Wednesday 22 November 2017

Hatred, disgust, anger -- Europe's feelings for us

Failure to conclude a deal on unsustainable debt prolongs penance, but Government happy to wait


"OF course, Ireland has few friends in Europe at present. You have bust banks, a broke economy and McCreevy was a c*** when he was here," one senior diplomat exclaimed when asked of the true feeling towards our country.

"Ireland has lost much of the goodwill that once existed towards it and people here have run out of patience," said another.

Deep within the cavernous Justice Lipse Building, directly across the road from the iconic Berlaymont Commission Building, journalists from all over the world and officials from member states awaited word from the leaders who had been locked in session for over five hours.

It was late -- past midnight on Thursday -- a beer or two may have been had, so passions were running high, but there was no doubting or hiding the anger towards Ireland.

In a city where grey and unremarkable dominate the thinking and the skyline, the anti-Irish sentiment in the cafes, in the bars and in the media rooms was palpable and telling.

Although Ireland had officially been taken off the main agenda by Enda Kenny before he arrived, our fate was never far from the lips of all those gathered in Brussels.

The failure to conclude a deal on our crisis means that Ireland's penance was prolonged and the torture of our unsustainable level of debt has been kicked to touch for another day.

In typical EU fashion, a summit that had been billed in advance as make or break for Ireland and the wider European project, failed to live up to expectation. We had hoped for another bloodbath between Kenny and French President Nicolas Sarkozy, but alas it was not to be.

"In respect of Mr Sarkozy, the Gallic spat we had last time has certainly concluded pro tem and we shook hands several times during the course of this particular meeting," he said to me on Friday.

All friends again, we were told.

Utter nonsense.

What is clear from this summit is that Ireland has many fences to mend before our so-called partners will be willing to listen to our pleas of poverty. We have enemies and they want to give us a good kicking.

Chancellor Angela Merkel is tired of bankrolling us but feels that the Germans are helping us become better and more responsible Europeans.

Germany wants to see us continue on our austerity purge, given that it is paying for us to keep the lights on.

It's not personal, the Germans tell me. Why should they pay for our banking crisis and our overpaid public sector, who earn at least one-third more than theirs, they ask.

France, however, is seeking to torture Ireland for the crimes of our bankers.

Into the fourth year of a recession and the third year of our banking crisis, this summit was supposed to finalise a solution to Ireland's debt mountain and its failed banking system.

In a chilling warning to Ireland, Swedish Prime Minister Fredrik Reinfeldt told me that it took his country seven to eight years to recover from its banking crisis in the 1990s -- and that was after a devaluation and a burning of bondholders. Ireland doesn't have either option at present.

While Portgual, Libya and Japan dominated the plenary sessions of this summit, much of the crucial talk from an Irish perspective was happening behind the scenes.

The latest CSO figures, released last Thursday, which showed that the domestic economy shrank by 2.1 per cent, only serve to highlight the urgent need to end once and for all the uncertainty and clouds that have hung over us since 2008. From peak to trough, the domestic economy has now shrunk by an incredible 23.3 per cent and is yet to bottom out.

Before touching down in Brussels on Thursday, Kenny, using the cover of the bank stress-testing, called EU Council President Herman Von Rompuy asking for Ireland to be taken off the agenda until after the stress-test results are published next week.

Since taking office, the Taoiseach and his Government have repeatedly spoken of the need for a speedy solution to our problems.

So why now ask for the delay? Why the change in tack? Was it all because they feared they would be told to shag off?

"It's better to wait, rather than agreeing to an inferior deal," said a government spokesman.

The Government's thinking is that its best chance of a deal is to take it away from Council level, where egos and tantrums from Sarkozy, Berlusconi and others could easily jeopardise any progress.

By kicking the issue to the finance ministers, who meet in Budapest in two weeks' time, the hope is that a more business-like approach can be taken and that real progress will be made.

It is now up to Michael Noonan to deliver for Ireland. Intense dialogues between his office, the European Central Bank and other EU countries have been ongoing since he took over.

"There is no doubt that there is a battle to convince our neighbours about Ireland's merits. We need to show that we can deal convincingly with the banks. If we can do that, then we will have done a lot to restore confidence in the country," a government figure said.

The Government's ambition is to get the European Central Bank to extend long-term loans to Ireland in a bid to restore international confidence in our banks. This strategy is aimed at ending the reliance of our broken banks on emergency funding of more than €150bn from the ECB.

While the corporation tax rate never came up at the summit, what is now clear is that we will get a better interest rate on the €85bn bailout, with most people expecting a 1 per cent reduction.

Also, the Central Bank governor Patrick Honohan met the bosses of the Irish banks on Friday to give them the preliminary figures from the stress tests, with estimates of €28bn being needed to plug the hole.

Former president of the European Parliament Pat Cox described the stress tests as the Government's last chance to get the numbers right.

Given the state of the economy and our banks, that after three years of crisis there is still no end in sight is abominable. Cox is right, this is our last chance to save ourselves.

Sunday Independent

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