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The real work must go on

BRIAN Lenihan was in Brussels last night -- the right place for Ireland's Finance Minister. At home, politicians may wrangle, the Fianna Fail Party may lurch towards defeat and discredit, but the real work of the Government must go on.

Mr Lenihan's mission was to try to obtain a reduction in the interest rate we must pay under the terms of the EU-IMF bailout. It took place in the context of a series of sometimes tense and ill-tempered meetings on closely related subjects. These meetings put Ireland's position in perspective, and not a happy perspective.

The interest rate, although it appears excessive by any normal standards, is far from the core issue, and we have a good chance of gaining some relief. The central issues are enormous, highly controversial, and illustrate some facts about political and economic power which we should have learnt long ago.

In response to the world financial and economic crisis and the threat to the European common currency, the EU has created the EFSF (stability fund) in the hope of preventing more attacks on the currency.

The fund has a nominal value of €750bn. Some governments, and some of the world's most respected economic commentators, like Wolfgang Munchau of the 'Financial Times' and Willem Buiter of Citigroup, consider this far too small. A figure of €2trn has been mentioned as the amount that may be necessary to deter speculators.

But the proposal has led to political as well as economic dispute within the European Union. The Germans dislike it, for understandable reasons. They see themselves as prudent people forced to pay for others' excesses. Morally, they have a case. Politically, they have immense power.

Ireland is close to the other end of the scale. Undeniably -- though the Taoiseach, weirdly, still tries to deny it -- our troubles are self-inflicted, and other countries know that. The Anglo Irish Bank saga is as familiar in Frankfurt as it is on Dame Street.

Nowadays, any Irish minister negotiates in Europe from a weak position. He can forge friendships with representatives of other countries. He can enlist the expertise of the Department of Foreign Affairs. But he still represents a tottering government which has brought our economy close to ruin and will soon lose office no matter who leads it. For that reason if no other, we need an election and a government with some cohesion and sense of purpose.

Irish Independent