Lenihan’s call to patriotism was the last refuge of scoundrels and liars
Above all, Brian Cowen should be thoroughly ashamed. He was the Minister for Finance while the Celtic Tiger was being mounted and stuffed.
For years we have been fed on a diet of the glorious struggle for independence and Fianna Fáil has been talking about celebrating the forthcoming centenary of the Easter Rising.
No doubt many people will remember over the years all the European referenda in which we were assured there was no infringement of our sovereignty. One government after another lacked the guts to come clean with the people.
Before applying for membership of the United Nations Organisation in 1946, Éamon de Valera did level with the Dáil. He candidly said membership would involve a certain loss of independence because it carried with it responsibilities under the UN charter which could lead to involvement in military conflicts to ensure international obligations were enforced.
“If there is ever to be a rule of law,” he said, “nations must make up their minds that they will take part in such enforcement.” Had the League of Nations decided on military sanctions against Italy at the time of the Ethiopian crisis in the mid-1930s, he said he felt Ireland would have been obliged to take part, and this should be the case with the UN.
Whether we were joining the UN, the EU or the European Monetary Union (EMU), all had obligations that effectively impinged on our national sovereignty, but the extent of the encroachment should have been minimal if our government had acted responsibly.
For the past week the Government has been telling us there is no need for a banking bailout. They were lying shamelessly. They will probably try to call it something else, such as a fiscal contingency fund, and on past performance they will probably expect people gullibly to accept it is not a bailout.
There seems to be no limit to their willingness to insult the intelligence of people by treating them as if they are so stupid as to swallow such guff. That may not say much for the Government, but it says even less for the people who tolerate such contemptible treatment.
Members of the Government have been pretending to tackle the financial crisis in an effective and determined way over the past two years. The last budget was never going to be other than a stopgap measure because it was not designed to tackle our problems. They were only postponing the hard decisions and now they are going to hand those decisions over to outsiders.
We are in a much worse position than we were last year. The persistent bungling has seriously damaged public and international confidence.
In the 1930s banks went under because depositors panicked and demanded the withdrawal of their money immediately. Even solvent banks with good performing loans could not meet all the demands once there was a run on them. Many solvent banks went under in the US before the government guaranteed all deposits up to $20,000.
That reassured most people who would have likely panicked, and hence the guarantee helped to restore confidence. “What we have to fear is fear itself,” President Franklin Roosevelt famously proclaimed in the US during the height of the Great Depression.
Faced with the flight of capital from Irish banks a couple of years ago, the Government introduced the blanket guarantee which provided more than the statutory guarantee of up to €100,000 in bank deposits. All deposits were covered to an unlimited extent until September of this year.
As the blanket guarantee was about to run out, there were further withdrawals of deposits, so the unlimited guarantee was renewed until next year. “All of those decisions have been necessary,” the Taoiseach explained on Thursday.
“In present market conditions they are clearly not sufficient,” he added. “And what we have to do now is to sit down with our partners and see in what way we can resolve this problem so that there is stability in the currency, so that we can normalise market conditions as quickly as possible.”
If the IMF and the EU come in with a rescue plan, they are obviously going to set conditions and dictate budgetary reform.
It is an indictment of the Government that so many people are prepared to welcome this kind of takeover. People have clearly concluded that the current Government is incapable of taking the necessary hard decisions.
“There is no question of loss of sovereignty for Ireland,” Brian Cowen declared on Thursday. He has got so many things wrong already that his word is unlikely to provide much reassurance for anyone.
If one analysed his remarks, he was basically suggesting there would be no loss of sovereignty because we already lost that sovereignty when we joined the EMU. “We share our sovereignty with other partners as part of a strong currency area,” he stressed. In fairness it did help with price stability and ended the ravages of inflation. The Taoiseach noted that inflation has been down to less than 2% annually.
Bad as things may be here, we are not as bad as Greece. Our per capita GDP is 21% higher than Greece, which puts us in the top one-third of European countries. Our public debt is 65% of GDP, which is almost half that of Greece and level or even lower than France, Germany and Britain.
BUT in guaranteeing all bank deposits, the country could be obligated to cover losses amounting to 175% of GDP, which would be an unsustainable burden. If the banks go down now, the country goes with them economically.
Portugal and Spain would be likely to follow, and if the international figures are right and our current ratio of public debt to GDP is as good or better than France, Germany and Britain, then the whole of the EU will be trouble. That is why the EU is putting so much pressure on Ireland to accept a bailout.
“We are working with partners with whom we share sovereignty to come up with the solution to the currency area generally and we want to do that in a way that brings certainty and confidence,” the Taoiseach insisted. “But it will be the sovereign decision of the Irish Government on behalf of the Irish people that will decide what shape any package would be, were we to decide that is in our best interest.”
The reality is that the Government is looking for the best terms it can get because it has no real choice. It has undermined the economy. It is absurd to think it can negotiate a four-year deal on behalf of the country because it does not have a proper mandate and it no longer commands any confidence or respect either at home or abroad.
Two years ago Brian Lenihan made a call to patriotism. It was the last refuge of those scoundrels who have betrayed the country.
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