Europe profiting from our misery -- ex-NTMA boss
Somers hits out at action from our euro partners
Published 23/01/2011 | 05:00
THE former chief executive of the NTMA, Dr Michael Somers, has slammed claims made by EU President Jose Manuel Barroso that Ireland has only itself to blame for its banking problems.
Asked by the Sunday Independent for his reaction to Mr Barroso's angry rebuke of Socialist MEP Joe Higgins' critique of the terms of the so-called EU/IMF bailout in Strasbourg last Wednesday, Dr Somers said: "I was quite surprised by the heat of his remarks, especially coming from a man from a country which itself has problems [Portugal], I was quite surprised at the level of hostility that he seemed to project towards an elected Irish representative [Joe Higgins], whether you agree with that representative of not."
Commenting on Mr Barroso's claim that the EU was in no way responsible for Ireland's difficulties, and was only now involved "as part of the solution", Dr Somers said that in lending us money our European partners "were only supporting themselves".
He said: "The money that they claim they are lending to us; that's money to replace the money that was lent to us on the interbank market by other banks within Europe. So all they are doing is giving the Irish banking system money to pay back other banks in Europe.
"No money has disappeared out of the system or anything. Whether they like it or not, if they wanted to do something about it, they should have looked at it earlier on to see why was the Irish banking system taking so much money out of the rest of the European banking system? If they knew about it, what did they do about it? And if they didn't know about it, why didn't they know about it? God knows the statistics were there."
Commenting on the punitive levels of interest being charged on the money being borrowed by Ireland under the €85bn EU/IMF bailout, Dr Somers said it wasn't the "behaviour you would expect of your European partners".
He contrasted the loan penalties now being imposed on Ireland by the EU with the subsidies its precursor, the EEC, had given to encourage us to join the European Monetary System (EMS) in 1978.
On this, he said: "I remember very clearly when the major countries in Europe were trying to set up the European Monetary System. They actually offered us interest subsidies at the time.
"They were so anxious for us to break the link with sterling and join the EMS that they gave us loans with an interest subsidy attached to them because they knew it would be difficult for us due to the close links we had with the UK.
"It was important for them politically to have credibility by having as many countries join the EMS as possible. Now when we get into this spot of bother, instead of giving us subsidies to help us get out of trouble, they charge us this huge penalty of 3 per cent. I mean it's not exactly the behaviour you would expect of your European partners, that they make a profit from the help they give you."
Returning to the issue of the blame, he added: "They shouldn't start blaming the Irish taxpayer, because that seems to be what Barroso is at.
"Maybe we did, or maybe some people did in respect of borrowings, but they [the ECB] must have known.
"Our central bank was no longer an instrument of Irish public policy. They emphasised their independence and that they were part of the European system of central banks, with their head office in Frankfurt."