Who do you trust, the market or the troika?

There is a conventional wisdom developing among the chattering classes that Ireland must avoid entering a second bailout with the troika.

“Getting back to the markets” is perceived as a good thing, and being flung in to an extended life as Troikaland is apparently bad. I’m not sure anymore.

The cliché about “returning to the markets” means exactly what? Is that the same market that gave Ireland and its banks uninhibited access to borrowings on which we gorged ourselves before throwing upa lot of that money in the form of failed loans since 2008? Are those who helped engineer this form of economic bulimia on Ireland to be now trusted with fresh engagement with our national finances?

Perhaps even more importantly, is the political system in Ireland to be trusted with control over our finances, which is an explicit consequence of getting back to the market? Have politicians learned anything from the debacle of the past four years? I listened carefully last week as various politicians, especially those seeking power, sought immediate financial relief on foot of the breakthrough agreed by EU leaders about bank debt. Having made a major and profound advance, these politicos wanted more largesse in the form of looser budgets to suit their narrow agendas about grabbing power in our delicate country. No thanks. I’d prefer to run the gauntlet of another round of troika financing. Here’s why:

* The troika is comprised of grey suited professional technocrats where the risk of corruption seems low compared to our own recent history;

* The troika is systematically cutting its way through the myriad of excess and imbalance that pervades many parts of state spending in Ireland. Giving that role back to local politicians will at best stall and at worst reverse what are proper decisions aimed at restoring balance to national finances;

* The troika provides a useful cover for the Government of the day and it can be blamed for the necessary adjustments yet to come.

Amid the noise that stands for political debate in Ireland, there is still very limited regard for a fundamental element in the Ireland of the future — the need to balance income with spending. While that balance can be tilted slightly during times of economic duress (i.e, running deficits in recessions) the amplitude of surplus and deficit must be narrowed. The troika is helping us do that.

In a related way, Germany is doing the same with those EU economies who thought the euro was nothing short of a license to print money. Those countries are learning the hard way that a strong eurozone can only evolve if discipline applies across the entire economy. Germany can be expected fight tooth and nail before compromising on any relief for individual states. Its stance is clearly designed to guarantee structural changes occur now that allow the eurozone thrive for decades.

Compromising to satisfy short-term pressures imposed by the same markets some in Ireland want to rush back to would be a huge mistake. This helps to explain why Germany stands tough in front of rants from the financial markets that are transfixed by short-term daily newsflow.

The same hardline mantra should exist at home and the troika is the best mechanism for delivering the type of radical change needed to make our economy strong and equipped for long-term development. Cutting that process short, by returning to the markets that brought us the scandal of rates manipulation last week, would be a shortsighted move. Bring on Troikaland 2.