Economies in crisis - Hard choices but dreadful alternatives

IF yesterday’s very regrettable collapse of talks between the Health Service Executive and IMPACT is an indication precursor of how public sector workers might vote on the Croke Park agreement then we have taken a considerable step along the road to joining Greece in the financial meltdown club.

Yesterday’s decision by IMPACT is far more than a scene from a domestic spat. It, and the shambles over politicians’ ministerial pensions, will negatively influence international markets’ opinion about our ability – and our determination – to confront our runaway biggest-in-Europe deficit.

Markets have taken a very negative position on how Greece’s insolvency will affect the eurozone. Early yesterday Irish shares were in tailspin as Dublin echoed global worries about the euro’s stability. American and Asian markets dropped sharply overnight, followed by European bourses yesterday morning. Investors were spooked by the downgrading of Greek and Portuguese debt sparking fears that a debt crisis may spread across Europe’s weaker economies, Ireland’s included.

As prudent German taxpayers and pensioners begin to resent having to bail out their feckless EU co-citizens it would be foolish to rely on European solidarity to do much more than offer the most basic support. Even this would come with terms far more draconian than anything even imagined much less discussed at the HSE/IMPACT talks.

It is foolish too to imagine that as the euro faces its first great challenge since its creation 12 years ago, that Ireland’s difficulties will have a significant impact on anyone’s sympathy register. The perception is that we have been flagrant, and we have, so we must face the consequences. Unless we are prepared to accept the gravity of our situation and act accordingly we cannot expect much more EU support.

Elsewhere on this page Ivan Yates tells us that “there is real cause for alarm” about our situation and suggests that because the cost of credit is escalating parallel to our need for credit we are moving towards financial calamity faster than anyone in the eurozone.

This crisis is gaining momentum and may sweep sectional interests aside as national independence and economic survival become the priorities.

That is why negotiations like those which failed yesterday and the Croke Park vote are so very important. They have assumed an importance well beyond their immediate orbit. It is not that there is any shortage of sympathy for anyone who faces changed or reduced circumstances. There is just a crushing, unavoidable inability to sustain the conditions we secured and enjoyed during our great delusion.

In recent days the streets of Athens were blocked by protesting public transport workers. The reality is that no matter how much sympathy you have for them their employer – the Greek Government – is broke and all the marching in the world won’t change that.

Hopefully we will not reach that point but it is far from certain that we will not. Though there are examples of inequity and unfairness all around us we must recognise that we will not get out of this mess without considerable forbearance, sacrifice and inspiring leadership. Before any of us turn our back on the proposals that might begin the long journey back towards economic stability we must consider the alternatives.

They are not even vaguely attractive.