Thursday 27 July 2017

250 days in, Kenny has no plan for Euro crisis

'Spin-obsessed' Taoiseach yet to meet a single Eurozone leader

In eight months since his election as Taoiseach, Enda Kenny has not held a single substantive meeting with, nor, apparently, has he placed a single telephone call to, a leader in the 17-country eurozone
Jody Corcoran

Jody Corcoran

The Government, which is 250 days in office today, has articulated no discernible policy on the catastrophic nature of sovereign debt crisis in Europe other than to "wait and see" and then seek to "claim credit" if a resolution is found.

In eight months since his election as Taoiseach, Enda Kenny has not held a single substantive meeting with, nor, apparently, has he placed a single telephone call to, a leader in the 17-country eurozone.

Yesterday, Fianna Fail leader Micheal Martin told the Sunday Independent that Mr Kenny had "failed to recognise the urgency of the situation" in Europe.

Respected economist Colm McCarthy has also been strongly critical of the approach of the Government to the crisis in Europe, which is on the verge of spiralling out of control.

In the Sunday Independent today, Mr McCarthy writes: "The real issue is whether Europe can create a proper central bank. . . the reluctance of Irish politicians to embrace the prospect of a referendum on treaty change is not a policy. . . it makes no sense to reject treaty changes sight unseen."

And independent TD Stephen Donnelly also writes today: "We must bring solutions to the table in Europe and not just take home whatever's on offer."

In the absence of a coherent policy on the changed nature of the European crisis, the Government stands accused this weekend of engaging instead in "gesture politics" on the domestic front.

This is occurring at a time when political chaos reigns in Greece and Italy, and a recession throughout Europe is predicted, something which has created panic on the world markets.

There is significant unease among the ranks of Fine Gael and Labour TDs that a series of recent cabinet decisions has left the Coalition open to a charge of being more concerned with "spin" than "substance".

Yesterday, Mr Martin said: "Call it spin, call it gesture politics, call it the man- agement of news if you like, but, on the real issue -- Europe -- there is this sense of drift, of a lack of substance at a time when substance is required."

The outbreak of disquiet among Fine Gael and Labour TDs and MEPs was sparked by the determination of the Government to press ahead with the appointment of the Secretary General of the Department of Finance Kevin Cardiff to a plum position at the European Court of Auditors.

There is a widely held view that the proposed appointment of Mr Cardiff will be seen by the public as a reward for an official who had held a senior position at the heart of government at a time when the country rushed headlong towards the implosion of the economy.

Within Fine Gael, there is also deep unhappiness at the announcement to close the Irish Embassy in the Vatican, a decision open to question, which is being laid at the door of Foreign Affairs Minister Eamon Gilmore.

"The closure of the Vatican embassy and the Cardiff decision dominated the party meeting last week," a Fine Gael TD said yesterday.

"Mr Kenny was clearly rattled, but he just said 'this is going to happen'."

Also last week, several senior figures within the Coalition raised doubts as to the ultimate wisdom of the government decision to pick a confrontation with the banks in relation to an interest rate cut.

The decision to call in bank chiefs for a public dressing down will prove popular in the immediate term, but more experienced government figures are concerned that the banks' future may be threatened by a perception of hands-on ministerial involvement.

The Sunday Independent further understands this weekend that the Government is putting pressure on the chairman of the Mahon tribunal to publish his report early next month.

If published then, the report of Mr Justice Mahon, which is expected to be critical of former Taoiseach Bertie Ahern, would deflect bad publicity for the Government at a time when it plans to impose budget cuts and taxes of €3.8bn.

However, the tribunal chairman is said by government sources to be concerned that the publication of his report at this time may affect the impending trials of former councillors on corruption-related charges arising out of payments associated with the planning process.

It is understood that Mr Justice Mahon is, as a result, inclined to publish his long-awaited report in the new year, possibly in February or even later.

While the Government seems intent to preoccupy itself with domestic politics, policymakers in Europe are racking their brains about how to solve the mounting sovereign debt crisis.

Several options remain open to deal with the issue, the most obvious of which is for the European Central Bank to wade into the financial markets and dramatically increase its bond-buying programme.

Mr Martin said yesterday that it was important for the Taoiseach to realise that the forceful emergence of a German/Franco axis may "cause difficulties down the line" in terms of approval for treaty change in Ireland.

The ECB has been buying up Italian and Spanish debt since August, but not in sufficient quantities to prevent bond yields rising to dangerous levels.

Strong opposition to an expanded bond-buying programme has in the past come from German Chancellor Angela Merkel, who fears it will give rise to inflation, but the intensification of the crisis throughout Europe may lead to a rethink in Berlin.

At home, however, Mr Kenny has been accused by Mr Martin of failing to properly engage on the issue at European level.

He said: "The reform agenda currently being developed at EU level will do nothing to address the underlying causes of the crisis and is undermining confidence.

"A series of reform proposals should be formally tabled which focus on financial and monetary reform alone.

"If these measures can be brought together in a Dail motion which attracts cross-party support, the Government will be in a position to start getting involved in the negotiations which are already under way."

Mr Martin added: "Since March, I have been trying to push the Taoiseach on this issue, raising it with him nearly every day in the Dail. I have been pushing him to recognise the extreme urgency of the situation.

"As confirmed yet again this week on his record in the Dail, in eight months, the Taoiseach has not held a single substantive meeting with a eurozone leader.

"Before the recent summits, Ireland submitted no proposals and placed no item on the agenda.

"The Taoiseach did not even hold one phone call with a eurozone leader.

"He silently agreed to a joint communique at the last summit, which states that co-ordinating tax policies is central to solving Europe's problems.

"Ireland's negotiations went from being highly active before February to effectively non-existent now."

Mr Martin said: "The Government's policy of sitting on the sidelines is achieving nothing and helping a situation where Europe's leaders are making the crisis worse everyday."

Sunday Independent

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