| 5.7°C Dublin

The Croke Park agreement has worked fine for one side, but it has still to produce anything for our side

IT HAS become commonplace now for Irish people to stop whatever they are doing, and look at each other, and say, "How did it happen? How did we fall so far, so quickly? How did we go from that to this so quickly?" And just look at each other, bewildered, and shake their heads.

The standard wisdom is that we all went mad and then the world collapsed around us. And while we blame international factors, vaguely mentioning sub-prime and the collapse of Lehmann's and something called the credit crunch, we largely blame ourselves, because we are encouraged to blame ourselves.

It is a classic narrative that appeals to the Catholic in us all: pride followed a fall. We got some money and we weren't used to dealing with it so we went bananas. We got greedy and now we are just getting what we deserved. We flew too close to the sun.

We sometimes blame our politicians, with vague statements like, "Fianna Fail ruined the country," but luckily for them we are so naturally guilt-ridden that we haven't actually blamed them quite as much as they deserve. How else does one explain that Brian Cowen was allowed to shuffle off the political stage with what felt strangely like a modicum of sympathy? How else to explain that Micheal Martin is being allowed to go around acting as if he is some newbie to the political scene, full of revolutionary ideas about how we could change this corrupt country and its corrupt politics, a man who is passionate about moving on from the lazy consensus that he had to watch ruling the country for the past decade or more?

Martin has done nothing criminal, but you'd have to say that there are countries where he and all his colleagues would be in jail or perhaps decapitated. I'm not saying that's right. I'm just saying that in Ireland we've gone fairly easy on the people who ruined this country. And Martin, in fairness, probably wasn't the worst of them.

Brian Cowen probably is one of the worst of them. Cowen's non-management and mismanagement would probably be classed as criminal negligence if he caused as much pain and suffering in the private sector.

Think back, for example, to when Cowen was Minister for Finance in 2006. Michael McDowell suggested that it was wrong that the Government was taking up to €3bn in stamp duty from people every year, while young people in

apartments were being prevented from buying homes in which they could rear a family by having to pay crippling taxes in order to move house.

At this point, the Government was making an average of €100,000 on every new house built in Ireland. Of every new house built, 30 per cent of the price paid went straight to the Government. At that time home-owners were also enduring a run of eight or so consecutive interest rate increases that had started in December the previous year.

But Cowen rejected McDowell's calls out of hand. Cowen's argument at that time was that, on one hand it was not his job to interfere with the operation of the property market, and on the other hand it was desirable for the property market to cool off. At this point Cowen -- like many others, it should be said -- was adamantly forecasting a soft landing for property, so he saw no need to intervene. The best advice he was getting was suggesting a soft landing. How was he to know that deliberately cooling the property market towards a collapse was going to send this country into a vortex from which we will never escape?

The property collapse, that Cowen refused, through whatever bullheadedness or bad advice, to do anything about, would ultimately tear down a huge sector of the economy with it, would start the first wave of mass unemployment in this crisis, and would eventually drag down the banks and all of us with them. As the late Alan Ruddock would put it subsequently, Cowen thought he could quarantine the downturn in the construction sector. But of course he couldn't. The construction sector would take it with it the retail and banking sectors, consumer confidence. Ultimately it would destroy the domestic economy.

In the meantime, Cowen, despite being so adamant about not interfering in the property market, continued with the tax breaks that encouraged developers to continue building ghost estates and ghost apartment blocks. You have to wonder if the man knew what he was at at all.

Fast-forward two years to September 2008. The soft landing hasn't happened, the property market that Cowen refused to get involved with (on the demand side at least) has caused mayhem and Cowen is now Taoiseach, having been anointed in May by a salivating media. But the cleverest and most honourable of them all hasn't done much since taking office. The country has gone into a state of torpor matched only by the Government's torpor.

