Ireland Gets Schooled in International Affairs

One of the most interesting revelations from the article by Dr. Doom (known to mere mortals as Morgan Kelly) in last Saturday's Irish Times was the role played by the United States in "torpedoing" (to use DD's phrase) a plan by the IMF to offer Ireland a bail-out on terms far less onerous than those subsequently secured under the actual ECB/IMF deal.

At first, I was shocked that Treasury Secretary Geithner could stab us in the back so ruthlessly - et tu Timmy? Sinking Ireland's recovery just because you don't like the idea of burning bondholders? Worried about the questions it might raise about your own government's policies?

My emotive gut-reaction was almost to engage in a bout of anti-Americanism - quite a change from a week earlier when I had been tempted to join in with the chants of "USA! USA! USA!" following the events in Abbotabad. I am, for an Irishman, a sufficient right-wing nutjob that America can do little wrong in my eyes. Which makes it all the more painful that the US has tag-teamed with the German's and Brussels to stamp all over us, and pin the poor investments of European bankers on the Irish taxpayer.

Of course, my initial teary-eyed whinging soon gave way to more sober realism - this is what nations, particularly powerful ones, do. They protect their interests. In fact, this is one reason why I admire the United States - it stands up for its interests, and pays heed to the international community only as a means to make to get its ends accomplished. When such international structures get in the way, they are ignored. The SEAL operation in Abbotabad was, at least as a violation of Pakistani sovereignty, illegal. But it was in America's best interests, so international law be damned. It might be brutal, but you have to admire the almost elegant pragmatism.

The problem with our politicians in Ireland is they actually believe this "international community" guff - they think the EU is a happy club of European nations that aims to treat all members equally, rather than a structure for the major European powers to exert their soft power. We have benefited greatly from membership of the European club - but Germany has also done well out of the Union. After all, where would Germany's export economy be now without the wider Eurozone to dampen down the inflationary pressures? How much would a Merc cost if it was manufactured in a Deutschmark economy. Similarly, at the 4th attempt (counting the Franco-Prussian War), Germany is now able to exert real political power throughout Europe, almost unopposed by any of the other formerly great European powers. And without the, eh, unpleasantness of the last few attempts.

Germany is a big country, and big countries like to exert influence; there is nothing inherently wrong with that. The injustice lies in the fact that our political elite feel that there is some moral onus on them to meekly accept this influence. Today, we are witnessing the massive price Ireland has paid for missing out on the Second World War (admittedly, there would have been some downsides to taking part!). Nations of similar size and political weight to us, such as Denmark, Finland and the Netherlands, didn't get to skip the whole "apocalypse made real" thing between 1939 and 1945 - they had to deal with a war, not just an "Emergency". As such, they know that sovereignty and independence are precious, but also fragile. They know that a nation can be here today and Anschlussed tomorrow. What's more, they understand that if you engage in messy governance, wink at corruption, or ignore systemic economic problems, you are increasing the risk that you will lose your say over your own country. Great powers are always looking to gobble up more territories, and will add you to their empire/sphere of influence/bloc or whatever they're calling it these days, if you present them with an opportunity.

But in Ireland, our leaders don't see that. They think the Finns are listening to Timo Soini because of anti-immigrant sentiment. They assume the Danes stayed out of the Euro because of small-minded obstinancy. They think the Dutch Finance Minister is backing Ireland's low, low corporation tax because the Dutch are just nice guys. The simple fact is the Finns don't want to pay for a Euro bailout, and voted accordingly; the Danes realised that their "small, open economy" would be derailed by a common currency, and the Dutch are thinking "hang on, if the Irish aren't allowed set their own taxes, how long till we start getting told how to run the show here?". These countries take their national interests, their sovereignty as states, seriously, because not that long ago they were nearly wiped out. In Ireland, meanwhile, the great and the good want to keep Europe happy, on the off-chance they might be made EU Commissioner for Science and Innovation.

C'mon guys - whip out a copy of "the Prince", learn to bluff, and go give Brussels the "Blazing Saddles" defence. We are going to suffer economic Armageddon regardless - let's see what happens if we play the Big Boys (and Big Girls, Angela) at their own game. Threaten to visit financial hellfire on their heads, and see if they are worthy of the status of "Great Power". Otherwise, get use to being relegated from "national leaders" to "provincial politicians". If you want to lead a nation, get to know how the real world beyond our island actually works.

