Lashing out at the troika is politically convenient but it is not in the national interest, writes NOEL WHELAN
ONE WONDERS why the troika bothers to hold press conferences when issuing its quarterly reviews. They achieve very little, and have just become opportunities for journalistic grandstanding and an occasion to reprise the national tendency to displace responsibility.
We Irish love to feel others are to blame for our predicament. The IMF-EU-ECB troika has become the new bogey man in Irish politics and is now the deflection point for national and political accountability.
For decades after independence we Irish continued to blame “the Brits” for all our ills.
In provincial Ireland some love to blame “that shower in Dublin” for policy they find irksome.
More generally, many denounce “those bloody bureaucrats in Brussels” for any regulation which encroaches on the instinctive Irish desire for an easy life.
Now a simplistic and unhealthy notion is developing that the troika is responsible for our current austerity rather than ourselves, and that the EU in particular is somehow letting us down. It risks framing a distorted context within which any potential referendum on European fiscal integration may have to be fought.
In one of the more colourful moments at the troika’s press conference in Europe House on Molesworth Street on Thursday, Vincent Browne called the troika “you people”.
“You people,” he said, “are intervening in this society causing huge damage [by] requiring us to make payments [to unguaranteed Anglo Irish Bank bondholders].”
It is a pleasing thesis that somehow the social damage being caused in Ireland is the fault of “you people” in the troika.
It is worth remembering that the IMF-EU-ECB “intervention” in Ireland arises because Ireland went broke.
Like the Normans, they were invited here, although they come bearing cash rather than weapons and they come to dig us out of a hole of our own making and not to drive us off to Connacht.
The impact of the current austerity on Irish society flows from choices made in Ireland by Irish governments. It was the democratically elected government of Ireland from 2002-2007 and the democratically re-elected government of Ireland from 2007 to 2011 that implemented the popularly endorsed policies which got us into this mess, not the ECB or the IMF or the European Commission.
It is not an IMF requirement to pay unguaranteed Anglo bondholders which is causing the austerity; it is contributing to the burden but a relatively small part. The overall bank bailout is not the primary cause of our current borrowing needs. It is a significant component of our national borrowings, but only a component.
The bulk of our borrowings to date and in the next few years is attributable to the need to plug the gaping hole in our public finances which emerged when the property bubble burst. That was a consequence of our unbalanced tax system and its over-dependence on the fragile construction and property boom and of overreach in our public expenditure.
These regular reviews of our performance by the troika are like quarterly meetings with our bank managers. Our previous irresponsible behaviour and our debt level mean the IMF-EU-ECB are the only bank managers who will lend to us.
It is inevitable that we would resent our dependence on them and lashing out is a natural instinct. It is politically convenient and journalistically satisfying, but it is neither productive nor in the national interest.
Another interesting twist in the comment on our relationship with our IMF-EU-ECB bankers is the recent tendency to sneer at our new international characterisation as the “best boy in the bailout class”.
This sneering arises because some want to suggest we are being overly subservient bailees more anxious to impress our masters or European classmates than do what is right for ourselves. This misses the point.
High achievers in the classroom, as elsewhere, may be influenced by a desire for peer or supervisor approval but the drive comes primarily from their own ambition to succeed in their own interest.
The policies being implemented over the last 12 months by the current Government, which are strikingly similar to those of the previous government, are being implemented because it sees them as the best way to get Ireland out of its current predicament and move on from the type of austerity we currently have to endure.
One other feature of the coverage of Thursday’s press conferences was the apparent discrepancy between what Brendan Howlin had to say about whether the troika had changed its view on what the Government could do with the proceeds of privatisation and what troika officials had to say about it at their media event.
The Government is committed to selling some, as yet unspecified, non-strategic public assets at an unspecified point in time. Howlin says the troika has changed its view on whether the Government can spend some of the money raised on jobs programmes.
Some have interpreted the troika response as lukewarm on that suggestion. To my ear the troika was saying that if the Government was “ambitious” enough in its privatisation programme it might not have to use it all to pay down debt. It sounded to me like the more the Government sells, the more likely it is to get to hold on to some of the proceeds.
I am conscious that when I speak of us Irish as being responsible for our own predicament it goes against the grain for most people who rightly feel that they are not personally responsible for the bad decisions made.
However, that debate as to who is responsible for the state in which we find ourselves should continue to be dealt with here among ourselves in Ireland rather than deflected at our European partners.