We need our leaders to stop tinkering and take control

WILL Sunday’s summit be the EU leaders’ BlackBerry moment?

We know more about BlackBerry than we used to — even those of us who used to operate them. It seems it has its own infrastructure that whizzes your messages around the globe.

Then along came Apple’s iPhone and, without having a geek’s knowledge, a trial on the shiny new phone and peek at its fun, serious apps and the ease of getting online coupled with its good looks, made many of us decide to change our phone.

It has to be said that the BlackBerry was a great workhorse, it did what it said on the tin, and never threatened to make you laugh or destabilise your serious view of the world. Which, no doubt, is why the City and many others who feared looking frivolous chose it as their communicator of choice.

But one stretch of 48 hours of upheaval last week and the current masters of the universe are preparing to dump one fruit for another.

So much for loyalty.

The question now is, will our political leaders have a similar moment of clarity in Brussels next Sunday and, in what looks like their last chance before the euro finally rolls out of their control, take the action needed?

They have fought all the battles, they have tried to take no or minimal action, they have tried to pretend to save taxpayers while implementing solutions devised by bankers; they have tried all the usual things that work in politics, like devising marvellous compromises, wonderful subterfuges, fabulous fudges. It may work in politics, but not in economics.

They have pretended they are on top of the game, insisted on not reacting just to show who is in charge — and quickly uncovered the truth that whoever was, it wasn’t them.

They played games inside their own democracies, promising to give their frequently foolish and ignorant voters their demands, and then putting together impossible deals to get sufficient support in their parliaments to push through their solution.

The Germans said there must be private sector involvement in Greece but, in the uproar that followed, allowed the bankers to devise it. Now the truth of that rotten deal has been exposed as the cost of doing it the bankers’ way is not just expensive for taxpayers, but will cost Greece even more than calculated three months ago.

Trying to keep German banks out of the equation has exacerbated the situation, too, and now with French banks in the firing line, the issue became how to have the EU taxpayer to cover the gap rather than the French.

Once again we discover that having a single multi-country currency unites us all. The French fear having to look after their own banks will destabilise France — and then the euro game is up for us all.

So we need the leaders to stop tinkering and take control as they failed to do three years ago. Unfortunately, any real action they take at this stage will only stop making the situation worse. But it’s the best we can hope for now and will allow us to start to mop up the mess and think about how to deal with the future.

There is one thing for sure, however: the taxpayer will not be off the hook. UCC economist Seamus Coffey proves this with a few sums showing that the real cost of the €31 billion worth of IOUs, promissory notes on Anglo and Irish Nationwide, will cost us €85bn in total before its paid off in 2031. That’s the cost of the interest payments, plus the interest on the money borrowed to pay the interest. Changing the interest rate won’t make much of a difference.

Flower power didn’t stop wars and it’s doubtful if those protesting on the Wall Streets of the world will change the system. It is difficult to know whether they should become economists or politicians to achieve that.