Saturday 24 March 2018

Spirit of rebellion still dimly flickers

Ireland needs to leave the eurozone, float the punt and settle debt in due course for the sake of survival, writes Frederick Forsyth

Frederick Forsyth

SO the Irish have had their general election. Patrick has spoken. But I fear he has only exchanged Tweedledum for Tweedledee. The useless Brian Cowen was a solicitor. The new Taoiseach was a teacher. Neither has the scarred knuckles needed to take on the European Central Bank in Frankfurt.

Mr Kenny says he will seek to renegotiate the utterly disastrous settlement Mr Cowen conceded to the EU to bail Ireland out of its mind-numbing debts. I can confidently predict that Paris, Berlin, Frankfurt and Brussels will consume Mr Kenny for breakfast and spit out the buttons.

The Irish may have been foolish, but by heaven, they were massively encouraged to be foolish. And the biggest fools of all were the leaders -- the bankers and the politicos who have escaped with minor inconveniences.

The ordinary man and woman across the land did no more than believe what they were told. Now they are being ordered to live on their knees.

They were told a unified bank lending rate would suit everybody. A lie. From Day One 10 years ago Germany needed a low rate to encourage lending (by banks to applicants) to pump-prime their economy. The Celtic Tiger needed a penally high rate because it was over-heating. Frankfurt only exists to please Germany, but the Irish did not realise that. So they borrowed like drunken sailors. Now they can't pay it back.

So Mr Cowen swallowed a €72bn bailout based on an austerity programme of €13bn a year. That is costing every Irish family €3,900 a year, plus massive redundancies. The blurb says all this is to 'save Ireland'. Piffle. It is to save the Irish banks rather than let them go into receivership.

But why should the Germans and the Frankfurt-based ECB care abut Ireland? They don't. Chancellor Angela Merkel doesn't care a stuff about Ireland, her bankers or her bakers. It is all because the Irish banks borrowed from other EU banks and if they are allowed to go to the wall, (as they should, like any other insane businessmen) the EU banks will take the hit for their equally imprudent lending.

There is a perfectly good argument: you go down to the Curragh, bet heavily on a horse, and after a couple of circuits in the lead, it stumbles, falls and loses. Can you then tell the Irish taxpayer, 'I expect you to reimburse me everything I lost, plus interest as if I had won?' That, effectively is what is happening.

For the Euro banks poured their loans into the Irish banks who poured it all into the pockets of some dodgy property speculators, bloated like bullfrogs on a bubble of their own creation. If the money cannot be squeezed out of the Irish people, even if it means poverty and debt for a generation, the Irish banks go into liquidation like any street-corner gastropub when it fails.

But if that happens, they cannot pay their own creditors, the so-called 'bond-holders' who, let's face it, were just very bad investors who picked the wrong horse. Ah, says Berlin and the ECB, but banks mustn't go bankrupt. Why not? Across the Atlantic Bear Stearns and Lehmann Brothers did and I don't see the Americans being crucified. So why the Irish?

The short answer is because Ireland is seen as small and biddable, and Ireland came after Greece. Greece scared Ms Merkel badly. It lied and lied and lied, and then went bankrupt. The Greeks also rioted and threatened to bring down the Germans' beloved euro. And never forget the euro is only the Deutschmark in a different shape.

Greece should never have been in the eurozone in the first place, but Germany let it in for entirely political, not economic, grounds. So Germany took the hit. The German taxpayers bailed out Greece but then let Ms Merkel know in no uncertain terms: NEVER AGAIN. That's why the ECB team, representing Germany, has been so merciless with the Irish. They had a premier who trembled and they were not going to riot. Well, not so far.

I could be mistaken, but I get the impression even from across the Irish Sea that Patrick is very close to rebellion. It's the injustice of it all that sticks in the craw. But is there anything that, in practical terms, the helpless Irishman can do? As a matter of fact, yes.

If I were the Irish I would immediately join at constituency level the party of the government TD who now holds that seat, regardless of how I voted. Once inside the party, the majority can take over the constituency and demand to be heard.

And what they might say to their TD, re-elected or brand-new is: "Just look here. You are not in office to do what the Germans want. You are not in office even to do what Enda Kenny wants. You are here to do what we want, or you will not be nominated again."

Now any TD who has just arrived in the Dail would like to stay there for 10 years, at least. Faced with that threat, they tend to become really democratic. Meaning they want to please the people. And the message should be: "We want you to go back to Dublin and with others force through a Referendum Bill. We want it by late spring. And the question must be: 'Do we want to abide by the German terms or do we want to let our rogue banks and their bond-holders go to the wall?'"

There is no need to be more explicit. The rogue banks you are now supposed to save would be replaced, as they have been before, with new banks set up by hard-headed businessmen with charters to go back to first principles and behave like people-serving banks, not casinos.

Then you could instruct your government to leave the eurozone, let the punt float (and depreciate) and settle the reduced debt in due course. That is what (without any publicity) Iceland is doing, outside the euro and outside the EU. And she is coming back from the abyss.

Is the above a terrifying course of action? Too right. Absolutely frightening. Taking on Berlin and its Frankfurt bank? It's David and Goliath. And there will be pain. But the Irish can take the pain as masters in their own land or as conquered serfs. And there is one ace in the hole.

Behind the facade of German steel, Berlin is frightened by Ireland. It is not the economic power -- Ireland doesn't have any. It's the contagion. Rebellion can be catching; defiance might spread. Letting Ireland go could save Berlin's beloved euro. A long dogfight could trigger imitators. The key would be the result of the referendum. A massive vote against the bailout terms would leave no doubt about the preparedness to fight once again for the emerald isle. And maybe, just maybe, somewhere in the darkness, the spirit of Michael Collins still dimly flickers.

Frederick Forsyth is the author of The Day of the Jackal, The Odessa File, and The Fourth Protocol, and other bestsellers and is patron of Better Off Out, a group calling for Britain's withdrawal from the EU

Sunday Independent

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