Let's end charade before EU chiefs get more powers

Tue, Nov 29, 2011, 00:00

LET’S BE mercenary. How much have we got from the European Union since we joined in 1973? The Common Agricultural Policy gave Irish farmers €44 billion between 1973 and 2008, and €1.8 billion a year since then, making a total of €50 billion so far.

Up to 2013, Ireland will have received a further €18 billion from the structural, regional and cohesion funds. From this we have to subtract Irish payments into the EU budget which, so far as I can make out, total about €25 billion since 1973. So we’re looking roughly at a net gain of €43 billion.

And now a second mercenary question. How much are we paying back to the EU to support the euro and rescue euro zone banks? At the time of the so-called “bailout” by the troika this time last year, euro zone banks held €214 billion in Irish debt.

German banks alone were on the hook for €103 billion of that total. The purpose of the “bailout”, and of the entire policy of saturating failed Irish banks in public money, is to ensure that these debts are repaid. Otherwise the euro zone’s banking system will be plunged into crisis.

It is impossible to say precisely how much this Irish bailout of the euro zone is costing us taxpayers. We don’t know how much Nama will cost in the end or what the State’s stake in the banks might ultimately be worth.

So let’s just take one slice of the cost – the money that’s gone on Anglo Irish Bank. This is definitively dead money, a massive blood transfusion into a putrefying corpse. It amounts to €30 billion up front and at least €17 billion in punitive interest payments to the European Central Bank. That’s €47 billion – €4 billion more than all the money we’ve received from the EU, through Cap and the aid funds, since 1973.

These figures are directly comparable. One was a transfer from relatively wealthy European (and in particular German) taxpayers to the citizens of an economically hard-pressed Ireland. The other is a transfer from the citizens of an economically hard-pressed Ireland to the relatively wealthy European (and in particular German) taxpayers.

Let’s be clear about this: the only beneficiaries of the State’s assumption of Anglo’s liabilities are taxpayers in the countries whose banks were the reckless lenders to Anglo. Anglo, for all the guff at the time of the bank guarantee, had no systemic importance to the Irish economy. Irish taxpayers had no moral or other liability for its debts.

The sole reason for saving it was the ECB’s insistence that no euro zone bank should fail. Had Anglo failed, the costs would have been borne primarily by European banks and consequently by European taxpayers.

So the undertaking by the Irish State to stump up €47 billion to pay those private debts is an act of extreme (if extremely demented) euro-altruism. We are Europe’s ragged-trousered philanthropists, bailing out the euro with money we don’t have and that our European partners are kindly lending us at penal interest rates.

And this single act of insane generosity wipes out every red cent we’ve got from Europe since 1973. All the blissful bungalows, all the high-tech milking parlours, all the four-by-fours, all the combine harvesters, all the sewage pipes, all the sleek black motorways, all the streamlined new trains and unsoiled new buses, all the tourist information centres and community development schemes, all the fixed-up piers and buzzy broadband connections, all those sweet little blue flags with their twinkling eurostars – all of them wiped off the balance sheet. Everything we’ve got over nearly 40 years, paid back with interest.

And for what? For less than nothing. For a moment of panic, a daft notion, a stupid indulgence in bluster and bravado. Some bleary-eyed fools decided, in the middle of the night, that they could bluff the markets by throwing all the chips we might ever have on to the table. It didn’t take long for the markets to realise that their hand contained nothing better than a pair of deuces.

But the gamble failed for Europe too. There might be some kind of (very expensive) pride in being able to say that little Ireland took the hit to save the euro zone, like the starry-eyed gal who takes a bullet for the outlaw in a corny western. But we saved nothing. All we managed to do was to buy the euro zone leaders more time in which to delude themselves that there was no real crisis, just a few brush fires out on the perimeter. And to hide from the German taxpayers the reality that their banks had been as reckless in their lending as ours were in their borrowing. The sole achievement was a deepening of paralysis.

This charade has gone on long enough. It is killing Ireland, but it is also killing the EU. Do its leaders really expect us all to vote to give them more powers when they’re only interested in using them to take back what they’ve given us? We may be the stupidest mercenaries of all time, but even our folly has its limits.

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