Monday 23 September 2019

Merkel's revenge was our total humiliation

Her response to Ireland's 'hardball' showed ours to be a puppet government -- and guess who pulls the strings, says Jody Corcoran

Jody Corcoran

Jody Corcoran

It was a most revealing week in an age of revelation. Let us join the dots. After the coup d'etat in Rome, Mario Monti, the unelected new prime minister of Italy, a former two-term EU commissioner, appointed his Cabinet.

An academic, he named seven others of his ilk, as well as figures from the world of business, the diplomatic corps and -- a little spooky, this -- the armed forces; but nobody from politics.

His appointments were to be welcomed by the Euro elite; bankers, bureaucrats and policy wonks, who fumble still for a solution to a problem of which they are an essential part.

The repercussions are most serious. If an elected government can be overthrown to be replaced by a technocratic tool of the unelected, who is to say what may happen in the future?

Only the likely new leader of Spain, the centre-rightist Mariano Rajoy, sounded an alarm. Good politicians, he said, not technocrats, were the ones "who have done great things in the course of history".

It begs the question: where have all the good politicians gone?

In Dublin, a minister at Cabinet resigned in protest last week at a government decision to close a building in his constituency. He walked away, hero to his supporters, a lump-sum payment of €30,000 in his pocket -- for just nine months' work.

He joined another politician of the Government, who had already resigned in protest at the closure of a section of another building in his constituency.

The decision to close the A&E unit in Roscommon will, at best, cause an inconvenience; at worst, result in death: inconvenience is one thing, loss of life another.

Nobody in these buildings will lose their job, however; which is to be welcomed. There are already 450,000 unemployed. They will, though, get to walk away with a plum pension and lump sum payment, if they want.

The public sector protects itself. Last week we learned that one among them, a fat cat, is to walk away on €114,000 a year and a €204,000 lump-sum payment. She is just 53. Like everybody in the public sector, she had benefited from a pay-off wheeze called "benchmarking", designed by themselves, and bankrolled by the proceeds of a property boom.

The boom has long since burst, taking with it the banks that had so ruthlessly profiteered on the excesses of another age, credit borrowed from Europe and splurged on houses and apartments, several of them thrown up by cowboy builders who should be horsewhipped. In the rubble of the crash, they left behind a bill of €100bn, and rising, which, on the diktat of the European Central Bank, must be picked up by the taxpayer here.

For those in the private sector, the fallout has been even more catastrophic: hundreds of thousands are not only out of pocket, but also out of work and mostly out of hope.

The politicians who resigned, Willie Penrose and Denis Naughten, have shown themselves to be, first and foremost, concerned for the seats they hold in Leinster House. But they are not without honour. Promises were made and promises were broken.

In Athens on Friday, after another coup d'etat, the unelected Prime Minister, Lucas Papademos, a former vice-president of the ECB, was sworn in, his Cabinet also stuffed with the unelected.

Earlier last week, the power workers' union in Greece blacked out the central heath ministry building in the capital for four hours: a response to the buzzword of the age, "austerity" -- namely, a new property tax imposed on households though their electricity bills.

In Germany, meanwhile, the chancellor, who was ultimately behind the coups d'etat, prepared to welcome the man who had made and has now broken all of those promises.

After 253 days in office, not power, the Taoiseach, elected on a wave of resentment against his predecessor, ventured abroad for the first time to meet, one-on-one, a eurozone head of state.

In anticipation of his arrival, Der Spiegel, reported: "The Irish aren't throwing incendiary devices." It is true. Unlike the Greeks, who can black out power, the Irish are not throwing anything, not even a shape; the people most likely to throw something -- those in the public sector -- have been bought off.

Brian Cowen, the predecessor, bought them off with another wheeze they designed for themselves, the Croke Park Agreement. Under that agreement, voila, they get to retire on a comfortable pension and handsome pay-off.

Last week, we had confirmed what we always knew to be true: that the agreement is no more than lipstick on a pig.

