Ignominy of bailout compounded by contemptuous leaders

Thu, Nov 18, 2010, 00:00

ANALYSIS:AND SO it has come to pass. The spectre of bailout, which has loomed ever larger on the horizon over the past two years, is upon us. Ignominy heaped on catastrophe.

Today, officials from Brussels, Frankfurt and Washington land in Dublin. Their arrival heralds the beginning of discussions on the terms of a bailout. The type, scale and scope of the conditions to be imposed are far from clear at this point.

The shorter the timeframe for discussions, the more limited the scope of the conditions are likely to be.

The extent to which the terms of the Croke Park deal are contravened, if at all, will indicate how radical it will be.

Front and centre in the talks will be the bleeding sore that is the Irish banking system. The International Monetary Fund, the European Central Bank and the European Commission will all have their say on this.

The latter institution will be represented by Olli Rehn’s economic and financial affairs directorate-general. Despite Rehn departing Dublin only eight days earlier, he said in Brussels yesterday that it would be “premature” for him to discuss Ireland’s banks because he did not have the “full picture”.

His officials will be the only ones representing the commission. This is curious. The directorate-general for competition has been penalising all European banks in receipt of taxpayers’ money.

In Ireland’s case, his officials have been very busy over the past couple of years in relation to the State’s banks, either setting down conditions for their restructuring or vetoing their plans for their own restructuring.

That they are not joining Rehn’s people tomorrow is more than a little strange given the explicit focus on getting to the bottom of the banking fiasco.

Even more curious were Brian Lenihan’s ramblings on RTÉ’s Morning Irelandprogramme yesterday.

He said that there is “no question of loading on to the Irish sovereign or Irish State some kind of unspecified burden”.

He cannot believe that the outsiders are here to expose Ireland to more bank losses given that he long ago guaranteed the lot. Is he trying to portray himself as the protector of the Irish taxpayer against wicked foreigners who wish to bury them in even more debt?

His comments on the four-year budget plan were notable. On Monday, the Government position was that it would be published early next week.

By yesterday, Lenihan said in the same interview “I take it the [four-year] plan will be published by the end of the month” (my emphasis). Either the formulation of the plan is at sixes and sevens or the rowing back from the early-next-week date is at the behest of the commission- ECB-IMF troika because they want to have even more say in its drawing up.

No matter how important these issues are, they are mere details in the broader ignominy of having to be rescued by foreigners.

Honour demands that those at the helm who have failed to navigate away from this national humiliation should concede their failure and stand down.

Instead, they have no intention of doing so. Worse still, Government representatives display contempt for citizens with their bare-faced denials of a bailout when it is so patently happening.

A government of honourable people would hang its collective head in shame, concede that it had failed, call an election and immediately bring the Opposition in to talks with the troika so that all parties that might potentially form a government are involved.

That would bring political unity, leveraging what limited influence the State has in talks with those who are bailing it out. Not to do so, and after all that has happened, is to weaken further this State and add to the harm inflicted on its citizens. If ever there was a time to do what is right and honourable, this is it.