Exiting the bail-out

» Eoin Ó Murchú

The need for a rejection of this crippling austerity was recently recognised by Romano Prodi, the man who first suggested the euro

THE Irish Government’s laughable assertion that it has recovered our economic sovereignty as a result of exiting the bail-out is contradicted by two points: first, the Fiscal Treaty gives the EU permanent oversight of our budgetary and economic policy; second, our economic capacity has been savaged by austerity for a very long time into the future.

Government spin cannot alter these facts any more than they can just wish away the thousands of young people who have been forced to emigrate, the miserable failure to meet growth targets again and again, or the fact that while we have ensured that Europe’s banking system is untouched our own is incapable of providing the credit needed for businesses to operate, notwithstanding the billions already poured in.

Nobel Prize-winning economist Joseph Stiglitz, on a visit to Dublin, warned that it had been a mistake to burden taxpayers with bank debt, and that because of austerity it will take at least ten years before we recover.

That is ten years of emigration and loss, ten years of penury and worry.

Yet, far from the Government recognising the harm that has been done, they brazenly boast that their policy has been a success. Some success when the consequences have been so dire.

It is not just Ireland, however, that needs a reflationary policy, an expansion of state investment in job creation. It is the whole of Europe.

But Europe is now completely dominated by Germany, which is sucking the life out of every other economy and, ironically, in the long run, creating huge problems which will rebound on Germany itself.

If the other European countries are too impoverished to buy German goods, that will have a negative impact on Germany itself further down the line.

The need for a rejection of this crippling austerity was recently recognised by Romano Prodi, the man who first suggested the euro. Prodi has argued that the countries of southern Europe need to come together to outvote the Germans and insist on a change of policy. And what Prodi proposes for Spain, Portugal, Italy and Greece is true for Ireland too.

Politically, however, no leadership has emerged from these countries to take the first steps in forming such a bloc, as each one hopes that by being a good boy in class the German teacher will smile on them and give them a break.

And none are as supine in prostrating themselves before the German masters as the Irish Government (fully supported by Fianna Fáil in opposition).

Meanwhile, the EU Commission reported that overall growth in Ireland this year will be low, just as the Government boasts that we have turned the corner and can see ‘the green shoots of recovery’.

Alas, these shoots only exist in the Government’s imagination.

The central problem, apart from the billions which have been wasted being poured into the banks (which was all done to benefit Germany) is that Europe’s monetary policy is dictated by German needs. But this policy is strengthening the euro on international markets and thus making our international exports more difficult, just as Europe itself is floundering.

We should never have joined the euro, over whose exchange rate and other policy directions we never had any influence; and we MUST exit it if we want to regain any alternative to austerity and economic collapse.

But our craven government will not even raise a voice of protest or argue for any modification of the policy thrust.  The reason is that speaking up will bring down on us the ire of German Finance Minister Wolfgang Schauble – the same Finance Minister who has turned a deaf ear to every humiliating plea for easing our burden.

Instead, they concoct one set of figures for domestic consumption while giving Europe another set for deal discussion. At home, we are supposed to have turned the corner, even though the unemployment queues and emigrating lists belie this claim; in Europe, we want not a public line of bail-out credit but a nod and a wink from Angela Merkel that she will see us right.

Meanwhile, the crisis continues, and it continues throughout Europe. The whole edifice is tottering on the brink but rather than try and rescue us from this calamity our politicians play at being with the big boys, shutting their eyes to the reality of austerity and shutting their ears to the growing list of European economists who are denouncing what is going on.

• Columnists’ views in An Phoblacht are those of the authors and do not necessarily reflect the views of Sinn Féin