News Analysis

Friday 22 August 2014

Bruce Arnold: I still believe in you, Enda, but on this issue you are lost

Published 28/05/2012 | 17:00

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We have known each other since you first entered the Dail in 1975 in a by-election. This followed the death of your father, a friendly man who had been a junior minister in Liam Cosgrave's 1973-77 administration. I have written often about your career, most notably the last election where I spotted early on that the strategy you followed derived in part from Jack Lynch's highly successful 1977 campaign. I supported your campaign, believing in the removal of Fianna Fail from the power they had abused.

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As recently as last Friday came a revelation about how misguided and inept the party's handling of the economy was. The 'Evening Herald' carried an astonishing admission from the Fianna Fail leader, Micheal Martin, that the disastrous bank guarantee of September 2008 had been "for the euro".

He admitted we had put ourselves into debts, now running upwards beyond €60bn, for the sake of the eurozone countries and doing so without guarantee of recompense.

Mr Martin had the impudence to call for a new deal on the bank debt and on the promissory notes. He added the even more absurd suggestion that we should use the upcoming treaty refere-ndum to "leverage a fairer deal" on the bank guarantee.

We already knew it was a tragic mistake and that it led to our virtual loss of economic sovereignty. But we did not know it was a deliberate act, unsecured by any private agreement, and placing on us not just the huge burden of bank and bond debts but also the bailout stranglehold which has since governed our finances.

Unsuprisingly, Enda, I welcomed with profound relief your strong entry into the general election and your eventual victory. In general terms, I have not changed that view.

Nevertheless, many have. At the heart of their thinking is a new phenomenon which I believe is a significant factor in Yes vote support. It can be briefly stated thus: "Irish people who do not profess to understand the economic complexities of the fiscal treaty, the European Stability Mechanism, or how much further the euro has to go before it collapses, no longer want economic responsibility reverting to Irish politicians, because they can't be trusted. It is, therefore, better to vote Yes, surrender our future to the eurozone, and accept austerity government by Germany. Although this represents the ultimate surrender of Irish sovereignty, the justification for this is evident in the muddled views of your Government whose thinking is seen as being akin to last administration, if there is thinking there at all."

I concur with this view. There is confusion. The extent of the surrender of sovereignty has yet to be measured. I also believe we face abject submission to an absurd sequence of treaty decisions, this referendum being the first. That is my strongest reason for proposing a No vote.

I am concerned, Enda, with your dogged determination to approach this referendum in a wholly partisan way. You ignore huge gaps in our understanding. You accept the likelihood of unbending harshness in future German control. You think it of no importance that eurozone treaties and EU treaty amendments are back-to-front and unexplained. And you don't tell us that in July we start paying into a European Stability Mechanism which is not yet part of European law and has been structured without any transpar- ency or any democratic control over its operation. The sums involved are huge.

Combined with despair among those Yes voters who feel they can no longer trust the people they elected to govern them, there is a strong element of fear which has been engendered by wildly exaggerated interpretations of the doleful results from voting. The supposed results are simply untrue. All that will happen if we vote No is that the other decisions will be delayed and we will learn more about whether or not the absurd proposal by Mr Martin will, under your wiser guidance, lead to a lighter economic burden on us.

We should have recognised by now that it is not the euro that is to blame. It is those who manipulate the rules surrounding it. We should be seeking control over them. Blocking Thursday's poorly understood decision would achieve this.

Austerity will not solve loss of competitiveness or excessive debt. Austerity will ensure the debt-to-GDP ratio rises rather than falls. That problem remains and we should block progress until it is solved.

The blockage is due to the fact that the Economic and Monetary Union is system-atically dysfunctional and will eventually be unwound or restructured. We should act on that truth, rather than on the fiction that we can rely on Brussels. But in no circums-tances can we rely on you.

If Fianna Fail -- and notably Brian Lenihan -- had listened to David McWilliams in September 2008 they would still be in power. If you listened more to what McWilliams says forcibly on the folly of a single currency and the futility of austerity, you would have done the country vastly better service. Instead we face Ireland's further surrender to a non-existent federal Europe. As things stand, the real worry of a Yes vote is that there will be a further economic deterioration and the door open wider for Sinn Fein at the next election.

Shane Ross is sensible on why we should vote No. We do need to see how things will turn out over the summer as regards whatever "growth pact" Hollande and Merkel may come up with. We need to see also how the issues hanging over ratification of the upcoming ESM treaty may work out. We can always re-run this referendum if a No vote this week proves mistaken. We cannot rescue ourselves from the finality of voting Yes.

It is absurd to approve a fiscal treaty which would tie future Irish governments to balanced budgets and to a 'debt brake'. Doing so in order to have access to a fund which does not yet exist and which depends on an ESM treaty not yet ratified is also absurd.

I remain loyal to the ideas I formed about your leadership more than a year ago. I am less sure than I was.

Nevertheless, our defence of our sovereignty may require even your strongest supporters forcing on you a democratic decision which is not in your power to dictate as you and other members of the Government have dictated during the past month's campaign. It is our decision. I regretfully hope it will be against you.

Irish Independent

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