Sunday 16 June 2019

We need leaders who will ignore the eurobabble and just say no

The only things that will save us now are sheer bloody-mindedness -- and a new currency, the punto, writes Aengus Fanning

IF THERE'S anything worse than having to look after your own affairs, it's not being allowed to look after them.

We have made a dog's dinner of managing our economy. It is a story of staggering incompetence that reached its peak on that fateful night in September 2008 when we gave an open guarantee to the banks.

I don't believe that, even at that disastrous hour, as we perpetrated the biggest blunder in our economic history, we were doing anything other than the bidding of the Frankfurt-Brussels axis.

Now the dogs in the street know we're being told what to do by that dogmatic trio of Trichet, Rehn and Barosso, with their German paymasters discernible in the background.

When Trichet says that we will be looked after, what he really means is that we will be allowed to live in today's equivalent of the frugal comfort of a Dickensian boarding school, and we should be grateful to them for that, because we brought it on ourselves. Surely that kind of thinking went out with Oliver Twist.

Their policy for our redemption is as plain as a Frankfurt sausage. They tell us that exports will be our salvation, as has been the case with Germany. But because we are tied to the dogma of the euro, we have no way of regaining lost competitiveness except through a brutal deflation of our domestic economy.

Property has been allowed to collapse, jobs to be lost, businesses to be closed and consumer confidence to be demolished in pursuit of this Holy Grail of competitiveness.

It is a bitter reflection that the infinite black hole yawning under the banks is a direct consequence of the demolition of property values, which, when it began in 2006, was hailed as a "necessary correction", the harbinger of a soft landing.

What we need now is unapologetic heresy, the licence to print money, a bit of inflation, a bit of depreciation, and a little bit of room for manoeuvre to enable our exports to continue to grow, but without the terrible price of crucifying the domestic economy.

Instead, we are trussed up in a Teutonic straitjacket on the altar of monetarist dogma, and if you challenge this, the experts will tell you peremptorily that you know nothing.

Well, there's a lot more wisdom in knowledge of people than all the economic dogma in the world. As Harold MacMillan lamented, "I knew books before I knew people". The Irish are not Germans, and we never will be. We are not better, nor worse, simply different.

Common sense tells us that the 17-nation eurozone cannot hold indefinitely. It is only a matter of time before there is a second-tier currency, let's call it the 'punto', for Ireland, Greece, Portugal, Spain, Italy and a few others. Let us not delude ourselves -- it would suit us fine.

It is my understanding that on the catastrophic night of the bank guarantee, most of the Cabinet were informed of the fait accompli by telephone at around 1am that morning.

One minister asked why was there such a rush -- particularly as there was a Cabinet meting scheduled for later that same morning. He was told that it had to be done before the markets opened. Whose tune were they dancing to?

It was indeed a sombre anthem that will leave us debt-ridden for years to come, with a spartan, static or declining economy. A grey curtain of debt is drawing down at a time when the world is recovering and a small, trading economy such as ours should be looking forward to a rainbow future.

That colossal mistake was approved neither by the full Cabinet, the Oireachtas, nor indeed by the people themselves, so what real standing has it?

We have an annual income of €30bn, through taxes, and we have debts many times that because of the bank guarantee and the yearly public spending over-run of nearly €20bn. We are told that everything depends on growth, but it doesn't take Maynard Keynes to see that there will be no growth in the domestic economy as long as anything between €6bn and €11bn is taken out every year in interest rates, truly dead money that might as well be burned at the crossroads.

Already, there are signs that our new leaders are being overwhelmed by the daunting mountain of debt and the intimidating arrogance of the Frankfurt-Brussels technocracy. One longs for a leader with the independence of thought and the sheer bloody-mindedness of a Donogh O'Malley.

When faced with a phalanx of technocrats, O'Malley would say: "I don't understand this, and I don't bloody well want to, but I know what I want done. Let's do it."

In my (no doubt ignorant) opinion, we should be threatening to kick the table over and leave the eurozone while remaining in the EU, joining Britain in an Atlantic alliance that will still have the clout to maintain access to the single market.

There's no hope of that happening -- we're too inherently Anglophobic for that. It is 38 years since I listened to government officials in Brussels telling me that our future lay with the deutschmark, and that our curse was the link with sterling.

It is surely strange that, after all these years, the perfidious Brits are still our biggest trading partners.

Sunday Independent

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