Bailout row - Clarity not confusion is needed

DISCORD among Government ministers on the thorny question of whether the country will need another financial bailout package next year to survive its fiscal crisis is particularly worrying at a time when Cabinet members ought to be singing loudly and convincingly from the same hymn sheet.

Inevitably, any hint of dissonance within the Coalition on such a sensitive matter is bound to stir the rumour factory and lead to misinterpretation and confusion in notoriously volatile financial markets. Inevitably, it could also increase the burden already bearing down on the weary shoulders of hard-pressed taxpayers.

In a perturbing instance of discord in Government circles, both Taoiseach Enda Kenny and Finance Minister Michael Noonan have been forced to issue swift denials of speculation by Transport Minister Leo Varadkar that Ireland may have to return to the IMF and the European institutions in 2012 for a further bailout.

Against a backdrop of strict enforcement of political accord under the whip system, it is often taken as a healthy sign when politicians break rank and voice their own opinions. In this respect, Mr Varadkar has displayed a tendency to call a spade a spade. Indeed, his dire warning may turn out to be more accurate than either the Taoiseach or Finance Minister are willing to concede at this stage. That goes to the nub of the issue because in the high stakes game of poker being played out across Europe, timing and subtlety are everything. In his political career, however, timing and subtlety have not been much associated with Mr Varadkar.

At present, the focus is on Greece and should not be deflected to Ireland. The critical choice facing Brussels and the IMF is whether to keep lending the bankrupt Greek government money or to accept its inevitable slide towards default, with far-reaching repercussions throughout the eurozone.

The big difference between Ireland and Greece lies in the strength of their respective governments. Ireland has a strong administration whereas Greece does not. No government minister should utter a statement that damages Ireland’s image. That explains the flap in Government circles and why Mr Noonan dismissed any question of a bailout being brought in next year.

Ultimately, the IMF and Europe may yet be forced to face reality and take on board the prospect of debt forgiveness for countries like Greece, Portugal, Ireland and Spain, where the economies are weighed down by debts of such enormity they may never be repaid.

Government ministers should guard against statements which have the effect of turning the predatory eyes of the financial markets in Ireland’s direction. The country has enough problems as it is.

Far more telling and of deeper import is the damage that a loose cannon can inflict on the Coalition’s image in the eyes and minds of a deeply worried public who look to Government for clarity and cogency — not confusion.


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