Tuesday 21 January 2020

Only salvation is to leave the eurozone

If Ireland wants a better future they will have to take the initial pain and fight just like the heroes of 1916, writes Frederick Forsyth

Frederick Forsyth

'Must we but weep o'er days more blest? Must we but weep? Our fathers bled.'

Forgive me for starting an article with a quote from an English poet, though I hope we can agree George Byron was rather a good one. What he was mourning was what he saw as the steady degeneration into impotence of a land he had once respected and admired. His own. I suspect such thoughts cannot be a thousand miles from the minds of many Irish men and women as they contemplate 2012.

This week Germany and France will table proposals for massive changes in the relationship between the two nations, the effective masters of the eurozone now, and the other 15 members.

Ostensibly, the new powers will grant the right to enforce 'fiscal discipline' over the 17 group members. Behind the arras, the real power will lie with Paris and Berlin, operating through the European Central Bank in Frankfurt, pretending to be Brussels. That is why the power-demanding clique calls itself Groupe de Francfort.

But that is just the window-dressing. What Franco-Germany is actually saying is: 'You small fry have damn near bankrupted the lot of us. This can never be allowed to happen again.'

Unsaid is the real message: 'So in future your economies will all be governed by a central Ministry of France.' Also unsaid is: 'and behind that Ministry we shall be standing calling the shots.' And yes, my friends, it is a coup d'etat by another name -- for if you control the economy you control the country.

Since we are in a quoting mood, let me go back before Byron to 1776. In that year the American colonists rose against George III with a simple slogan: 'No taxation without representation' -- it was a great maxim then and it still is. For the new EU Finance Ministry (no matter what they call it) will have to govern the national debts, budgets and taxes of the member states. And your effective representation will be zero.

Is there really no alternative? That is what you will be told by Enda Kenny and his cabinet. And it is not true. Let us turn our attention to Iceland.

Today Dublin is calling across the water to Brussels, Frankfurt and Berlin: 'Look, see how obedient we are being. We are taking all the impositions you have placed upon us for our foolishness during 2001-2009. We are not rioting. We are not Greece.'

But two years ago the cry was: 'We are not Iceland.' Back then Iceland was deemed ruined and ruined forever. This tiny country with nothing but tourism and cod had crazily decided it was a natural banking genius. In a few years its three investment banks had sucked in billions from abroad, gambled the lot and lost the lot. Iceland, said the sages of the eurozone, was finished. Well, Iceland is coming back; nay, Iceland is roaring back. First, its gutsy president Ragnar Grimsson refused to accept permanent ruin and called a referendum -- one of his few powers. The people massively backed him and fired the capitulationist government. They then let the guilty banks go bankrupt.

They guaranteed the life savings of Icelandic depositors but that was all. The three casino banks folded and their foreign 'investors' or 'bondholders', meaning gamblers, took their losses. And why not? It was only greed that led them to rogues offering impossible returns. I mean, if you can't gamble and lose don't go to the Curragh.

Finally, Iceland set up new, honest, prudent banks in the same buildings, exiled the conmen and got to work. This year (one month to go) Iceland's growth of GDP is 2.3 per cent. Advanced Economies: 2.2 per cent. Britain's? About 0.8 per cent. Ireland's? Get out the magnifying glass.

Iceland's great advantage was that, though they had gone crazy during the world boom, and admitted it, they never gave up the krona. So they could let it float, meaning sink, until it found its natural level and then trigger an export-led recovery. And Iceland has far less to export than Ireland.

And they had one other advantage. They simply decided that in Reykjavik, Icelanders come first, casino bankers, native and foreign, second. In Dublin, it is the other way round. For Ireland now, as the noose of thraldom from abroad tightens, the only salvation is to go the Iceland road. Leave the eurozone; re-establish the Irish money.

Could it be done? The bedwetters will deny it, but they are wrong. It could be done. It would hurt like hell, but no worse than it is hurting now and for a much shorter time. It would be necessary to print enough punt notes and fill the ATM machines over one long weekend. Pitching the punt and the euro at one-for-one would make life easier. The punt would start to devalue, but Irish citizens and probable residents would still get one-for-one. When the punt came to rest, imports would speedily be cut but exports increased, earning large sums of foreign exchange to pay off the valid foreign debt.

Yes, it could work, even in the face of the rage of Paris, Berlin and Brussels. Any idea of handouts or bailouts from Frankfurt would end, but Ireland would not be left entirely alone. The Brits would stand by her. It's part pragmatic, part emotional. We don't want a bankrupt Ireland either; we trade too much. An Ireland that can one day trade with us again suits us much better.

If the Irish want to go that road, they will have to fight for it. They will have to fight again, through the courts, for another referendum, triggered by the sweeping treaty changes that will be required. And they will be fighting their own political establishment when they vote NO to subjection to Frankfurt.

So let me offer a third quote and even further back. In 1555 Bishop Hugh Latimer was being burned at the stake in Broad Street, Oxford. He was a Protestant, you see -- not a wise thing to be in the time of Mary Tudor. As he died, he called across to Bishop Ridley on another pyre: 'Be of good comfort Master Ridley, and play the man. We shall this day light such a candle by God's grace in England as shall never be put out.'

At Easter 1916 Padraig Pearse and his companions entered the GPO and took it over. It was a clear insurrection against King George V in a time of war.

He must have known that he could not win against the Empire, but he did it anyway. Pearse died before the rifles at Kilmainham Gaol, but before he went he lit his candle. And it has burned these past 95 years.

What a pity to see it now being extinguished by fellow countrymen with less guts than him.

Frederick Forsyth is the author of a number of best-selling novels, including 'The Day of the Jackal'

Sunday Independent

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