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Gene Kerrigan: Let's get this horror show on the road

It's time to invade Europe. Last week, the EU goons -- led by Lorenzo Bini Smaghi and Jürgen Stark -- became more strident and openly contemptuous in their bullying. Our timid Taoiseach didn't dare reply. His cabinet members kept their heads down, seeking softer targets.

Striking back at the EU tough guys won't solve our problems, but ignoring what's happening will certainly make things worse. We are governed by an EU/IMF/Fine Gael/Labour coalition. The first two parties to this government are the senior partners. They're primarily concerned with the health of the euro, as well as protecting the private German and French banks -- who recklessly lent billions to the likes of Sean FitzPatrick and the geniuses at AIB and Bank of Ireland.

For three years, Fianna Fail policy was based on restoring the Irish banks to their "former greatness", as Brian Lenihan put it. This virtually bankrupted the country. We now have an EU/IMF-led government, fixated on protecting German and French banks. The real economy, and the lives of the army of unemployed, the fleeing emigrants, the cystic fibrosis patients, the special needs kids, the low- and medium-income families -- they can go hang. Our leaders have other priorities.

Hold on -- say the appeasers. You can't blame outsiders -- the blame lies within Ireland. That's if you see this as purely an Irish problem, isolated from the rest of Europe. In truth, we're bit players in a wider debacle -- a gigantic interwoven debt problem that stretches across the continent, and which won't be solved by any of the old kneejerk responses.

The spotlight last week was on the 'troika', who had the humdrum job of checking the state accounts. Meanwhile, policy was being restated at the European Central Bank in Frankfurt. Bini Smaghi brusquely dismissed those who say that unpaid debts of reckless Irish private bankers are between those bankers and the reckless German and French private bankers from whom they borrowed.

Not only is the money extracted from us, but the notion that the private German banks should pay any of their gambling losses is tersely rejected. Bini Smaghi's logic is bizarre. Irish citizens vote; their government made a mess of regulation -- so the citizens must take on untold billions in private debt. "They should not complain," he said last week, they should "accept the consequences".

And the ECB's Jürgen Stark "bristles", according to the Irish Independent, when it interviewed him last week, at criticism of what's happening.

Now, who are these tough guys? Bini Smaghi is on the ECB board since 2005. Stark was head of the German Central Bank until he joined the ECB board in 2006. Their boss, Jean Claude Trichet, was head of the French Central Bank until 2003, at which point he got the ECB job. In short, these gents had top regulatory roles while the German and French banks were recklessly lending to the reckless Irish banks.

In these brutal times, we need politicians with hard shins and steel toecaps. We've got Enda and Eamon -- Winnie the Pooh and Tigger too. With another spineless Government in place, how do we answer the attacks of the EU/ECB tough guys?

How about we go to their base, throw a little light on what they've been up to? They need muscular rebuttal, and a dose of what really frightens them -- harsh daylight and democratic demands on their home ground.

To Winnie and Tigger, politics is about backroom deals. You give a little, take a little, smooch your buddies. Listen to Michael Noonan: "I'm building up relationships and, as relationships build up, a better understanding emerges." He "had a chat" here, he says, and he "had a chat" there. Michael, the political mastermind, a kind of diplomatic ninja, silently stalking his prey.

Has anyone looked up this guy's history as a minister? As leader of Fine Gael? Sorry to bring that up, Michael, but we're in deep trouble, and we haven't time for old men's fantasies about quiet chats in plush corridors.

In such a major economic upheaval, only a radical response can hope to be adequate. The establishment sought instead to preserve the structural inequalities, while demanding sacrifices from those on low and middle incomes. Bullied by Brussels, our leaders seek easy options. Fianna Fail cut the minimum wage -- a pathetic, economically damaging move. The minimum wage is partly about preventing exploitation -- but it's also about preserving aggregate demand. (What suits individual employers is not in the collective interest of all businesses, which need an active consumer base.)

Lenihan did it anyway. Now, Winnie and Tigger are reversing that -- but they propose instead to cut the wages and conditions of 240,000 low- and middle-income workers, by removing legislative protection. Cue consumer slump and consequent job losses in retail. We were voting for "change", we were told. There would be a new approach. Not one more cent for the banks, "burn" the bondholders, make them pay their own debts -- and we got Fianna Fail Lite.

How much do you know about what's happening in Portugal? Well, German and French people know even less about what's happening here. They think they're bailing us out. They think we're spending their taxes. And that we're complaining about it.

They don't know that the ECB borrows money at about three per cent interest, and lends it to us at about six per cent. From the very beginning, it was obvious that this was a punitive, extortionate exercise. Taking it down a notch or two was never the point -- the point was the gratuitous oppression by bureaucrats of an economy already struggling.

German and French people don't know that we're forbidden by the ECB to pass on the cost of all this to the bondholders who recklessly lent the money to the Irish banks -- while regulators such as Trichet, Stark and Bini Smaghi stood idly by.

They think we're a charity case being "bailed out". They don't know the dead Irish banks are being kept on life support with EU money, so that the citizens can be bled for bank debts.

The Government is spineless, Fianna Fail is discredited. Whenever Sinn Fein says a word about banking their opponents mention the Northern Bank robbery and burst out laughing. That leaves the Independents. The real opposition. Had they a mind to do the Government's job for it, the invasion of Europe could take the form of a low-budget roadshow, with public meetings across Germany, and perhaps France. Suggested topic: 'Why are Irish Citizens Bailing Out German Bankers?' There are surely enough unemployed German speakers here who could go along, to translate. Joxer goes to Stuttgart, with knobs on.

The last thing the EU/ECB tough guys want is open discussion among EU citizens about how private bank debt has become public sovereign debt. They prefer it to be seen as a matter of feckless Greeks and wild Irish partygoers. And God forbid anyone raises questions about the mess that's been made of the Euro project -- about the ECB's regulatory failures and its role in imposing private debt on EU citizens. Or about the politburo-style of the EU, with decorative MEPs and an institutional aversion to democracy.

It's called politics. Open, democratic, cleansing. Of course, we could leave it to Michael the Political Ninja to have private chats in plush corridors.

Sunday Independent