the G20. Obviously, the G20 may have to change. One of the things we’ve learned recently is we have set up organizations with a rigid format, but things change. There are countries who could now claim that they should be on the UN Security Council because they are bigger and more important than some of the countries that are currently on the UN Security Council. But we can’t change it because it’s all laid down in the UN treaties. But the G20 hopefully will be a more flexible instrument and we will be able to make the changes as we go along to ensure that it continues to be comprehensive and representative of the entire world.
Recorded on October 1, 2009