Wednesday 22 May 2019

Success for Syriza spells trouble for Enda Kenny

Head of radical leftist Syriza party Alexis Tsipras waves while leaving the party headquarters after winning the elections in Athens. Reuters
Head of radical leftist Syriza party Alexis Tsipras waves while leaving the party headquarters after winning the elections in Athens. Reuters

Thomas Molloy

Few politicians have more to fear from yesterday's Greek elections than Enda Kenny.

The success of Greece's anti-austerity leftist party Syriza and its dynamic leader Alexis Tsipras has the potential to leave the Taoiseach looking like the troika's poodle a year before he must go to the polls.

Mr Kenny knows this and looked achingly uncomfortable during a discussion in Davos last week where Finnish Prime Minister Alexander Stubb softened his stance on Syriza by hinting that some sort of debt write-down deal was possible.

If the Finns can live with a Syriza deal, then you can be sure the Germans and Dutch have already sold the pass.

This all led Mr Kenny to give a testy warning afterwards about what he called "a drift to populism" which could damage Ireland's economic recovery.

The irony of the leader of one of the most unashamedly populist parties in Europe condemning populism was almost too much.

The problem lies with the optics. Mr Kenny knows that few of us speak Greek or follow Greek politics with any passion.

That means most voters here will form their views on the relative performance of the Greek and Irish economies in a manner that has all the intellectual rigour of an evening drinking ouzo in a nightclub in Ios.

The field is now wide open to Sinn Fein and the Independents to start spouting fairytales about a Greek revival that will be almost impossible to refute in the short space until our own general election.

We had a flavour of this when Iceland picked a different path to Ireland in the 2008 crisis (out of necessity rather than choice). Again, our inability to speak fluent Icelandic and our ignorance of Icelandic economics did not prevent most of us from forming often passionate views on the relative merits of both policies.

Iceland should serve as a warning to us all; the truth is that even today we still don't really have any clear idea about whether Iceland or Ireland made the better decision - and that is six or seven years after the financial meltdown.

Another reality that should stop a rush to judgment is that economic decisions often take a long time to play out: Syriza could make some rum decisions and still look good this time next year.

An economy can look fantastic for years before it becomes obvious that it is running on empty.

Just ask Bertie Ahern.

Clearly, Enda Kenny's big fear is that Greece gets a write-down while poor oul' Ireland doesn't.

There are plenty of reasons to loathe this government but any Syriza-inspired success in getting a write-down is not one of them.

Previous Greek governments, which did subscribe to the Syriza school of hysterics, also managed to secure write-downs and were even allowed to default on some debt. The Greeks are not alone by the way.

In Ireland we had two not ungenerous changes to the bailout as well: the Anglo Irish promissory note deal and the IMF loans that were re-worked to our favour.

We won't get any more.

The sad truth is that Greece remains a basket case. It is in such bad shape that further write-downs are an essential part of any solution to the Greek problem.

Everybody who understands finances, even German chancellor Angela Merkel, knows this and understands it.

The only problem is communicating this to the angry electorates in most countries. Syriza provides an excuse.

The situation is different in Ireland. We are in a bad way but nothing like Greece. We are only the fourth most indebted eurozone country and the economy is growing fairly quickly, even if the official figures flatter our growth significantly. Unemployment is now better than the eurozone average.

The Greek economy could not be more different: inward-looking, stagnant and dependent on countries that are struggling to grow.

The fundamental reason Enda Kenny can't get another write-down is not because he is a troika stooge but because we don't need one.

It would undoubtedly be nice but it is not essential and Europe only does essential these days.

To be jealous of a Greek write-down is like being jealous of somebody with a disease because they get more attention from the doctor.

It is nasty, selfish and doesn't make sense.

Irish Independent

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