Monday 26 September 2016

Ireland would not benefit from Noonan pushing our case too far... at least not yet

Published 08/07/2015 | 02:30

Taoiseach Enda Kenny arrives at the emergency summit in Brussels yesterday. Photo: Reuters
Taoiseach Enda Kenny arrives at the emergency summit in Brussels yesterday. Photo: Reuters

Most good deals Ireland ever got during its 42 years of EU membership involved at least some coat-tailing of the larger member states' pursuit of their demands.

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People who criticise that reality have a poor concept about where Ireland fits as less than 1pc of the EU population. Irish coat-tailing happened time and again in agriculture, as Ireland followed France for a sliverette of whatever Paris successfully got its farmers.

In the 1990s, a huge EU regional and social package was successfully fought for by the so-called "poor four" of Spain, Portugal, Greece and Ireland. When it came to minimising the impact of EU social laws, Ireland in dread of scaring off multinational investment, slipped in behind Britain.

So, as Greece teeters yet again on the brink of staying with or leaving the eurozone, is this a good time for Ireland to refashion its arguments and again push a strong case for retrospective debt forgiveness? On the face of things, it would appear tempting to do just that.

Things are in flux. Eurozone government leaders appear to have entered a zone where they must think the hither-to unthinkable.

But at teatime in Brussels last night, Finance Minister Michael Noonan made it very clear that he had no intention of doing any such thing. In so doing, he took more strides away from the claims the Taoiseach made precisely three years ago in Brussels: that he had got retrospective help on Ireland's €40bn legacy debt.

Again, Mr Noonan spoke of how Ireland, in common with the other "bailout graduates" Spain and Portugal, had already been given interest rate reductions, lengthened repayment terms and other varied loan conditions. These, he said, were the kind of things which would be available to Greece.

The bigger issue - of debt write-downs or forgiveness - would not be discussed immediately. Mr Noonan got to know Brussels negotiating sessions in the 1980s and again in the 1990s. And this time round, he has had four years of regular visits and many long nights in the EU and eurozone meeting rooms to judge this one.

The stakes are very high for all concerned. Losing Greece opens a huge series of risks which threaten the future existence of the EU single currency. But the price of keeping Greece may just be too high.

The leaders of all the 18 other eurozone nations face having to return to their voters to justify the considerable cost of their "kindness" to Greece. It is a high-wire act. Ireland suddenly interjecting a set of its own demands would be ill-judged and politically inept.

Mr Noonan has yet to formally say definitively: "No. We're not looking for retrospective write-downs on our Irish bank debt."

But he continues to stress how Ireland can borrow more cheaply on bond markets and also increasingly is eyeing the option of selling off the taxpayers' equity in the previously crocked banks as a remedy.

All of that being said, it is now time for Ireland to set down a strong marker on how this country has paid a considerable amount to keep the euro stable. We may not collect soon - or maybe not at all. But it is worth putting down a marker for the future.

Irish Independent

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