Deal mustn't be a short-term fix
Published 05/12/2010 | 05:00
There were two contexts in which the negotiations between the Irish Government and the EU/ECB/IMF nexus could have been conducted last week. It could have been about what we can do to save the euro or it could have been about what Europe and the wider world was willing to do to save Ireland. Our Government chose, wrongly, to work within the former context and presented themselves as suppliants.
Thus they ended up with a solution which is nothing more than a short-term bailout for our delinquent banks in which we have given much and received relatively little. Long term we are borrowing far too much money at rates we cannot really afford and we will be back here again soon enough.
From the point of view of those who sat across the table from our negotiators, it was a very satisfactory deal. Our negotiators never asserted the vital role which the EU and the ECB needed Ireland to play in protecting the other members of the eurozone. And they never seriously pursued the possibility of a default by this country on some of the more crippling bank debts for which we have now become responsible.