IN all the circus during the week, the most significant political moment was nearly lost. Surprisingly, it involved something that happened in the European parliament.
And more surprisingly, it involved Socialist MEP Joe Higgins. Joe, in fairness to him, told Jose Manual Barroso, president of the European Commission, what the whole country here is thinking: that the bailout is a sham. While Joe's little attack on Barroso was interesting, Barroso's reaction was even more interesting. As we would say in Ireland, he freaked.
In case you missed it, which you might have, what with the shenanigans in our own irrelevant chamber, it went something like this: Joe said that the emergency support fund that gave us to the so-called bailout was "nothing more than another tool to cushion major European banks from the consequences of their reckless speculation on the financial markets". He said it was a mechanism to make "working class people throughout Europe pay for the crisis of a broken financial system and a crisis-ridden European capitalism". He said that far from being a bailout, the IMF/EU intervention is "a mechanism to make vassals of Irish taxpayers to the European banks". He said that the EU had basically moved billions of private debt on to the shoulder of Irish people. He accused them of destroying our services and the living standards of our people.
And then Barroso freaked. The respectable Euro mask slipped and he finally -- and stupidly, really -- showed us what they really think of us. He roared at Joe that the problems of Ireland were created by the irresponsible behaviour of some Irish institutions and by the lack of supervision in the Irish market. He shouted that it was not Europe that created our fiscally irresponsible situation and this financially irresponsible behaviour. As a few others dared question Europe's handling on the bailout, Barroso went on to say that he was not used to hearing such nationalistic and prejudiced comments in the European Parliament.
But really, I am not doing Barroso full justice. You need to see it. When you're finished reading the paper go and look at it on Youtube or something (ask your kids if you don't know how). Barroso really lost the rag. He was out of control and in his lack of control, this man, one of the highest paid toilers in the Euro gravy train, from Portugal to boot, unveiled the truth about EU fatcat disdain for Ireland. We are the architect of our own downfall. Paddy wasn't fit to run his own affairs. None of it was anything to do with Europe or their policies or their interest rates or the European banks which recklessly lent money into our overheating economy. Neither did Barroso mention, as even Ireland's old enemy the Daily Telegraph pointed out, that Barroso's own staff "happily signed off on Ireland's accounts in their Stability Update in 2007 . . . agreeing that the country was 'operating responsible fiscal policy'". Barroso is rewriting history now, the Telegraph said, because the EU was not accusing Ireland of being irresponsible from 2004 to 2007, the crucial period when Ireland crossed the line.
But Barroso has rewritten history: we were irresponsible, probably drunk, we deserve what we got and how dare we question Europe's helping hand, even if it is at extortionate interest rates, which were necessary because we had to be punished and we had to be seen to be punished.
The fact that the emergency support fund is going to make billions on charging us high interest rates wasn't mentioned either.
It was a telling little insight. It also went a long way toward explaining to us what Brian Lenihan has to deal with when he goes out there and why he thinks it will require a lot of work to get any kind of renegotiation of interest rates. Lenihan has never shared this burden with us, but he is clearly dealing with people who hold the Irish in great disdain.
In terms of what Joe Higgins told Barroso, you probably agree with most of the
shane ross Back page, Business
thrust of what he has to say. Joe is making the same point that most people make privately in this country. It is quite simply a truism. The taxpayers of this country should not have to pay for a bet that went wrong for the people who lent to the Irish banks. The people who lent to the Irish banks were aware that there was an element of risk involved. They were paid a premium for that risk. They also would have done due diligence and they would have had a vague idea what the house of cards that was the Irish banks was based on. So essentially they took a punt on a property-based set up and they lost. And now we the people who had nothing to do with any of this, and would have seen none of the profits if it all went right, are being asked to repay other people's gambling debts at interest rates that are quite simply impossible given our projected growth rates, even if you take optimistic projections.
Where one might differ from the stance of Joe and his people on the left is to suggest that this is the forces of capitalism screwing the common man. In fact, the reason that the Irish people have been saddled with these debts is because, in this case, capitalism was not allowed to work the way capitalism should work. Socialists used to say that how could we say socialism didn't work because it had never been tried properly.
In this case, we can't blame capitalism because, in fact, we didn't try capitalism properly. In a proper capitalist set-up, the bondholders would have lost their money.
It was, in fact, the introduction of a soupcon of socialism that led us to our current unpleasant situation. Essentially, the bad gambling debts of the bondholders were nationalised, as were some of the ailing banks.
We were given various reasons at various times as to why this had to be done. We were told it was because our economy would tank otherwise. But that happened anyway, and now we are facing decades of poverty. It's hard to imagine how it could be worse if we hadn't bailed out the bondholders. We were told we needed a functioning banking system so that credit could flow. Credit is not flowing. We were told no one would ever lend to us again if we reneged on the bank debt that wasn't ours. But then no one wanted to lend to us anyway. So in short, we didn't really get anything out of socialising bondholder debt except diminished pay packets this month and more of that to come for years.
So the funny thing about the whole Higgins/Barroso moment is that what Joe Higgins was advocating, what got Barroso's goat so much, was capitalism. You could speculate for hours on why the notion of capitalism upset Barroso so much. Is it because he used to be a Maoist? Is it because capitalism implies right-wing implies less government, and Barroso is part of the biggest government ever to afflict the modern world?
But even funnier is why socialist firebrand Joe Higgins seems to be the major advocate for capitalism in this country. He's not the only one of course. Sinn Fein is also shouting very loudly about the fact that we should not be nationalising private sector debt. The strange thing about it is that none of the rest of the political parties -- the alleged right of centre parties -- seem to be talking too loudly about it. Fine Gael and Labour have made noises about it, but have yet to take the bull by the horns the way Higgins did. And Fianna Fail? Well, they're the guys who went along with it all so it's awkward for them.
If Fianna Fail, Fine Gael and Labour allow Joe Higgins and Sinn Fein go into this election as the only ones sticking it to the Eurocrats and the banks, they will be making a huge mistake.
As the slow car crash that is Fianna Fail tearing itself apart continues daily, there is a very real danger that the opposition will be led by Sinn Fein and a rump of random lefties. The anticipated new government -- a Fine Gael and Labour coalition -- is likely to have a fairly healthy majority. There is also a grave danger they will not have a coherent programme for government, seeing as they don't agree on anything. There is also a danger of delinquency by one of the partners. Given all that, we will need a strong and credible opposition in the next Dail. Sinn Fein, as impressive as they have been in fits and starts recently, isn't it. People before Profit isn't it either, certainly judging by Richard Boyd Barrett's disappointing outing on The Frontline on Monday.
So, unless we want the loony left holding the balance of power or being the only real opposition to a potentially dysfunctional but powerful government, the rest of the candidates need to embrace capitalism. Those who do well in this election will be the people who cut through the waffle and present a plan to ensure that the only debt this country has to pay is the sovereign debt run up by this country, and not private debt run up by speculators who knew what they were letting themselves in for.
Indeed Fianna Fail under new management could possibly save their skins to some extent by adopting a policy of ending our enslavement to European banks. Not only could it save the country, it could save a few political careers as well.