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THE more you meet the kind of people who were allowed to borrow billions from the Irish banks, and the kind of people who lent it to them, the more you wouldn't be surprised that we ended up in the mess we are in. They would not strike you as the most thoughtful of people. Some seem like good crack and appear personable and good at the old shit-talk and at making people feel good. And no doubt many of them had balls and guts. But they are not the deepest thinkers you ever met, or the most far-seeing people.
But they got the banks to believe in them to a staggering degree. It doesn't seem to have been too difficult. We were reminded last week about how Achilleas Kallakis, who was a conman, fraudulently got hundreds of millions out of AIB in the good old days. His strategy seems to have been that when AIB guys should have been checking out his lies, he had them on jollies at the World Cup final and in Mauritius, so they gave him the money.
The degree of our banks' willingness to loan money to chancers might explain why, according to Eurostat, Ireland paid more than any other country in Europe – including Germany, Europe's economic superpower, or Greece, Spain or Portugal, the other basket cases – towards the cost of the banking crisis between 2007 and 2011.
But it can't be all the fault of Anglo and the other banks that wanted to be more like Anglo, can it? It can't all be the fault of our property bubble. For example, we have paid nearly 20 times what Spain has paid towards the cost of the banking crisis, yet Spain had a bubble and bust and a banking system like ours – the main difference being that Spain is way bigger than Ireland. Yet we paid 20 times what they paid – probably not helped by the fact that we came clean-ish about our banking system early on while the Spanish continued to hide the problems in theirs.
Greece, a far more delinquent country than we could ever dream of being, a country that lied and cheated its way into the euro, a country where hardly anyone pays their full taxes, a country whose public sector is wildly corrupt, somehow actually made money on the banking crisis.
We even paid more of the cost of the banking crisis than Germany, a country that goes around acting like it is paying for everyone else's madness, a country whose economy is one of the biggest five in the world. According to Eurostat, the Germans have paid only €40bn towards the cost of the banking crisis. We topped them by contributing €41bn. To put things in perspective, that's 25 per cent of our GDP. Germany paid 1.5 per cent of its GDP. Each German paid €491. Every man, woman and child in Ireland paid nearly nine grand a head towards the banking crisis.
As the Financial Times put it last week in its editorial: "In the Irish case, nearly half the country's annual income has gone to making whole private, risk-taking investors, mostly from other euro members."
This situation is patently wrong. There is no question that no matter how wrong we got it in this country, one tiny island off the coast of mainland Europe should not be paying for nearly half of a banking crisis that everyone accepts was not totally our fault. The banking crisis was a virus that spread throughout Europe and occurred in the context of a huge interconnectedness within Europe. We were part of a single currency when it happened. And while everyone knows now that it is daft to have a currency union without a banking union, they weren't so wise then. Europe's banks and economies, however, were interconnected enough that we as a people were essentially forced by the ECB into taking on the debts of all our banks, despite the fact that they were private institutions that had been making billions in profits for their owners for years. We never got those profits, but we were asked to bear the losses when they came, in order to be good little Europeans.
We have continued to be good little Europeans, and if Europe ever suspects we are on the verge of becoming disillusioned, they make vague promises of a deal on that bank debt. Or indeed slightly more concrete promises, as they did in June. And then when we try to get them to commit, we get all the reasons why it will be very complex and difficult and why it is unprecedented and why loads of other stuff has to happen first and we can't do it until we've done this, that and the other. And that will take a year, and we have to bear in mind that there are elections coming up in Germany and nothing can happen before that. And when they talked about breaking the vicious cycle and the toxic link between bank debt and sovereign debt they actually weren't talking about any legacy debt that has already been incurred. In fact, they meant in the future to make sure it doesn't happen from now on. Oh no, they were never talking about fixing the current crisis.
We are generally condescended to and made to feel like fools for not understanding why we can't get a deal on bank debt, even though we've been told categorically we are getting one and that we should get one. And, after a while, we have started feeling a bit like fools. In fact, it has started to feel like Europe has no regard for us. But like any charming bully in an abusive relationship, just when we're about to walk, they throw us a bone. Sometimes you would even think that if it were up to everyone else apart from the Germans we would have a deal by now.
As our stint as President of Europe got under way, the head of the European Council, Herman van Rompuy, said again that we should get a deal on our bank debt. Van Rompuy gave the required speech from any European visiting Ireland about how we are great and an example to everyone, but critically he did say that the vicious cycle between banks and sovereignty had to be broken "especially, especially, for Ireland".
The European Commission, in that leaked draft report, recently said that all the progress we've made here could be destroyed unless a deal is forthcoming soon because we are reaching the limits of how much we can do on our own. And let's face it, we have done as much as we can do on our own. We need them to do their bit now.
So in one sense they are all on our side and they all agree we need a deal. But still it never happens. The eurozone finance ministers will meet again tomorrow to discuss bank debt and sovereign debt against the background of a leaked report which says that countries getting ESM-funded bank rescues would have to guarantee any losses on such rescues, which would be pretty much useless for us. One official quoted in the Irish Times predicted that the talks will end up in a compromise that no one will be fully satisfied with. In other words, more fudge. But we have had our fill of fudge.
Michael Noonan should make one very clear argument to his colleagues tomorrow. Putting aside all the jargon and the politics and the red tape, Ireland is the only country that has had to pay for the rescue of private sector banks the way we did. The reason for this is because we bailed out our banks sooner than anyone else did. And the reason we did that is because we were forced into it by Europe and the ECB in order to save the rest of the eurozone.
It is against the philosophy of the EU that we should be singled out like this. It is even more disgraceful that we are being penalised for having helped out the rest of Europe. We were promised a better deal on this debt, and European institutions agree that we need this deal at this point because we have reached the limit of what we can do on our own steam. Leaving aside EU bureaucracy and confusion and fudge, there is only one logical, just and moral thing to do, and that is to give us a deal on bank debt to allow us to survive and to thrive.
