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Where Berlin leads, Kenny's henchmen follow


Enda Kenny

Enda Kenny

Enda Kenny

What do little Greece and big France have in common?

Wine? Sun? Sea? Sand?

No, the odd couple of Europe have something more shameful to unite them: both sovereign nations are serial offenders of European rules.

And what are the consequences of their breaches for the two rogue nations? Well, justice European-style is a bit perverse. The little Greeks are punished viciously. The big French are rewarded handsomely.

Every sinner in Europe knows that the Greeks have stampeded through European rules in recent years. The Greek people have suffered heavily as a result. But the untold story of Europe is the cavalier way that mighty France has flaunted European regulations. The French are fiscal outlaws, indulged because they have friends in Berlin.

France has acted the rogue with impunity. They have breached the European Community's deficit rules in 14 out of the last 19 years. They have consistently given two fingers to their European partners and the Commission. Europe has either looked the other way or offered a little token resistance - followed by a complete cave-in.

France has been granted permission to breach the deficit rules three times since 2009. Last week they sought further indulgence from their patient European colleagues. France was granted yet another extension, given two more years - until 2017 - to bring the deficit down to the required levels (3pc of GDP). In return, they promised to bring in structural reforms, a pledge that no one believes.

The finance ministers' vote in France's favour was unanimous. Predictably enough, European Commission president Jean-Claude Juncker sided with France following a bit of a discussion.

More surprising was Ireland's vote. Irish Minister for Finance Michael Noonan sided with the French. Ireland apparently believes that wayward France deserve another chance. And to hell with the wild Greeks.

Noonan's was a strange stance for Ireland, a nation that has received no help from France in its recent plight. It is particularly inconsistent from a small nation that emerged as a merciless super-hawk in the Greek tragedy. The little island in the Atlantic that took the high moral ground against Greek deficits two weeks ago is behaving like a sycophant when making a benign judgment on the deficit of the second-biggest economy on Europe. The consequences of a French default would be far more serious for Europe than a collapse in Greece, but that hardly matters to Michael.

The truth is that Ireland is sucking up to Germany. Where Berlin leads, Ireland follows. The Germans - hypocrites to the last deutschmark - have embraced France to their bosom. Ireland's Coalition now needs German help to win the next election. Michael Noonan is hoping to cash in a few IOUs from German finance minister Wolfgang Schauble in time for polling day.

Noonan went straight to Wolfgang after Ireland's shameless vote for French fiscal profligacy. According to himself he told the hardline, but often surprisingly pragmatic, German that he would be looking for fiscal "flexibility" in Ireland's coming budget - the one the boys and girls of the Government want to use as a springboard to return to power.

God knows, he has earned a bit of leeway from Germany.

One week he voted to crucify the Greeks to please Angela Merkel, the next he votes to indulge the French to please the same powerhouse. If Germany says "jump" he says...

Noonan is seeking a German blessing to break European rules in October's budget. Unfortunately for him, Ireland signed up for the Stability and Growth Pact. A key clause dictates that Ireland cannot spend more than its growth rate on infrastructure spending. Michael wants to spend a fortune on election winners like hospitals, healthcare and social welfare. If Wolfgang says "Nein" he will not be able to break the rules. And will lose the election.

Sceptics will point out that the Government has been boasting about our growth rate for months. How often have you heard them claiming that we are "the fastest-growing economy in Europe"? Endlessly.

Sadly, the Commission is a bit on the stuffy side over the growth figures. While the Irish government likes to use the very doubtful 3.5pc figure for current growth, the European Commission insists that it stands at only 0.6pc for spending rules purposes. Michael wants Wolfie to be a bit more "flexible" about the awkward methodology.

The European Commission very prudently uses a 10-year average growth figure to reach 0.6pc. The Irish Government is rubbishing this method, putting forward its highly questionable 3.5pc figure, a number that contains several ingredients that look dangerously fragile and perilously temporary. (The Government's own Fiscal Advisory Council has queried the methodology it uses to calculate growth.)

Funnily enough, the Irish Government is perfectly happy to use the European Commission's more conservative 10-year average method in calculating cost per job in reports of Enterprise Ireland and other semi-state quangos - as a 10-year average conveniently disguises the massive job losses and failures in recent years.

Noonan's generosity to France was not shared by a distinguished fiscal hawk, well-known in Dublin. We in Ireland remember Olli Rehn, former European Commissioner for Economic and Monetary Affairs, seen as the man who imposed austerity on us. Olli the Finn was the enforcer whom we loved to hate. Last week Olli, now a Finnish MEP, let fly at France and his former colleagues in the European Commission. He pointed out that Europe had bottled it last month by failing to declare that France had funked its fiscal obligations.

Furthermore, he insisted that Brussels had refused to declare the truth, that Paris took no "effective action" to reduce the deficit.

Of course, if Brussels had made the declaration, it could have meant sanctions against France. And Germany would never allow that. Sanctions are the sort of punishment that big nations like Germany mete out to little nations like Greece.

Rehn was blunt but honest.

"It is a serious problem for the entire eurozone that its second-largest economy, year after year, keeps on disregarding the rules."

He was diplomatic enough not to remind his interviewer that last October the French government unilaterally declared that it was breaking the new rules. France should have been fined. It wasn't. Greece would have been floated off into the Mediterranean for a similar offence.

The French showed their ingratitude to Ireland by forcing the corporate tax issue onto the agenda at the finance ministers' meeting on Tuesday.

Nothing is more threatening to Ireland's economy than the constant French agitation against Ireland - and others - in their long campaign to force a common corporate tax rate throughout Europe. If it happened we would lose thousands of jobs and hundreds of millions in revenue to the European mainland or even further afield. We voted for France in their hour of need. They responded by sinking the bayonet into our ribs.

The French can afford to show such brazen contempt for Ireland. Anyone who listened to Enda Kenny's pre-European Council speech to the Dail last Wednesday would realise that Ireland no longer has any meaningful voice in Europe. Enda's speech could have been written by a member of the European Commission, so often did it parrot the non-elected bureaucrats' agenda.

The last words in his scripted speech showed the disconnect between Irish people and the oligarchs of Europe.

"I look forward," he promised sincerely, "to hearing the comments and perspectives of Deputies." And with that, he left the chamber.

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