Merkel position is a real slap in the face

A lot of the political activity around restoring the euro’s sustainability has fallen into the one-step-forwards two-steps-backwards category.

Many eurozone citizens have been left bewildered and disappointed at almost endless indecision and the lack of cohesion. The high-wire hoopla has been so drawn out, so unsatisfactory, that all across the community people now feel that governments might betray them just as bankers and regulators did. It is increasingly hard to argue with that position. The glacial progress towards the kind of unified approach, the only response proportionate to the crisis, becomes more and more unnerving.

That the prevarication continues as tens of thousands of jobs are lost, services are cut, incomes fall faster than taxes and bills rise, as hardship becomes a draining reality for people who never contemplated the prospect, makes it even more difficult to be patient. The endless slide to God know where makes it difficult to keep faith in a system that simply is not working, a system that is unable to deliver on the social contract that has underpinned the western world since 1945.

Over the last three years summit after summit has been inconclusive and proved unequal to the challenge of stabilising bankrupt, uncooperative and some unreliable countries. Every riot, every street protest in any number of beggared member states, confirms that. Every humiliation of a relatively powerless but supplicant politician from a dependent state, including our own, reaffirms where the real power lies and in whose interests that power will be ultimately exercised.

Early indications were that the Brussels summit of recent days had crossed a rubicon, that things had changed, that real progress had been made. Agreement around eurozone bank regulation was a real and welcome step forward.

This flicker of optimism was reflected in early post-summit remarks from Taoiseach Enda Kenny who welcomed the outcome, saying the supervisory mechanism would clear the way for the ESM to recapitalise banks.

Then, in what cannot be described as anything but a slap in the face, German Chancellor Angela Merkel, offered her interpretation. Speaking in Brussels she said : “There will not be any backdated direct recapitalisation” of eurozone banks.

Whether she spoke as a German politician who will shortly face her electorate or as a senior EU figure is irrelevant. She has made another EU summit worse than deeply frustrating from an Irish perspective. Leaving aside the wriggle room the word “direct” might disguise she has made it plain that she has little or no intention of re-engineering unsustainable debts this state assumed in what now looks like a suicidal gesture of thankless eurozone solidarity. At this point it is important to reiterate, one more time, that a great proportion of this debt relates to German and French banks who took a punt on Anglo Irish and now expect this state to assume responsibility for their appalling investments. That they sustained the madness that has all but ruined this country seems little more than an unfortunate aside.

Ms Merkel’s slap in the face will be felt in Spain and Portugal and in Italy and Greece too. She, and the electorate she seems determined to appease no matter what the cost, have adopted a position that makes European unity as vulnerable as the euro. She is playing with fire and we, by ourselves, seem unable to do anything much about it.