Free, free at last?

The tanks did not roll in. No alien army tramped through Dublin. But on December 15th 2010 the prevailing overblown narrative would have us believe, the flag came down from Government Buildings. And, just days later, the keys to Merrion Street were handed over by our ministers to the new proconsuls of the troika, conjuring up images of the burghers of Calais in Rodin’s celebrated sculpture surrendering the keys to their city. Sovereign no more.

"Was it for this...?" this paper editorialised, reflecting the national anguish: "Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund. " And, we argued, "the true ignominy ... is not that our sovereignty has been taken away from us, it is that we ourselves have squandered it."

As we prepare to exit the bailout tomorrow the mood music is rightly somewhat less momentous. Although the Government – which does deserve some credit – is whipping up a storm to burnish its image as national saviours, the "historic" restoration of our sovereignty is viewed by most citizens more soberly, less as a great leap forward akin to independence in 1922, and more perhaps with the benign indifference manifested on our 1973 EU accession.

The pain continues
That more realistic perspective reflects the reality that while some measure of lost independence may have been restored, sovereignty does not butter bread. The pain continues for working and middle classes alike. The sense persists that those who pay are not those who created the crisis. Austerity is still the order of the day, and will be so for years. Unpaid, unpayable mortgages are foreclosed on, jobs remain scarce, our young still head for the emigrant ship, shrunken wage packets make this Christmas shop an ordeal ... The State may be returning to bond markets full of confidence, without the need for a safety net borrowing facility, but let's not forget that its purpose is to borrow from others, instead of the troika, to repay a debt incurred in the bailout process that will have us on the hook for the next 25 years.

And have we brought the beast that brought us down under control? The financialisation and securitisation that had transformed capitalism worldwide took Ireland by storm – the financial sector (measured as bank assets as share of GDP) had grown here from 150 per cent in 1995 to 903 per cent in 2008. Fed by cheap credit and weak regulation, Anglo was a train crash waiting to happen. Today, while regulation has been tightened, and the EU moves towards banking union, in Britain there are again calls for banks to be free to return to the sort of dangerous lending that caused the crisis (Financial Times December 11th, Page 1, "BoE champions bundled debt"). Have we learned?

And if the bailout's economic price is still being paid, the sense of unfinished business also remains in the political realm. The rout of Fianna Fáil and election of the coalition were supposedly the first phase in a political reform process that many hoped would transform a discredited political system. We are still waiting.

Shared sovereignty
There is probably now also a more nuanced understanding of the nature of sovereignty: not all or nothing, not like pregnancy – you're either pregnant or not; but sovereignty as a continuum, always partial, and that can be shared with EU partners without engaging in what is seen simplistically by nationalists as a zero sum game. Sovereignty shared, they say, is sovereignty lost. But it is more than a legal concept, more than a line of treaty text. Sovereignty is a measure of a state's ability to implement its decisions – to do so it may be necessary to march in step with others, pooling sovereignty to achieve what otherwise would not be possible, creating sovereignty where none existed.

And – do we need to be reminded ? – as we say goodbye to the troika and its disciplines, we embrace with all the other 27 member-states, disciplines that are just as severe in the new toughened, collective EU budget monitoring process that sees annual commission vetting of spending and tax-raising plans. We’ll hardly notice the troika’s gone.

Have we learned the lessons? Is the country now, as one economist sarcastically characterises the Government's mantras, "the best small country in the world in which to do business", "a better governed place having learned the lessons of the past", and with no prospect of "return to the bad old days of cosy deals, lax lending and spending and property craze"? That's certainly what the Government would have us believe, along with its message that Fianna Fáil was wholly and exclusively to blame... But as historian Diarmaid Ferriter warned yesterday in these pages, although we can welcome a new milestone in our history and a new opportunity for moving forward to recovery, "patriotic flag-waving" on December 15th would be "misplaced and delusional".