A fanfare publication claimed "reform" would save €2.5bn by 2015; but the headline figure, stretching over seven years, does not include the cost of the pay-offs and the pensions. The saving will be closer to a billion.

Never mind; Tanaiste Eamon Gilmore knows best. The public sector, he said, was being "ballyragged" by the media, the same public sector that had put him in office, not power, before he, too, will get to retire with pension and pay-off. Cowen had presided over the most shambolic government in the history of the State; on his watch, this time last year, national sovereignty was lost, surrendered upon a forced arrival of the EU-ECB-IMF troika.

In Berlin, the red carpet was rolled out for his successor. It was surreal. In the shadow of the chancellery, Enda Kenny stood erect for Amhran na bhFiann, a tri-colour flapping in the breeze where there should have been a white standard.

Kenny seemed as though he wanted to look the part. He did look the part. But he was there to help Chancellor Angela Merkel make her point: austerity works.

Back home, we know that austerity has failed. Kenny came to office, not power, on a five-point promise of jobs, jobs and more jobs. He promised a Jobs Budget; we got a Jobs Initiative.

The initiative amounted to nothing short of theft. Last week we learned that €470m, so far, has been stolen from the pension pots of the mostly private sector, ostensibly, to fund the provision of these makey-uppy jobs.

It was another broken promise, however: no impression has been made on the dole queues.

Der Speigel also reported that Ireland was "quietly taking the pain", that Ireland was "practising self-denial"; that the Irish, "have accepted their fate". Accepted their fate, no less.

To his credit, Kenny sought to play the only card he had left; it turned out to be a joker.

The chancellor demanded his support for treaty changes to protect her taxpayers from overspending economies in the eurozone.

As can be his wont, Kenny did not handle it well, but made a valid point. His taxpayers were bailing out her banks, after all. In return, he sought from her a gesture that the shackles of austerity would be loosened somewhat. He was rebuffed, of course. Without a hint of irony, his officials then spun it thus: Ireland would play "hardball".

Merkel, too, is playing to her voters. She is a politician.

In Germany, they remember a tale from the knee of their grandmothers to do with wheelbarrows full of worthless cash; it is where their pathological fear of inflation comes from. The ECB is based in Frankfurt. In effect, the central bank of the eurozone is underwritten by Germany. It administers monetary policy for the 17 member states, its primary objective to keep inflation low.

Kenny had hardly touched down back home when the Chancellor put him in his place.

Her response to Ireland's "hardball" proved to be a final wake-up call for the deluded many who thought our Government to be something other than what it really is: a puppet government.

Guess who pulls the strings?

Within hours, the details of a Budget three weeks hence were leaked by Germany; not only that, details of Budget 2013 were also thrown around by the Bundestag equivalent of an Oireachtas subcommittee. How humiliating. The last pretence at independence had been ripped away.

Merkel's revenge revealed, among other things, that the Government intends to deliver a hammer blow again to the private sector.

A week after the announcement that capital spending is to be slashed -- Metro North gone, another promise broken -- that may have given out-of-work brickies an even break; days after employers were told to expect to pay the sick leave of their staff, it emerged that VAT is to be hiked again. With trepidation, the retail industry, already on its knees, awaits another devastating Christmas; in the North, they rub their hands in glee. The dole queues will jump in January.

Nobody, by the way, dared to mention the massive level of sick leave and absenteeism in the public sector.

With a grim inevitability, meanwhile, the turmoil in the eurozone spread last week from the periphery to its "core". In Italy, as Mario Monti readied his economic plan, investors shrugged and looked to France, the Netherlands and Austria, even Finland, the countries that had helped turn the screw on Ireland this time last year.

For us, there may be a short-lived schadenfreude, but we should be fearful. The markets wonder if the ECB might yet ride to the rescue. Not if Merkel has her way. Which she will. Spain will topple soon, but France could be next to go. The euro may have but weeks to live.

Sunday Independent

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