News Analysis

Saturday 30 August 2014

Shane Ross: Beware Avenging Angela if chancellor is re-elected

The canny Greeks pulled off a staggering coup last week, but the real Angela Merkel hasn't gone away, you know

Shane Ross

Published 02/12/2012 | 05:00

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GOD help us all if Angela Merkel wins next year's German elections. The chancellor is a pussycat today compared to the spectre of a victorious Angela next September. Facing the polls, she is currently at her most fragile. She fears the same electoral fate as French president Nicolas Sarkozy suffered in May.

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No one sensed her weakness better than the canny Greeks last week. On the brink of starvation and poverty, destitute Greece outfoxed affluent Germany and pulled a mighty prize out of the negotiations. They eyeballed Angela, waving the threat of European anarchy and the collapse of the single currency if they were allowed to sink. Angela blinked first. While champagne corks were popping in Athens on Monday night, there was sobriety in Berlin and Bavaria.

What was the mood like in Dublin? Was our position strengthened or weakened by the Greek success? Were the Greeks blazing a trail for indebted nations? Or had they exposed us as compliant German satellites?

Greece knew what everyone knows, that at this very moment there is a window of opportunity in European battles that is unlikely to last. That window closes next September. Until then the great powerhouse of Europe wants a quiet life, a stable continent until her date of destiny with her electorate. After that the real Mrs Merkel will stand up.

A Greek bankruptcy and the country's consequent exit from the euro was a real threat to the existence of the single currency and the re-election of gentle Angela. The alternative, undisguised Greek debt forgiveness, would mean a German climbdown. The burghers of Bavaria would baulk at it and maybe even turn against Angela. They are in no mood for funding the profligate 'Club Med' countries.

Angela was caught in a bind. If the Greeks were allowed to go bust, the instability would spread throughout Europe. Other weak countries such as Spain and Italy could follow. Even Germany could not carry the burden of supporting the larger bankrupt states. So the pretence would have to go on, that Greece could be saved at little cost to the Bundestag. A magic potion was cooked up.

Well, Greece is now officially saved at least until 2014 when it is next due to run out of money. By that time the German elections will be over. Angela will be back in power. And God help Ireland.

Ireland does not seem to have spotted the nine-month window of opportunity. Instead, Enda Kenny and Michael Noonan are acting like election agents for Angela.

They are refusing to challenge the chancellor in her hours of weakness. They had better move fast or their own hour will have passed.

Greece has pulled off a staggering coup. It won lower interest payments on earlier loans. It was given back all the profits that the European Central Bank has made on its Greek bonds. The length of time allowed for Greeks to pay back certain debts was doubled. Their debt targets were diluted. And they will now receive buckets of cash to pay their public servants. No less than €23.8bn will arrive in Athens next month to ensure the ATMs work.

In return, Greece has promised to deliver on its austerity programme. Not a sinner in Berlin believes that the Greeks have the slightest hope – or intention – of doing so. Nor does a sinner in Athens. Yet the fudge suits both parties. Athens has won a respite until the next inevitable skirmish; Angela is cunningly carried over the electoral deadline without being forced to make any politically dangerous decisions. Game, set and match to Greece. They played the role of suicide bombers. It worked. If they had pulled the pin out of the grenade last week they might have taken the euro with them. And maybe Angela too.

Ireland and Greece have a common problem: unsustainable debts. Neither will be able to repay them. Yet Ireland continues to paddle the solvency canoe. We pretend we will be able to talk our way out of our penury. Greece has just blasted its way through the exit. The signs are that the Greek tactics are better understood in Berlin.

Not unreasonably, the Germans are dismissive of the Irish problem. We have been so compliant that Ireland's debt programme is seen as done and dusted.

God knows what Enda and Michael whisper to Angela and IMF high priestess Christine Lagarde, but whatever magic dust these two females sprinkle over the two lapdogs, it works wonders to tranquillise them.

We should merely mutter it under our breath – and hope that serial protester Richard Boyd Barrett does not overhear it – but the Greek people have played a far greater part in fighting the debt burden than we Irish. Here in Ireland a government imposing austerity has – according to opinion polls – astonishingly retained the support of a majority of its citizens. Maybe that is because our main opposition party is equally euro-compliant. Maybe it is because, thankfully, we are not a nation that burns cars and breaks windows. But maybe the sight of flaming vehicles in Athens makes a more permanent impression on Angela than the prospect of Enda arriving in Berlin with another bunch of roses.

While Greece has achieved a series of overnight reprieves, Ireland is left waiting. The promised reduction of our banks' legacy debts has been long-fingered. If Angela is re-elected in September we can wave goodbye to that. Michael Noonan set various deadlines for a deal on the Anglo promissory notes, the latest being Wednesday's Budget day. All have passed. No concessions have been won.

The Budget has been written in Berlin. Would the Greeks cravenly put up with a diet of property taxes, reductions in child benefits, hidden income tax hikes and savage health and education cuts on top of a massive drop in the standard of living?

Instead of dancing to the Merkel waltz we should take the fight to Berlin. We can seize the day for six long months from January to June next year. We will be playing at home. Happily, the Irish presidency coincides with the dying months of Angela Merkel's term as chancellor. She would hardly welcome the presidency being used by Ireland as a battering ram for hitting her at her most vulnerable time. Do Enda and Michael Noonan have the bottle to take the fight to Berlin as Angela faces her Waterloo?

Go for it. We will never get a better chance. The Greeks would, for once, be proud of us.

Shane Ross is the Independent TD for Dublin South.

Sunday Independent

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