Category: Archive

Dublin Report Maverick Ireland becomes Euro policy pariah

February 16, 2011

By Staff Reporter

By John Kelly

It has been a strange week in Ireland. There was not one single theme but several, all pointing in opposite directions, yet all shaping our future in diverse ways. A rare form of national schizophrenia seems to be inevitable.

On one hand, we witnessed the spectacle of the new Fine Gael leader, Michael Noonan, pointing in the direction of galloping political correctness and moral rectitude while refusing to restore his rival Mayo candidate, Enda Kenny, to the party front bench.

The bright, popular Kenny, one of the more presentable young faces within Fine Gael, confessed to feeling disappointed and charged that the party was sending out all of the wrong signals.

By way of a convoluted apology, Noonan explained that this certainly did not spell finis to the young Mayoman’s political future. He outlined how he had been dropped from the front bench in his remote political past. Now, here he was as leader of the second largest party in the state, a taoiseach in waiting.

He is likely to wait a long time. At the press conference to introduce his new shadow cabinet, Noonan refused to throw darts at the Fianna Fail minister for finance, Charlie McGreevy, in the wake of his castigation by the mandarins of the European Union.

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In the crazy, cynical world of politics, opportunities like that should not be passed up.

McGreevy has established himself as being something of a "character" in the best Irish sense among his European colleagues. He seems to delight in doing all of the wrong things with all of the best results.

There is no doubt about the fact that his last budget was inflationary, however slightly. Yet he was unapologetic before his short court martial at the hands of the European Union ministers.

He was so unfazed at the criticism that he did not even bother to point out that he was about to introduce a novel plan to increase personal saving.

The plan, which will give one pound for every five invested over a five-year period, in addition to the standard interest rate, will undoubtedly cut the inflation rate by taking a lot of cash out of the economy.

It has already been greeted with great enthusiasm, especially by corporate bodies like credit unions. Not alone will it cut inflation, but it will also provide substantial investment funds that will allow future governments greater latitude in managing the economy.

The finance minister has proved beyond question that the unconventional solution can sometimes be the correct one. Mavericks occupy an important position in society.

One of the main reasons why so many European governments are casting an increasingly acerbic eye on the Irish economy is because it has bridged the Atlantic gap. While we garner the benefits of the EU, the Irish economy is becoming increasingly attractive to U.S. investment, especially in the high-tech industries.

With the Financial Centre and major tax incentives for European companies, Ireland has also begun to attract a huge slice of investment funds that would have gone elsewhere.

Whatever about European criticism of our economic policy, the Belgian government put the finger on one of the real reasons for the new disenchantment with Ireland.

The Belgians made it clear that they do not regard Irish tax incentives as being in line with the European economic mainstream. In their terms, the Irish government is something of an economic maverick.

Yet the reality is much different. Ireland has always been the first trading post in Europe for the U.S. It is now a natural bridge to the European market especially in terms of high-tech industry.

High educational standards in Ireland have also contributed greatly to this natural progression. Any Irish government would be crazy not to reap the advantages.

In that respect, McGreevy is perfectly right to tell the European mandarins to turf off. The government of which he is part is doing its level best for the benefit of the people of Ireland.

In fact, it is also doing what the earlier mainland leaders of the European Union always advocated. If there is really a problem, the only problem is that it may be doing it too successfully. But that is the Irish solution.

However, it is also something of a contradiction. There is no doubt about that. On one hand, the Irish government puts itself forward as a loyal member of the Union. It has agreed, without any great difficulty, with every step its powerful European partners have taken. There is no perceived reluctance as there is on the part of the UK.

Only when it comes to matters of a common defense pact has Ireland demurred in the slightest. Superficially, at least, it continues to guard its neutrality to the utmost.

Politically, especially within the UK, this has posed some problems.

Why, right-wing Tories argue, should Ireland reap most of the advantages without paying any of the prices?

It is a legitimate reservation. It is also one that some future Irish government will have to face. Europe will not continue to accept the situation as it is, not for very long into the future.

Ireland’s problem in this respect is yet one other contradiction in a long list.

These are only some of the problems that will have to be faced, sooner rather than later.

What makes them different to those in the past is that they are the problems of success rather than failure.

Ireland has not yet come to fully realize that it is one of the most successful and most envied successes among its European partners.

Much attention has been focused on its economic policies.

Huge contradictions are inherent in those policies.

The more politically correct Europe fails to understand the particular problems Ireland faced. Nor does it comprehend the unique and apparently perverse answers the Irish have devised.

The Celtic Tiger remains a great mystery in the forest of the night.

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