Kenny needs to capitalise on Ireland’s ‘model behaviour’

TAOISEACH Enda Kenny this week has an opportunity to turn his famed ability to connect with ordinary citizens to connect with the country most likely to decide our future — Germany.

Kenny needs to capitalise on Ireland’s  ‘model behaviour’

On Wednesday, he has a working lunch with German Chancellor Angela Merkel and for two hours they will explore the options for moving the eurozone out of crisis.

That afternoon he will have another prestigious platform when he speaks at the Konrad Adenauer Stiftung (KAS), a leading think-tank that contributes to public and political thinking in Germany.

His introduction on the KAS website is as the man who leads the country that is basically proving that German prescriptions for dealing with the crisis work.

Ireland is also portrayed, as it was in the past, as the country that proved the theory that a transfer of funds could bring all EU member states to the same level of prosperity.

These credentials certainly mean you merit being listened to in the German, and increasingly the European, capital — Berlin. However, it is time to move on and Taoiseach Kenny will need all his acumen and the skill of his advisers to point to a road ahead.

He will no doubt be anxious to avail of whatever loopholes have been created in Germany’s thinking over Greek private sector involvement to suggest that Ireland — being the model pupil — should get a break too in the demand that it repays all creditors, irrespective of whether they expect it or not and irrespective of whether this encourages the famed concept of moral hazard among them.

But even if Merkel agreed that Ireland can haircut as much as it likes, it does not move Ireland or the euro one step away from the precipice that it stands on.

Having spent the last three years exploring every economic theory, trying out several of them but failing to find a resolution, there are few good options left.

All the eurozone economies are now so interlinked and interdependent that anything that affects one, affects all. We all own one another’s government debt and one another’s banking debt. Germany’s central bank is owed more than any other country by the banks of other member states at €340bn. So, as one pundit remarked, Germany may find that the rope she is pulling is around her own neck.

Jose Manuel Barroso, president of the European Commission, who spoke at the KAS last week, pointed out that all member states would lose 50% of their GDP if the euro broke up, and by offloading some of its members, Germany would stand to lose a million jobs and big amounts of its wealth, current and future.

But even such dire warnings do not always stop people from pursuing a dangerous line. Economics is not ring-fenced from politics. And while economists might manage to change democratically-elected prime ministers for technocratic economists in Greece and Italy, the opposite can occur.

After all, much of what we are witnessing now is German politicians’ response to prejudice, simplifications and rabble rousing among its citizens, together with a short sighted view of what is in its interests.

The German courts have effectively limited EU action to what the German parliament can agree to. But the transfer and build up of debt continues despite this, shoring up problems for the future and more likely than ever to infuriate an indignant public.

So while Ireland’s willingness to fall on its sword should win plaudits in Berlin, hopefully it will win Kenny credibility for the political message of, as our new president said, “ní neart go cur le chéile” — or to put it another way, if we don’t stick together, we will hang separately, within the EU and globally.

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