Let’s hope we can get to a better place — and that it’s in Europe

IT’S time, finally, for some honesty.

We have to be given a better reason for painful budget cuts than “This, unfortunately, is the fallout from the bank guarantee”.

That was the best that Taoiseach Enda Kenny could do when he was questioned with passion by Micheál Martin on the burning issue of educational places for school-leavers with special needs during Leaders’ Questions in the Dáil last week.

Let’s get one thing straight. The bank guarantee extended on the night of Sept 30, 2008, elapsed two years later, in 2010. A slightly narrower version of the guarantee was brought into being by the last government, the Eligible Liabilities Guarantee. This has been extended twice by Enda Kenny and his coalition.

It’s not just that he and his party supported the bank guarantee in 2008. He has a bank guarantee of his very own. This should have been to the forefront of his mind when he was speaking on Wednesday of last week, because his government announced its intention to extend the guarantee yet again just two days later, on Friday.

It’s no excuse to cut places for school-leavers with special needs. There is just no excuse for cruelty. But some cuts somewhere are inevitable, mostly because we have a deficit this year of €13bn and next year it could take 20% of tax raised to service our debt.

Quite obviously, there is a reason why we are not defaulting on our debt. The Government thinks that the possible consequences of default and bank collapse would be greater than the impact of budget cuts.

They are right. As former Taoiseach John Bruton pointed out in a recent blog our GNP is back to 2004 levels and our “household net worth”, including borrowings, is back to the levels of 2003.

As he said on in an interview with Pat Kenny this week, we weren’t starving back then. Retraction will always be painful, but our consumer spending for the first quarter of this year was equal to that of 2006. We are one of only two economies in the EU which is growing, the second being Germany.

Obviously the bursting of the catastrophic property and associated banking bubbles has been a calamity for the many people downstream of it. But Ireland is still the seventh best in the world in which to live under the UN Development Index. The advantage of cuts over collapse is that you have some control. You can actually decide to cut the bejaysus out of my child benefit to make sure that special needs training place stays open.

During the nightmare of late 2010, I thought this every time I cycled up to my autistic son’s special school. With its classes of five, its social care programme, its climbing wall, its own people carrier, it is my troika deal.

Like all dependants of the social services, I need control, not freefall. The only people who might gain from freefall are alpha males with an interest in firearms and the seriously indebted who might escape paying up. I think there are many in both categories among the chorus of protest against “austerity”. There is a real risk they destabilise this country because the current government lacks the courage to own its policies let alone explain them.

Some of the reason must lie in their performance before the last election. Labour’s Joan Burton led the charge against the previous government’s support for the banking sector. She complained in the Dáil that the Government had “no effective exit strategy” from the guarantee and that its plan was to “rollover the guarantee and extend a very large portion of the guarantee for a period of up to five years”.

This is precisely the guarantee that her own government has now extended twice. It was probably these expressed convictions which lost her the job of Minister for Finance. But prominent members of the Government have continued to peddle this populist line against guaranteeing the banks, even while doing it themselves.

This worked really well for a while. Michael Noonan described the bank guarantee to which his own party signed up as “the blackest day in Ireland since the Civil War broke out”. Every time Ruairi Quinn got up to speak he began by saying, “The country is in receivership”.

It’s not our fault, they were saying. But we’re doing our best to clear up the mess, just for you. But it wasn’t going to work for long. And it certainly wasn’t the kind of inspiring communications strategy which would get us through long years of budget cuts and bank guarantees and payouts to bondholders. Breaking point has been reached. The Government must own their policies. They must explain clearly what they are doing and why. Yes, they should say, we’ve chosen to maintain stability in the banking system and pay all senior bondholders, although a law passed in January 2011 means we can now differentiate senior bondholders from despositors.

We think the risks of doing otherwise are too great. Not the risks to us, the risks to you. We are a very small cog in a very big machine which has systemic problems. We think that the best policy is to commit to pay our debts, while working night and day to persuade our European partners that the machine needs to be fixed by sharing the debt burden.

It’s true that our commitment to shoulder our own banking crisis saved Europe from a huge systemic risk. It’s true that that’s a card worth playing. But what’s astonishing is that the point is never made — check out Pat Kenny in his interview with John Bruton on Monday — that a systemic risk to Europe was a risk to us because we are part of Europe. Of all the Government’s communications failures, surely this is the greatest. They’ve never even tried to explain that in this globalised world we only thrive by interacting with others. That all the medicine we are taking, the budget cuts and the banking bailouts, are towards that end.

They’ve never even tried to sell the dream of a prosperous Ireland as part of a strong and far more unified EU. In his recent blog, John Bruton explains that this has happened in many countries because they are founded on “nationalist myths” rather than dreams of international co-operation.

But the alternative is a Europe of squabbling nation-states and with far less prospect of peace of prosperity. And no chance of dealing with the major challenges we face, which are climate change and global inequality.

As the impact of Budget 2013 sinks in, we don’t need excuses and evasions and attempts to pass the buck. We need to be inspired with hope that we can get to a better place and that it’s in Europe.