ECB can’t push around the smaller countries

The culture of secrecy and absence of accountability within the ECB is striking and must change, writes Lucinda Creighton.

THE letters released by the ECB yesterday tell us nothing we did not already know. There have been many leaks since 2010 alluding to the pressure applied by the ECB on the Irish government forcing the government to apply to the IMF for a bailout. The tone and manner of threat was utterly unacceptable, but not surprising given the dysfunctional nature of the relationship that exists between the ECB and eurozone governments. It is a relationship veiled in secrecy and mired by the dominant political interests of certain member states.

In reality, this bailout application was inevitable in any case, because the collapse of Ireland’s banks, the ill-advised bank guarantee of 2008, the implosion of the property sector, and the enormous gap between government income and expenditure by the end of 2010 all meant that the Irish State was effectively bankrupt and would require a bailout. The effect of the ECB threat was to bring forward that inevitable fateful date when the application was made.