Bank deal strategy - Government must outline debt stance

Taoiseach Enda Kenny was repeatedly asked in the Dáil yesterday what he said to German chancellor Angela Merkel and what she had replied during a recent conversation.

The Taoiseach appeared either unwilling, or unable to respond with specific details.

Maybe it was unrealistic to expect him to talk about her replies. He indicated he is anxious for a resolution calling for the separation of the sovereign debt from banks’ private debt. In other words private losses should not become public debts when investments go wrong.

After winning the recent referendum, the Taoiseach and other members of the Government indicated they were going to go to Europe and ask for a new bank deal. In the circumstances, Fianna Fáil leader Micheál Martin was justified in raising the issue of the approach that the Taoiseach had adopted in his conversation with the German chancellor.

People have a right to expect that the Government has a strategy worked out so that they would be in a position to recommend a way out of the current fiscal and banking difficulties. “The time has come for the German authorities and the chancellor to be told directly that either there will be a radical move on euro level involvement in sovereign bonds or the European Union will be dragged into much deeper and sustained economic decline,” Mr Martin told the Dáil yesterday.

It would be utterly unrealistic for anyone to think that Ireland should be telling — as opposed to recommending — what other Europe leaders should be doing. That is not the way diplomacy is conducted between partner states.

In the midst of the political posturing and incessant hectoring from the opposition benches, the Taoiseach may well have been impeded in his attempts to clarify the situation. He and his colleagues may have firm views on how the banking crisis should be tackled, but in that event they have a public duty to outline their broad strategy on the whole issue.

Unless they provide some broader indications, they are inviting people to think that they have no real strategy and are only floundering in a sea of confusion.