The Taoiseach’s take on our boom to bust saga fits a strategy where denial is not an option
PERHAPS IT’S the high altitude, 1,600m above sea level, but the view of Ireland from Davos yesterday appeared curiously distorted.
Taoiseach Enda Kenny arrived on Switzerland’s fabled magic mountain in the afterglow of a well-timed bond swap. Bankers and politicians, impressed at how we had dipped our toe into financial markets once more, were anxious to hear Kenny about rebuilding Europe.
When he said the Irish “went mad borrowing”, no one in the Davos congress hall batted an eyelid. Of course the audience didn’t realise this was the latest in a series of curious soundbites about Ireland’s boom and bust – from Brian Lenihan’s “we all partied” remark in 2010, to Kenny’s “you are not responsible for this crisis” television address last month. None were the most nuanced soundbites in the annals of Irish politics.
Nor did the Davos audience know how, in 2007, the then German ambassador suggested that the boom had “coarsened” Irish people. They might have been interested to hear how the initial outrage was followed by a huge groundswell of support from the Irish who welcomed the ambassador’s frankness.
Kenny’s remarks in Davos fit into the same category, and are part of a strategy adopted by Irish Ministers when they travel abroad to explain Ireland’s policy agenda.
In Berlin two weeks ago, Minister for Finance Michael Noonan told an audience of bankers and politicians that Ireland “got into trouble because we borrowed cheap on interbank markets and lent on speculative projects”.
Developers were “building apartment blocks on the Black Sea or putting in an underground in Singapore with little or no benefit to the Irish economy”, but left Irish banks desperately exposed.
Another frank, self-critical take on our economic mess and one that left the Berlin audience impressed.
In all of these boom-to-bust speeches, there is a clear context: bad banking regulation, low interest rates and the rest. But the Government’s strategy of embracing frankness rather than denial has already paid dividends.
Around Davos yesterday, several attendees suggested that Kenny had made some of the most truthful remarks of the forum. From the perspective of Davos, the outrage in some Irish quarters reflects a growing disconnect with how they believe Ireland is perceived in Europe and how Ireland perceives itself.
“The view of people outside of the island of Ireland is far more positive about Ireland than the view on the island of Ireland itself,” remarked Barry O’Leary, chief executive of the IDA in Davos.
This determination to be unhappy and assume the worst is impinging on Irish attitudes to the ongoing negotiations to reform the EU budgetary rulebook.
From a German perspective, further shows of EU solidarity must be linked to new rules to prevent a second crisis. These budgetary rules will have to have teeth before Berlin is going to come on board.
This may seem unfair to people who got used to spending other people’s money – and cry foul when the Taoiseach points this out – but this is the European political reality. The new fiscal compact is not an elaborate conspiracy to torment the poor, suffering Irish.
There is widespread, justified anger in Ireland at how banks made enormous profits in the boom then, in the bust, managed to socialise staggering losses.
But might a similar sleight of hand trick lie behind the outrage over Mr Kenny’s remarks? The same people who insisted that Ireland’s boom was all their own doing – nothing to do with EU investment or trade opportunities – now insist the bust is Berlin’s fault and Brussels’ problem. Privatise success, socialise failure and condemn anyone who points out the inconvenient truth.
