EU leaders summit - Kenny must fight for all he can get

EUROPE is at a perilous crossroads.

The brave adventure involving 17 states in a common currency zone has reached a defining moment, with several countries, including Ireland, at grave risk of drowning in a sea of debt.

A break-up of the eurozone is unthinkable but such a catastrophic outcome cannot be discounted. That’s the frightening backdrop to the most important summit in the history of modern Europe taking place in Brussels.

The do-or-die nature of the event is heightened by the deep divisions between small European states like Ireland and the power-hungry axis of France and Germany. If Ireland is perceived as a lightweight in the European family, it underlines the enormity of the challenge facing Taoiseach Enda Kenny. Indeed, with European democracy in the balance, his presence at the negotiating table takes on added significance.

It is time Mr Kenny put an end to Ireland’s image as the ‘good boy’ of the eurozone class. It is demeaning for the Government to accept pats on the head as if they were some kind of reward for the compliance of the Irish people in paying without demur enormous debts not incurred by them and for which they are not responsible. There is general agreement on this but it counts for nought in face of the Government’s insistence on reimbursing investors who gambled on Irish bonds.

The stark reality is that as promissory notes for the former Anglo Irish Bank are drawn down, the long-suffering taxpayer will be compelled to fork out a further €30 billion or so. As this grinding saga of payments continues, some €3.5bn will be paid out early next year and the outlook is that these payments will go on indefinitely.

Unless agreement is reached in Brussels a doomsday scenario is on the cards for Europe. Fearing such an eventuality, major global firms including CRH and Diageo have drawn up contingency plans. Reportedly, Ireland’s Central Bank is assessing the availability of facilities to reprint the punt if the euro implodes.

This scenario underlines how important it is for the Taoiseach to fight tooth and nail for everything he can extract to Ireland’s favour from this vital summit. The time has come for Mr Kenny to bang the table and not be cowed by the Merkozy duo (German Chancellor Angela Merkel and French President Nicolas Sarkozy) who have agendas of their own.

European Commission chief Jose Manuel Barroso yesterday urged EU leaders to “do everything” to save the euro. The world is watching and waiting in the hope of something more positive and lasting than earlier summits achieved. But with Germany and France pressing for new EU treaties with stricter fiscal rules, and an alliance of smaller nations backing proposals for a simple amendment to the Lisbon Treaty, the outcome is unpredictable. If Irish voters were to face a fresh European referendum they could reject it. Adding to their woes, AIB has refused to pass on to hard-pressed mortgage customers the European Central Bank’s interest rate cut and more bank refusals are anticipated, but other banks are passing on the reduction.

Whatever comes out of Brussels, the Taoiseach must secure something more tangible than a patronising pat on the head in return for Ireland’s positive role in helping to avert fiscal collapse by honouring harsh bailout terms which are crippling the economy and squeezing the life out of the Irish people.