Monday, 2 May 2011

The Great Swindle...

The Government, the EU and a great swindle...

In a massive shafting of the Irish people, our own leaders and those in Europe threw away our democracy.

Let's play a simple game. Let's put together three stories that emerged last week. And when we do this we will see, more clearly than ever, that we were royally screwed, that we are victims of one of the biggest stitch-ups perpetrated on a country since the heyday of colonialism in Africa.

We were stitched up by an unholy alliance of our own Government and autonomous undemocratic institutions within the EU, who seem to be answerable to no one, and other institutions within the EU that are supposed to be answerable to us. Each of these stories, if you read them, will have angered and astounded you. But put the three of them together and you will be fit to be tied. Again.

The great swindle begins with the European Commission. You probably don't know exactly what the European Commission is. You are vaguely aware that it is one of those fat-cat institutions in Europe, that is not quite the European Parliament, but that seems to wield enormous power over our lives. The Commission is roughly speaking the executive wing of the EU Government. The critical things you need to know are that they look after the interests of the EU as a whole rather than the interest of individual countries. They are supposedly above national politics and each country nominates a member. Ours is currently Maire Geoghegan-Quinn.

Klaus Regling, formerly the head of the Commission's Directorate General for Economic Affairs (2001 to 2008, a critical period in this country's history) and now head of the European Financial Stability Facility (the bailout fund) was in Dublin on Wednesday and he admitted all the international bodies which should have been keeping an eye on Ireland's economy had failed in their job. He said the so called "pro-cyclical" economic policies being pursued here at the time "were not criticised really by outside bodies, who were in charge of doing this, of supervising the economy -- the IMF, the OECD, the European Union, including me, myself in my job".

Regling said there was a certain amount of debate on credit bubbles but any criticism that was levelled at the way the Irish economy was going was not strong enough.

In other words, it was not just our own regulators who were asleep, so were the people in Europe who govern us. So Regling, who has no reason to do so, and every reason not to do so, is admitting basically that Europe was responsible for what happened here and should have stepped in. Obviously Regling blamed our Government and the whole standard property mania/group madness thing as well. But he is one of the few Eurocrats to admit publicly that Europe played a huge part in our downfall. They were the ones setting our interest rates, they were the ones directing much of our economic policy, they were the ones looking after the currency of which we are a member, and as Regling clearly says, it was their job to be keeping an eye on us. But no surprises there really.

Go back to the Commission's job and Regling's when he was there. It is to protect the interests of Europe as a whole, and not the interests of individual countries. And clearly Europe hadn't copped at that point what a threat we could become to Europe. They were happy to leave us destroy ourselves as long as we didn't compromise the overall project. And by God it has become clearer to us every day for the last few years what interests are paramount to Europe, and it's not ours or anyone else's other than France's or Germany's. "We failed", Regling said bluntly last Wednesday, as he explained how a censure motion on Ireland was dropped in the face of a bit of resistance from Ireland, and a lack of support for censure from other EU members.

By the way, on a brief tangent, Regling didn't say what he thought about the current pro-cyclical economics being pursued in this country. Procyclicality, increasing spending in the face of a rapidly expanding economy, was the wrong thing then, we now know, but no one seems to be concerned that we are now dealing with a rapidly deflating economy by cutting spending massively -- which is also procyclic. Same mistake but different direction. But then, this time the procyclicality is for the good of the EU as a whole, not just for Ireland. And that, of course, is what matters.

Story two is Dan O'Brien's extraordinary analysis of how the ECB behaved in terms of the EU/IMF bailout. O'Brien, who is our premier authority on this right now, pointed out last week that there are serious questions about how the ECB acted in terms of our bailout. He says that these questions also underline the ECB's lack of accountability in general. Without hopefully doing O'Brien a disservice, because his piece was carefully weighed up, let's just go over some of his findings about the ECB.

O'Brien says Brian Lenihan told him the ECB governing council briefed the media in an uncontrolled and damaging way around the bailout. Lenihan said the ECB also misdiagnosed Ireland's economic problems and had limited engagement with the Irish authorities on addressing these problems before the bailout (shades of what Regling admitted above). This led, Lenihan said, to ill-thought-out measures being included in the bailout, measures that were unimplementable.

O'Brien goes on to point out that either the ECB had not told the European Commission about the bailout or else Commissioner Olli Rehn just didn't mention it when he was in this country just 48 hours before the ECB decided to implement the bailout. O'Brien says it is unlikely that Rehn was being duplicitous and that in fact it seems, staggeringly, the Commission actually didn't know the ECB was about to move in. More generally, O'Brien points out the ECB is barely answerable to even the European Parliament.

So, what have we got so far? We have Europe being hugely negligent, "failing", in Regling's words, in their job of supervising our economy. Next, we have the ECB, without apparently consulting any of the governing bodies of Europe, acting completely off its own bat and forcing a bailout on our country, without ever engaging with us to resolve our problems. When this bailout was enforced, a two-year-old could have told you it was unsustainable, and this, we now know, is because the ECB did not properly diagnose the country's problems, and therefore did not offer a suitable solution. And this is because the ECB didn't discuss Ireland's issues with anyone in Ireland. Basically we were invaded by a completely autonomous foreign power, literally an economic dictator, and we were told it was for our own good. The ECB took on the white man's burden. And as O'Brien also points out, there was no need for them to come so aggressively at us, because Ireland had been a willing and compliant partner to the EU and the ECB, and had been happy to acquiesce to most policy demands.

And then we come to part three, our own Government's part in the stitch-up. It also emerged last week that on Tuesday, November 16, 2010, five days before the Government gave away our sovereignty, there was discussion at a cabinet meeting about "the Minister for Finance's engagement with the IMF, ECB and European Commission" and a "secret" decision was discussed regarding further engagement. Yet Brian Cowen told the Dail the next day the Government was still not in negotiations about a bailout. So while Europe was stitching us up, our own Government was lying to us about the impending threat of what we now know was an economic invasion. In fact, while our Taoiseach was lying to us, the members of the invading troika were already in Dublin, presumably having chats with the Minister for Finance.

What makes all this particularly infuriating is that our Government had already secretly ruined the country when it colluded with the EU to introduce our unlimited bank guarantee.

Neither the cabinet, the parliament, nor the people were consulted on this decision, the most disastrous economic one ever made in this country and one that we will all pay for for decades to come. It's almost as if the last Government, like the ECB, had decided democracy was too clunky and slow, and they knew best what had to be done and it had to be done quickly without the tiresome business of consulting the rest of us.

So there you have it. Unless anyone else can shed any other light on things it seems clear the story is, as of now, that democracy was thrown out the window by the EU and our own Government in a massive shafting of the Irish people.

And if that is the case, then there is no reason why we should honour any of the various deals that were made. Because they certainly weren't made by us or in our name.

Report - Brendan O'Connor - Sunday Independent

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