That summer, the Government had taken its customary long holiday despite the fact that the country was clearly falling to pieces around us. It continued to refuse to do anything about curbing out-of- control public spending, and indeed it was still inclined, incredibly, to dismiss people who tried to warn it about the recession that had now definitively come as, "talking down the economy". On one occasion in advance of the night of the infamous bank guarantee, our Minister for Finance had been uncontactable by Jean Claude Trichet because he was at functions and at the races.

And then, on 29 September, this State made the extraordinary decision to offer an unlimited guarantee to all depositors and creditors of the Irish banks. This decision was taken late on a Monday night for fear of what would happen when the banks and the markets opened in the morning. Thus it was taken by a handful of people, on the orders of the ECB and not only without consultation with the Dail, but without consultation with the Cabinet, most of whom were presented with a fait accompli on Tuesday.

The guarantee was the next landmark decision that would drag us into the vortex, into the infinite black hole we now face. It was also the decision that would lead us to the next pivotal moment in the ruining of the country -- the bailout.

By the time of the bailout, it was widely accepted that our Government no longer represented the Irish people as such, but was more interested in appeasing our euro overlords. Our national sovereignty was already considered a thing of the past, and our Taoiseach was widely regarded as being drunk and punch-drunk from a situation he didn't really understand.

His coalition partner, John Gormley -- who seems to be approaching this election in a very honest and straightforward fashion in ways -- said during an excellent Ireland am grilling on Friday morning that he believes that Cowen, like many in Fianna Fail, was in denial at the time of the bailout, hoping against hope it wasn't true. Most people felt at that point that Cowen had had his head in the sand for quite some time. He and his government had entered a state of deeper paralysis by now and were still refusing to get to grips with the country's insane spending.

They were also refusing to do anything to stimulate our collapsing economy, apparently believing that deflating the economy further (to increase our competitiveness) was the best way to deal with what was a demand-led recession. (Stimulus was a bad word unless you were the car industry, which got a stimulus and is now the only booming industry in the country.) The policy was roughly one of collapsing the local domestic economy where the vast majority of Irish people work, so that we would at some point in the future get more exports, though we were warned that export growth would initially be jobless.

Against this background, again over a weekend, again for fear of the markets, our Government was bounced into a bailout that was in fact a sub-prime mortgage. More debt to pour on debt, and at extortionate rates that we could never afford to pay.

Very quickly we realised that all the alleged negotiations that had been going on with Europe and the IMF were actually not negotiations. Unless you count Europe telling us what to do to save European banks, and us meekly complying, as negotiations. We sent representatives who negotiated in a week and compromising manner, with disastrous consequences. Again, neither the Dail nor the cabinet were consulted, and again we were all presented with a fait accompli.

Allegedly a rescue package, the bailout was in fact a bizarre set-up whereby we would lend ourselves money to pay off European banks, and Europe would lend us more money to do much the same and to keep running our enormous deficit that the Government had refused to do anything about for the previous three years -- stalling first by saying that the McCarthy report would have all the answers, then binning that, then coming up with something called the Croke Park Agreement, which has worked fine for one side but has still to produce anything for our side.

You were beginning to get the impression that these guys were not good at doing deals. We had walked into the bailout talks with Europe concerned that we would bring the whole house down with us, and we had walked out with a worse deal than we'd have got from a moneylender. It was also a deal, as we are learning now, that it would be very difficult to get out of.

There's no doubt that all the other factors you hear mentioned played their part in the shocking downfall of this country, from one of the world's richest to one that is bankrupt and with no prospects. But there is no doubt that if we had been governed at all during the last four years, if action had been taken earlier, and if our leaders had represented our interests instead of those of Europe, that we would not be in the situation we are in now.

Right now we are in a situation that everyone believes is impossible. When the collapse of the eurozone is seen as our best bet, then things are indeed grim. No one believes we can get out of this hole we are in.

If you did it to your family, your wife would probably kick you out. If you did it to a company -- not that you would be allowed to -- you would never work again, and would almost certainly be sued for negligence, possibly fraud. If you do it to a country, apparently you shuffle off muttering about your family and you leave that nice Micheal Martin to take over and deny that any of it ever happened.

Sunday Independent