Saturday 22 October 2016

Gene Kerrigan: Government needs a dose of reality to go with arrogance

Published 20/05/2012 | 05:00

In decades to come, books will be written about last week. Not just about the depression that followed the 2008 crash -- enough happened just last week to fill a volume or two. Those books will say it was the week when the scale of the problem dawned on those we call world leaders. They may well say that happened too late.

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The eurozone is in flitters, the global economy is under threat, the old policies have been exposed as grim hope-killers. And the EU leaders and their europhile media have done irreparable damage to the European project.

And what were our home-grown leaders up to during these momentous events? Posing, pouting and making gratuitously insulting remarks about the Greeks and about the Irish unemployed.

After watching the antics of Cowen, Harney and Lord Bertie of Sterling Deposits, some of us thought things had to improve. But, as the crisis deepened, we've had to watch, with increasing despair, as the pettiness of our leaders became ever more obvious.

The EU leaders and bureaucrats spent most of the week dithering about Greece. They want to kick the Greeks out of the eurozone, but they're afraid that might cost several hundred billion euro -- provoking even worse nightmares in Spain, Portugal and Ireland. The hard-working Greeks have been so abused that no leader can convince them that obeying troika orders makes sense.

(Hard-working Greeks, as in 42.5 hours a week, on average, compared with 35.7 hours for the Germans, and we're somewhere in between -- these are OECD figures.)

Merkel has been trying to micro-manage the Greek electorate -- and she did it with all the competence she brought to dealing with the depression. Meanwhile, instead of tackling the banks, the source of the catastrophe, she decided the eurozone countries needed her pet ideas implanted in their laws. Now, even Germans are sceptical about her fiscal treaty.

In France, the new president, Francois Hollande, has promised to reform banking, tax the rich, increase employment and stimulate the economy. That's what he said before the election. He may well do a Gilmore.

Meanwhile, former ECB head Jean-Claude Trichet said last week that, "the building blocks already are in place" for his federal solution. Which would, according to Reuters, give EU structures "the power to declare a sovereign state bankrupt and take over its fiscal policy". Trichet appears to feel we're all so desperate for a solution that he can publicly say what previously was spoken of only in private.

"The idea," Reuters reported, "earned a warm reception from leading economists and prominent Europeans."

By Friday, Barack Obama was trying to cast the G8 summit meeting at Camp David as an historic turning point -- urging European leaders to abandon entrenched positions and agree on policies that might head-off an implosion of the eurozone. Such a disaster could devastate the ailing global economy and -- far more important -- destroy Obama's chances of a second term.

Measures that might have made a difference in 2009 are now tentatively on the agenda. By trying to save the privileges of the elites, to shift the cost of the crisis on to the usual bearers of burdens, Merkel, Sarkozy and the rest have seriously damaged the EU. After almost four years of damaging austerity, panic is setting in. These people keep underestimating the scale of what is happening.

It would be nice to imagine that a belated blast of Keynesian economics would do the trick, but that's questionable, to say the least. We've tended to see these times as an abnormal interlude, out of which we will eventually escape. Instead we may come to see this period as the calm before the deluge.

And how have our leaders handled themselves, in these historic times?

Well, the Referendum Commission said that the law prohibits postponing the fiscal treaty referendum. These, said Shane Ross, are extraordinary times -- the treaty we vote on may be dead before the end of the month. So he brought a short bill into the Dail and suggested the Government change the law. Helpful, I thought.

Bugger off, said the Government. Eamon Gilmore reached into that lucky dip sack of pre-cooked answers he keeps under his desk and told Ross that postponing the referendum would send "a message of uncertainty to investors".

Well, Eamon, I don't know about investors, but postponing the referendum, at a time when events are shifting under our feet, would send the rest of us a message that the Government is awake to the world in which it's living. Besides, we all know that if Merkel wakes up one morning and wants the referendum cancelled it will be dead by lunchtime.

Across in Athlone, Enda Kenny was campaigning for Merkel's Law. When a man told him his children have emigrated, Kenny assured him the economy is "actually growing". To an unemployed man who challenged him, Kenny snapped, "You could do with a day's work, I'd say". Insulated from the effects of recession, with a big pension to come, Kenny and his like can't help seeing unemployment as a lifestyle choice.

Kenny's inability to prevent himself making such remarks is, I suspect, the reason he has so persistently run away from one-on-one debates, or serious interviews.

Poor Richard Bruton forgot the cover story and conceded that, yes, if we vote 'No' we'll be made to vote again. Then he "retracted" this. Do you believe Richard when he says you shouldn't believe what he said?

Meanwhile, Michael Noonan was explaining to a Bloomberg audience why he's not worried about the Greeks leaving the Eurozone. "Apart from feta cheese, how many Greek items do you put in your basket?" And he gave an involuntary chuckle, as though overwhelmed by his own wit.

Now, leave aside the gratuitous insult to the Greeks. It's the considered view of the Irish Minister for Finance, and no one else in the world, that a Greek exit of the eurozone won't damage us. "For big knock-on effects," he said, "you need to have very strong economic connections -- we don't have any economic connections, really."

His lack of grace and manners apart, this guy is for the birds.

RTE News reported that Noonan told the Bloomberg event that "the Irish economy is in a much better position than it was this time last year". As Enda Kenny told the man in Athlone, the economy is "actually growing".

I sighed at the hopelessness of all this. Michael Taft is made of sterner stuff. He went to his Notes on the Front blog and posted the government projections for 2011 and 2012. In each category -- growth rates, GDP, GNP, job creation, unemployment, real wage growth and public debt -- the figures show a drop.

Noonan and Kenny spoke nonsense. The media reported it straight. And left out reality. Because these are important people, who must be reported respect-fully, even when they are talking through their arses.

Reality doesn't matter. These people make up reality as they go along.

Sunday Independent

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