Ukraine puts our bank problems into a better perspective

Opinion: Commentators blame EU for Ireland’s ‘austerity’, as if there was some painless option


The arrival of two leading Ukrainian politicians in Dublin to plead with European Union leaders for meaningful action to prevent a Russian takeover of their country put the simultaneous debate about Ireland’s legacy bank debt into perspective. Whatever the outcome of the Government’s effort to secure a more favourable deal on the debt, our problems look like small potatoes compared with those facing Ukraine.

Former Ukrainian prime minister Yulia Tymoshenko and Vitali Klitschko, a leader of the uprising that toppled Viktor Yanukovych from power, were in Dublin for the annual congress of the European People’s Party (EPP) at Convention Centre Dublin, which was attended by an array of EU prime ministers.

The two Ukrainian leaders warned that failure to prevent Russian intervention would have damaging implications for the world. “The imperial ambitions of Russia have to be stopped,” Tymoshenko said.

The burning desire of so many Ukrainians to join the EU, or at least move into its orbit and away from Russia, was the key motivating factor that underpinned the eventual change of government in Kiev.

It is so easy for people in this country to take for granted the enormous benefits that go with being a member state of the EU. For a start we are sheltered by geography from the harsh reality endured over the past century by the countries of central Europe that border Russia.

Thirst for freedom and prosperity
We also take for granted the basic democratic institutions, enjoyed by Irish people for generations, so that it is hard to grasp the thirst for freedom and prosperity that motivates people in Ukraine.

Over the past two decades its political leaders, including some of those now restored to power, have failed abjectly to avail of the opportunity that presented itself when the Soviet Union collapsed. Corruption has been an endemic problem in Ukrainian politics, infecting all sides.

The newly installed Ukrainian authorities haven’t exactly covered themselves in glory either by the way in which they have shown disrespect to the country’s substantial Russian-speaking population, providing a pretext for Russian intervention.

It is worth noting that in 1990 the gross domestic product (GDP) of Ukraine was slightly bigger than that of its western neighbour Poland. Ukraine has a population of just under 50 million, whereas Poland has just under 40 million, but the two countries were in a similar position when the Soviet yoke was lifted.

Since 1990, Ukraine’s GDP has more than doubled; but Poland’s has increased by eight times and living standards there are now far higher than its eastern neighbour’s. The role of EU membership in helping Poland dramatically improve the standard of living of its people as well as ensuring the preservation of democratic values and human rights has not been lost on the people of Ukraine. For many of them the EU represents a promised land of freedom and the rule of law.

In Ireland the EU is casually demonised at every turn by some Opposition politicians and a range of commentators who blame it for the imposition of “austerity”, as if some painless option for getting out of the mess we created had been available. Many are the same people who called the economic crisis wrong at every turn, predicting the collapse of the euro and urging default on the national debt.

Common sense prevailed, thankfully, with the three biggest parties in the Dáil and a majority of the voters accepting the need for the range of tough decisions required to restore the economy to health. Ireland is now on the road to recovery and, while there is still a good way to travel, the omens are looking increasingly good.

The decision of UCC to award an honorary degree to European Commission president José Manuel Barroso was a welcome recognition that the union played a vital role in rescuing Ireland from disaster. Barroso praised Ireland as one of the EU’s best friends and made a soothing reference to the fact that the European Council had agreed in June 2012 to put the link between bank debt and sovereign debt issue on the agenda.

‘Precious solidarity’
He put on record his admiration for the “courage and resilience of the Irish people” in making sacrifices to get the economy back on track. “Ireland has shown it can be done if there is a determined effort across all parts of society and politics. And you had precious solidarity and financial support from the EU and its members states,” he added pointedly.

Getting a deal on easing the bank debt will require not just the support of the commission, which is probably willing, but the agreement of all other EU member states. Given that some have national debts approaching our own level it will take some manoeuvring to get them to agree to put up the cash to reduce ours.

An important aspect of the EPP congress was that it highlighted the good relations Enda Kenny and his party have with Europe’s most powerful leaders. One of the Fianna Fáil government’s big failures was a lack of engagement by ministers with the EU that cost it dearly.

The Coalition and its senior officials have shown a great deal of adroitness in getting the bailout terms modified twice since 2011, so they may be able to get the final leg of a deal that would significantly improve the country’s debt/GDP ratio. That is where the EPP connections could prove vital.

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