Meet the New Owners - Part 1: The Germans

With Irish bond yields having shot through the roof this morning, jumping from  5.744% to 6.046% and still climbing (BTW - I used a Bloomberg link; I feel so grown up!), I thought now would be a good time to look at Ireland's  various and many new potential owners. Today we start with the leading candidates to reposses this misty land, the Germans:

The Germans

Your debts are how big?

First, let me say that I will resist all the obvious puns and jokes- no talk of Reichs, or panzers, or blitzkriegs; not even as metaphors. In truth, the Germans today are frankly the polar opposite of the taciturn, expansionist, martial image much mocked by 1960's British sit-coms. The 21st century German is highly reluctant to engage in armed foreign adventures, and when they do; well let's just say they no longer display that hard Prussian backbone - they are, after all, the only army whose soldiers have actually gained weight in Afghanistan.

No, today's German is more interested in saving than in sallying forth - and that's where their power lies. While we in Ireland were splurging the cash, using Lamborghinis as garden sheds, burning Manolo Blahniks as a cheap energy source, or occasionally filling our pools, Scrooge McDuck style, with gold coins, Angela was saving - like the cold, calculating monster she is!

What sort of people are these Germans, I wonder, who save in times of plenty rather than engaging in perfectly healthy cash bathing? What sort of inhuman automatons display such disturbing levels of responsibility and forward planning? Look at you there, smug and secure with your steins of beer and low bond-yields:

Who's laughing now, Ireland?

Well we, the proud people of Ireland will accept your help, Germany, but I hope you realise how lucky you are, being given a very important part in the Irish economic miracle. I hope you realise that you're the ones who will benefit in the long run, being able to tap into such dynamic sectors of the Irish economy as building and property development. I bet your Siemens and your Kuehne & Nagel and your Puma's look pretty pathetic now, right, next to the might of heroes like Bernard McNamara and Sean Dunne.

Eh, sorry, what was that Angela? You might not actually give us any money?

Ah, well now, Angela, let's not be hasty! I'm sure Ireland has a lot to offer Germany, em, you know, economically like - the billions of Euro you give us, and the political fall-out for you among the German voters: I'm sure it will be well worth it!

No?

Ok, Angela you want to play hardball? Fine! - if Ireland goes down, we bring the Euro with us, possibly fatally wounding European integration - and that will mean you Germans have wasted the last 50 years on a European project that went nowhere. So you have no choice, Angela, you have to help us!

That's right Germans - your savings are going to be paying my pension!

Woo-hoo! The weakest link - sweetest spot on the chain!

But yes, we know Germany - you told us so!

The End is Nigh Part II

... this time it really is nigh.

The airwaves, newspapers and general office chit-chat have been filled over the last few days with Professor Morgan Kelly's (known to his critics as "Dr. Doom") article in the Irish Times on how Ireland is, well, basically screwed.

This will not be news to most people in Ireland, as it has been a regular fact of life for the last wee while that we are, as a nation, simply broke. What is interesting (and indeed worrying) in Prof. Morgan's article is his point that Ireland is about to to be relegated out of the Premier League of independent states, and straight into the Vauxhall Conference of vaguely self-governing entities that are under the thumb of a larger neighbour:

"The issue of national sovereignty has for so long been the monopoly of republican headbangers that it is hard to know whether ordinary, sane Irish people still care about it. Either way, we will not be having it around much longer."

For a pleasant change, it will not be perfidious Albion who will be depriving us of our independence; this time, we're going to be succumbing to the economic might of Germany.

Of course, this all hinges on the idea that Germany will bail out the Eurozone, and will take up the reins of real (read economic) power in Ireland and the other EU nations that can't foot their own bills. But what happens if the creation of an economic empire is simply too unpalatable to the German voter (as is quite possible)? What happens if Germany pulls out of the Euro, leaving the currency as the bottle-cap of the international markets, suitable only for bankrupts like Ireland (watch this space) and Greece?