Paul Colgan: Ireland’s love affair with Europe faces a fresh test

You’d think that given the bruising troika years and the fact that we still toil in order to service the debt of private bankers that our attitudes towards the European project would have cooled considerably.

Yet, according to the Eurobarometer findings of just last summer, albeit findings which were made before the Brexit referendum, we are the most enthusiastic of all EU citizens.

Not only that, but next to Luxembourg, we are the keenest on the common currency.

Despite being told that the euro helped inflate the bubble economy here and then ensured the austerity that followed, we still view it with affection.

Four out of five Irish people think warm, fuzzy thoughts about the currency. One in two Europeans do not.

As Europe seems to be collapsing in upon itself, our continental cousins are deeply pessimistic about the future.

According to the same survey, among the most perturbed are the Germans, French and Italians.

When asked to cite their main concerns, they plump for immigration and terrorism.

We instead worry about health, social security and unemployment.

The diffrences are interesting.

Would our attitudes be any different if the euro crisis had persisted?

The troika was unyielding and the ECB was a cold house.

And then everything magically changed when the interest rate for Italy —one of the most indebted big states in the world — hit 7%.

The ECB then came to the rescue, unveiling its so-called Outright Monetary Transactions and a new ECB president stepped up to the plate.

The euro plunged against sterling and the dollar — a good thing that led to firms here winning exports and creating jobs.

The ECB followed through with Quantitative Easing, which helped to refloat the Irish financial system.

All manner of useful things unfolded.

For example, super-low borrowing costs enabled the refinancing of expensive IMF loans.

The euro was finally doing what Ireland needed it to.

And then the Brexit vote hit.

Now, we face into 2017 with a fresh crisis looming.

Last week, the European Investment Bank opened offices in Ireland and a number of government ministers and European officials gathered in the Shelbourne Hotel.

The wine flowed, lunch looked delicious and everyone appeared happy.

But a spectre was haunting the feast.

The Italians are mad as hell and are not going to take it anymore, while many French voters are looking towards the National Front.

The euro is in jeopardy once again.

The president of Europe’s bank, however, was having none of it.

“The euro has never been stronger,” he declared.

Werner Hoyer said he had been reading of the euro’s obituary for the last 15 years.

However, it all feels a bit different from 2011.

The ECB has little left in its toolkit to reflate Europe.

Its president Mario Draghi continues to call for “‘structural reforms” in his home country.

President-elect Donald Trump rails against trade deals; there is an ugly and messy Brexit process; while widespread disaffection is the heart of Europe.

The problems that led to the turmoil in 2011 are still with us.

Greece is insolvent.

Many young Italians will never find a job and Italy’s banks teeter on the brink.

Back home, Ireland still has a massive debt pile.

Our attitude to the euro and the European project is about to be put to the test again.

Paul Colgan is economics editor at the IFTA-winning Ireland Live News on UTV Ireland. He recently won the ‘Business Feature of the Year’ award at the Smurfit Business Journalist Awards.


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