Monday 24 October 2016

Anglo is one reason Germans lost patience with us

Published 11/10/2013 | 05:00

German Chancellor Angela Merkel: in negotiations
German Chancellor Angela Merkel: in negotiations

WITH our small country longing to be noticed and liked in the greater world, it is tempting at first glance to be flattered by Ireland featuring in coalition government negotiations in Europe's most powerful state, Germany.

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But just a moment's reflection will tell you that this is notoriety Ireland can do without. There have been many straws in the wind, going back 20 years, which suggest that official Germany has lost patience with the Irish. And this latest development is more substantial.

The respected German newspaper, 'Suddeutsche Zeitung', yesterday reported that the German Social Democratic Party, SPD, objects to the EU extending a credit line to Ireland for the tricky exit of the bailout programme from next month onwards.

In coalition talks with Chancellor Angela Merkel's Christian Democrat CDU, the SPD has demanded that the new Berlin government insist Ireland change its 12.5pc company tax rate in return for the EU bailout exit support.

The Irish Independent's Anglo Irish Bank tape revelations – executives raucously bawling out 'Deutschland, Deutschland Uber Alles' – were clearly a big bugbear. That little nugget ensured that the whole Anglo affair would not be forgotten in Germany.

But this issue really goes back almost 20 years.

Ireland's successful EU tax negotiations in the mid-1990s were privately described by one Brussels diplomat as far tougher than any of the regional and social grant aid wrangling which delivered billions to this country.

The 12.5pc rate has over the years been attacked by French leaders like former premier Lionel Jospin and later by president Nicholas Sarkozy and German Chancellor Merkel.

This criticism was again taken up by the SPD during campaigning in last month's federal elections in Germany, which were won by Chancellor Merkel. She stopped just short of an overall majority and is now involved in coalition talks with both the SPD and the Green Party – talks that led to Ireland occurring in despatches.

Everyone in Government Buildings in Dublin will hope that this is just showboating and/or a negotiating tactic by the SPD. But, as an Irish soccer XI take the field against Germany in Cologne tonight, the issue again puts the focus on a shift in German perceptions of the Irish.

The 1950s perception of Ireland, driven by the German writer Heinrich Boll's 'Irish Journal', as an island of innocence in a cynical material world, has long been banished. And yet there is no hostility among the generality of Irish and German people. Research published in summer 2012 showed a relatively benign mutual image by both populations.

But official Germany also knew much about Ireland's excesses in the recent boom years. You may not remember Christian Pauls by name but you probably will recall that as German Ambassador to Ireland he rightly set the cat among the pigeons when he addressed a German business group in Clontarf Castle in September 2007, a time some of us still thought the boom was headed for 'a soft landing'.

Mr Pauls soon found himself at the centre of a phoney row about his right to say the things he said. He was called to the Department of Foreign Affairs to be formally rebuked. But his message sounded dangerously like the unvarnished truth.

Let's try a few of his reflections to jog your memory. He said Irish junior ministers were paid more than the German Chancellor; some Irish consultant doctors derided €200,000 per year as 'Mickey Mouse money', while their German counterparts were happy with one-third of that sum; a house in Clontarf had sold for more than a skyscraper in Frankfurt.

It certainly sounds like the deluded way we were then. It might also have something to do with why Irish 'moral arguments' about the country taking a €64bn banking 'hit' to buttress the eurozone has limited resonance in Berlin.

In Ireland, as in the other struggling economies across the EU, there is a widespread view that Germany could and should do more to lead a recovery in the eurozone. German workers, still paying the cost of taking on 17 million poverty-stricken people from the old East Germany in 1990, take a more national view of things.

Angela Merkel won a remarkable third general election in a row because she showed herself to be in tune with the average German worker's ultra-cautious world view.

Asked about Ireland on the night of her latest election victory last month, she said: "Our course of European policy will not change. Ireland has made good progress, this progress was not made in Germany, it was made in Ireland on the basis of the Irish understanding that things had gone wrong in the past few years."

Dr Merkel added her "sincere respect" for Ireland persisting with austerity. It only takes a minimal amount of decoding to understand that means Ireland can shift for itself.

Irish Independent

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