February 8, 2011
For the kind strangers in Brussels, Frankfurt and Washington on whom Ireland now relies for funding, the upcoming general election comes with added interest. As political rhetoric ratchets upwards with promises to renegotiate the terms of the EU/IMF bailout, lenders of last resort are feeling a little underappreciated.
Wannabe government ministers are promising to burn the senior bondholders and coax a lower interest rate out of the EU/IMF, drawing a tetchy response from officials. An ECB source made plain that the new government would be wise not to raise expectations as they will “find their options limited in terms of renegotiating”.
The deal, they stress, is a contractual agreement made by Ireland not a contract between Brian Cowen and foreign loan sharks. On top of that, there is a growing willingness to remind the Irish electorate of their role in the policies that fomented the crisis: they voted for it. Repeatedly.
“Blame the deal if you like but Ireland signed up to this model of low tax and a liberal banking regime. People voted for it in several elections, even if they didn’t fully realise it at the time.”
This thinning patience ultimately manifested itself in a wholly uncharacteristic outburst by the President of the European Commission, José Manuel Barroso. The mild-mannered Portuguese law professor delivered an angry riposte to socialist MEP Joe Higgins’ assertion that Europe shares the blame for Ireland’s economic crisis and should share the burden.
Ireland’s problems are of Ireland’s making, offered Barroso bluntly. A simplistic view, surely, but reflective of souring sentiment towards the Irish.
Interesting times ahead then, particularly if voters plump for candidates who truly mean it when they speak of default.Author : Gary Finnegan