Kenny’s popularity boost backfires
The Taoiseach made the announcement of the Dec 15 date for the country to escape the financial straitjacket imposed by the troika as the centrepiece of his Fine Gael ard fheis speech earlier this month, but the move may have had a negative effect on the Coalition’s attempts to negotiate a smooth withdrawal from the IMF/EU/ECB controls.
Senior European sources say the address was interpreted in Brussels as meaning Ireland was seeking a “clean break” exit from the bailout terms and was not looking for a safety-net line of credit in case the money markets again downgrade Ireland as a bad bet when it regains economic sovereignty.
The move has thrown Irish policy into confusion among Euro paymasters.
That speech seemed to backfire in Brussels as it sounded like Ireland was gung-ho to go it alone after Dec 15.
The Taoiseach refused to be drawn on the issue of whether Ireland would seek the credit line or not after the weekend’s EU heads of government summit in which he said the issue was discussed at the margins.
Signing up to a safety net financial option would effectively mean the country entering a second bailout in December rather than reclaiming full economic sovereignty. This is because, even if the Government did not need to utilise the emergency funding, the fact it was made available would force the Coalition into agreeing another round of economic controls with the troika. The issue is also uncertain as it would take just one of the member states to veto the move for the credit line option to be refused to Dublin.
With the EU desperate to use Ireland’s exit from the bailout as a “good news” story to emphasis that the ongoing euro crisis is easing, some senior Brussels officials were also surprised Mr Kenny announced the official ending of troika control at a party political event, and not in a sequenced announcement with the EU, ECB, and IMF.
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