Ireland must sell its case to Europe to win concessions on bailout

IRELAND is in danger of losing the propaganda war when it comes to the bailout loan and the conditions surrounding it. Just ask the taxi drivers in Berlin.

They all begin by saying that Ireland is different to Greece and Portugal — but quickly add that they don’t expect to ever see their money again.

That explains why they see the loans as a transfer of their wealth to their fellow eurozone members.

When the three fail to repay, the German taxpayer will have to cough up the money, they believe.

And when you ask why they see Ireland as being different, they say, “well, it’s the banks, isn’t it” — and not profligate spending, reckless governments and citizens who never work or pay taxes.

One even added: “Ireland always had a tough time — first Cromwell and then the famine” — showing a heartening and rare knowledge of Irish history.

Even the German professor Markus Kerber, who is challenging the bailouts in the German Constitutional court, insists that “Ireland is different” and does not object to the loan.

But despite being placed in a slightly less negative role, the country is vulnerable to being a pawn in domestic politics.

German Chancellor Angela Merkel adopts a particularly moralistic approach to bailout out countries, referring to their “sins”.

While she is not seeking to block the cut in interest rate on the loan, she will not be a cheerleader either. During the March summit in Brussels she was happy enough to row in behind the French President Nicolas Sarkozy when he raised the issue demanding an increase in corporation tax.

But for some reason the government is not categorising this demand for an increase in company tax as an attack on the EU treaties that clearly state that national tax is a sovereign issue for the country concerned. That, after all, is what France would say if countries began to demand that they increased their tax.

Mr Sarkozy knows that a change in Ireland’s corporation tax would not enhance any EU, values or even benefit the French whose real tax take from companies is much lower than Ireland’s at just over 8% because of loopholes.

But facing elections next April the habitually insecure Mr Sarkozy will be jumping on every sound bite that might give him an advantage — just another example of a politician willing to sacrifice others to advance their own personal career.

Ireland needs to build solidarity, not just among fellow EU member states, but among the public. But it is not getting the story out. It may not be possible to get the French electorate on side, but it should be possible to inform journalists and commentators sufficiently that they become less willing to take pot shots at the country — and make it less easy for their politicians to do so.

While getting the interest rate cut is just a matter of time, Ireland will need further changes to the loans, including a longer maturity and further lowering of the interest rate if as expected the ECB continues to raise the base rate.

The country can’t hide the sins of its close to non-existent regulation or regulators, but it needs to be balanced by the fact that this was a near universal occurrence and other countries were complicit. There have been briefings with the diplomatic fraternity but this does not get the message out to the general population.

EU Minister Lucinda Creighton’s visit to Paris and Berlin and her interviews with international news agencies during the week was a step in the right direction. But much more is needed.