We brought it on ourselves, he said, and we’re not grateful for the help, despite our recklessness threatening the stability of the economies that bailed us out. So if we think we can tap Europe, to repay us part of the money we used to save the banks, well, we can sing for it.
Barroso’s message, at a press conference eight days ago, was straightforward. There were efforts to spin it afterwards, his press spokesman not ruling out the possibility that we might be compensated for the capital invested in saving the banks. But it was nowhere near as convincing as Barroso’s words.
He said: “In fact, it was the Irish banks that created a big problem for Ireland, but also the other countries in the euro area.” A “major destabilisation of the euro area” was due to the collapse in the Irish banking sector and “happened under the responsibility of the national authorities of Ireland and the national supervisory entities”.
He said: “It would be wrong to give the impression that Europe has created a problem for Ireland and now Europe has to help Ireland. In fact, it was the banking sector in Ireland that was one of the biggest problems in the world, in terms of banking stability, let’s be honest about this… The euro was not the problem [for] Ireland, the euro was a victim of the problems created by some practices, irresponsible practices, in the financial sector in Ireland”.
Rather than getting on his high horse about this, Taoiseach Enda Kenny set about being diplomatic. (Some would see it as closer to appeasement.) Instead of publicly setting the facts straight, Kenny said there was no difference of opinion between him and Barroso. “The European Commission have always been very favourable towards Ireland, and president Barroso himself, in my meetings with him over the years, he has always been very favourable to Ireland,” Kenny purred.
A generous interpretation of this is that Kenny has to swallow his (and our) pride in his campaign for retrospective help in meeting the cost of bailing out the banks. He remains hopeful that it will happen, while most observers think it will require a miracle. One man who needs it to happen is Tanaiste Eamon Gilmore. One of the Labour party leader’s more famous gaffes was his premature celebration of a June 2012 council-of-ministers meeting, which he described as a “game-changer” of an agreement to ensure governments would not have to bail out privately owned banks.
So it was good that Gilmore used a Sunday Times interview to have a limited pop back at Barroso. “We have never taken the view that Europe is entirely to blame for Ireland’s problems, nor should anybody else take the view Ireland is to blame for Europe’s problems. But it is also a fact that Europe did not have a robust means of dealing with bank failure. That caused a problem not just in Ireland, but for other European banks, as well.”
The euro was so poorly constructed that it created the imbalances that wrecked peripheral economies, without any means of correction or cure. While the authorities in this country, both regulatory and governmental, were negligent and inept — and many were shouting warnings — the money poured into this country’s banks from German, French, British and other European sources. They made equally bad judgements, but were returned their money in full, courtesy of the Irish taxpayer, who was forced to do so by the European Central Bank and European Commission.
The blanket bank guarantee of September 2008 was a catastrophic decision, but it was after incredible pressure from ECB boss, Jean Claude Trichet, to take whatever action was required to prevent any bank from failing. Between 2008 and the ‘bailout’ of November 2010 by the Troika, the ECB, with the European Commission by its side, got almost every one of its policy decisions in relation to both the euro and Ireland’s banking crisis.
Both the ECB and the Commission have been cowardly in not acknowledging their own failures, and arrogant in blaming us for all our problems, while seeking admiration for enforcing botched solutions. They forced the repayment of bondholders upon our citizens, which was near-criminal. Much of the early post-guarantee activity was to boost liquidity in the banks, but failed to realise that the real issue was solvency. So the Government was correct to tell Barroso and his Finnish mate, economics commissioner, Olli Rehn, to go jump when they said they would like to come to Ireland for a closing ceremony to mark the departure of the troika. It was Olympian hubris on the part of Barroso and Rehn.
Gilmore was more diplomatic. “I’ve met both President Barroso and Commissioner Rehn a number of times and I don’t think, in either case, there would be any sense of personal grievance,” he said. “In any event, both the Taoiseach and I have publicly acknowledged the role the European Commission, and other member states, made.” A spokeswoman for Barroso had no comment on whether or not he was irked.
It may be time for us to reappraise our relationship with Europe, which has been badly dysfunctional since 2008. European officialdom reacted badly to the rejection by the Irish people of the Lisbon Treaty ratification referendum, in mid-2008, and so was not well-disposed to helping us with our economic crisis. Ever since, our governments and officials have been unduly deferential towards the EU. Borrowed money came our way, but on the most onerous of terms.
WE DID not negotiate as well as other countries in similar circumstances, our leaders perhaps too eager to regain their old, preferred status in Europe, the idea being that sticking to the rules of the club gave us better membership status.
Key figures in the International Monetary Fund have given the game away, that Irish governments of recent years were too meek — that we didn’t make demands, nor cause trouble — and that the impositions placed upon us by the ECB and Commission, in return for help, were way too harsh. Our loyalty got some payback, but not enough, and perhaps not of the right kind.
Having repaid all of the bondholders and having met all of the demands made of us, this Government believes we’re still not in a position to show some rebellious spirit, at least not until we get some of this much-wanted bank money. Indeed, there are many good reasons to fear that we’ll need more capital for the banks, which we don’t have, let alone refunds, so we can’t piss the EU off.
But wouldn’t you love to? We hear much about how Europe has been a force for good in this country. But the euro wasn’t and isn’t.
We prefer not to debate that, and we prefer not to acknowledge that in our time of real need, the much-vaunted ideals of European unity were not applied. We were treated as an isolation unit off the coast, to be tolerated and given limited charity. These Europeans should not be welcome at any of our parties.
* The Last Word, with Matt Cooper, is broadcast on 100-102 Today FM, Monday to Friday, 4.30pm to 7pm.