Monday 18 February 2019

Gene Kerrigan: We have power to fight EU stitch-up

Our leaders need to throw a political hand grenade into cosy club at the heart of Europe, says Gene Kerrigan

Look at them -- in their time of crisis, our political leaders. Squabbling about the leadership of Fianna Fail, like hungry people fighting over a torn and empty Mars bar wrapper. Never in the field of human endeavour have so few political hacks displayed any relevance whatsoever to so many.

Yet, they continue to dominate the headlines. Two years after they should have buggered off in a haze of shame and remorse, they cling to power -- insisting that they want to "do the right thing for the sake of the country".

Hey, folks, do us a favour -- don't do us any more favours.

This would be bad enough at any time. But, right now, we're under attack. From enemies who know precisely what they're doing. Things are happening that could make our position very much worse -- and very, very quickly. And we're supposed to care about which political lightweight takes over the shell of Fianna Fail? We're supposed to parse every contradictory sentence coming out of Brian Cowen's pathetic face to establish the precise extent to which he fraternised with a desperate, failing banker?

Things are so bad that last week I caught myself feeling sorry for Sean FitzPatrick, the arrogant, greedy little gobshite. The politicians who used to fawn over the banker are now treating him like he's some kind of flesh-eating virus. "Seanie? Never heard of the guy. Golf? Well, yeah, but it's not like I carried his clubs, ya know. Well, just for a while, maybe, between the third green and the fourth tee, when he needed a rest."

The media that used to flatter him now portrays Seanie as 'The Man Who Brought Down the Country'. Not that it matters much anymore, but FitzPatrick didn't "bring down the country". He brought down a bank. And other idiot bankers, eager to follow his example, destroyed their own banks.

It was the politicians, faced with that problem -- imprisoned in their own redundant ideology and making one disastrous decision after another -- who brought down the country.

Tom Lyons and Brian Carey have done fine work in The FitzPatrick Tapes, using FitzPatrick's own words to display the shabby reality of the banker, his cronies and their political servants. But Seanie is already history.

Right now, the euro may collapse, the existence of the EU in its current form is questionable, and -- almost incidentally -- the solvency of this country is at stake. Except as an historical curiosity, Seanie is as irrelevant as Cowen.

We are where we are. Where's that?

In last week's New York Times, US economist Paul Krugman wrote: "In the late 1990s, Germany's economy was depressed as a result of low demand from domestic consumers. But it recovered in the decade that followed, thanks to an export boom driven by its European neighbours' spending sprees."

Politicians here and across the EU encouraged the credit bubble by creating artificially low interest rates -- and they treating varied European economies as though they were monolithic. Their idiot developer friends eagerly joined in. The bankers reaped huge rewards.

Krugman: "When the bubble burst, the solvency of Irish banks was immediately suspect. In an attempt to avert a massive run on the financial system, Ireland's government guaranteed all bank debts -- saddling the government itself with those debts, bringing its own solvency into question."

Politicians here attempted to divert attention by setting private and public sector at each other's throats. Squalidly, they now claim the crisis arose from the moral failings of the citizens ("we all partied"). Anything to deny reality -- which is: The vast sums borrowed globally by gamblers during the credit bubble greatly exceed the true underlying value of the assets on which the lending was based. There simply isn't enough wealth in the world to pay back all the loans these idiots guaranteed to each other.

Merkel and Sarkozy are bailing out their countries' banks by running the money through the Irish banking system, disguised as a "bailout" of this country. They borrow this money from the financial markets at about three per cent interest. And then, with the cooperation of Irish politicians, force Irish citizens to pay almost six per cent interest on that same money. (€5bn of this 'loan' was run through Irish banks last week. We're stuck with the crippling bill.)

Last week, UK economist Philippe Legrain wrote: "So far, EU governments have decided that bank bondholders must be protected at all costs, preferring to impose losses on taxpayers instead -- even if this stretches governments' solvency to breaking point. This is explicit in Ireland, much less so elsewhere. Because voters' tolerance for bank bailouts has worn thin, governments are acting covertly: lending huge sums to Greece and now Ireland so that they can repay German, French and UK banks in full."

Legrain concluded: "This strategy is not just unfair, costly and dangerous; it is ineffective."

Instead of facing up to a Europe-wide disaster that requires a radical response, politicians are imposing knee-jerk budget cuts that have made things worse. US economist Barry Eichengreen wrote last week: "If the crisis countries fail to meet their budgetary targets, EU leaders insist, then they should impose deeper spending cuts -- this despite the fact that deeper cuts will mean even slower growth."

David McWilliams summed up the core issue last week: "What is going on at the moment" he wrote in the Irish Independent, is "a titanic struggle between the interests of the citizens of Europe and the interests of the finance industry in Europe."

In this battle, the politicians are not on our side. We're under attack from EU leaders with dodgy politics and bungling answers to the crisis. We are also under persistent attack from idiot Irish bankers. Last week, the Oireachtas heard of the 2009 episode in which figures the bankers gave to Nama misstated the true position by €20bn, and this was only caught by careful examination of the books.

The Irish banks have a known history of criminality stretching back to the tax frauds of the Eighties. They have been the enemy within. Bankers act in the interests of banks. Full stop. Any politician genuinely representing the citizens has to treat bankers as suspects, until their bona fides are established.

And any politician claiming to represent the interests of the citizens needs to throw a political hand grenade into the cosy club at the heart of the EU -- we are not powerless, but our politicians have been gutless.

The world is changing fast, vast issues are at stake. Instead of protecting ourselves, we're bobbing about on the tide of events, rudderless, not so much a country as a discarded cork from a property developer's bottle of champagne.

It would be great to say that there's an alternative government poised to take over. Instead, we hear the same answers, from marginally different voices. When the new government comes into office we need from the start to treat them as though they're probationers, on borrowed time. Behind the rhetoric about how much they care about us, we need to watch who they serve. Do they serve the citizens, or the same old shower: the bankers, the moneymen and the EU powers to whom they traditionally defer.

Sunday Independent

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