Tuesday, 30 November 2010

‘Events, dear boy, events!’

This article appeared in the 'View from the Pew' column in the December 2010 / January 2011 edition of Newslink, the diocesan magazine for Limerick & Killaloe.

… as Harold Macmillan is reputed to have said when asked ‘What do you fear most in politics?’

What an extraordinary week it has been for our country!
The dogs in the street knew ten days ago that talks had begun at official level that would lead inevitably to Ireland seeking a loan from the European Financial Stability Fund and the IMF. It was well signalled internationally by blogging economists (see the excellent irisheconomy.ie blog). But government ministers just kept on denying it. Either they were lying, or officials had simply bypassed them - charitably assuming the latter, clearly power had already slipped from their fingers.

Only after EU finance ministers met did the government admit that ‘technical discussions’ were taking place, but they still persisted in spreading confusion about the likely outcome. It finally fell to Central Bank Chairman Patrick Holohan to explain clearly what was happening. Three days later, on a Sunday, the Government announced that it had applied for a multi-billion euro loan facility. We will have to wait a little longer to know what the terms will be.

As I write, on Monday 22nd November, the government is visibly crumbling. The Taoiseach announced he would call a general election in the New Year, once the budget and the four year plan have been passed, after the Greens said they would pull out in January. But it is far from clear the government can last so long – we may well have an Advent general election. The pace of events is accelerating

The people have been badly served by successive Fianna Fáil led Governments, I feel.
Whatever the merits of the bank guarantee and NAMA, it is clear that the root of our financial problems is the mountain of debt taken on in the Celtic Tiger years. And we were landed with the debt by the golden circle of grasping bankers, megalomaniac developers and venal politicians, symbolised by the Fianna Fáil tent at Galway races. Brian Cowen encouraged the worst excesses when he was Minister of Finance. He is now Taoiseach. Fianna Fáil remains in office. It is almost past belief.

Since the beginning of the year the government must have seen the writing on the wall, as their popularity fell and their Dáil majority shrank. It would have been honourable and in the national interest if they had called a general election in the summer or autumn. A new government with a fresh mandate for five years could then have taken the difficult budget decisions now required, and negotiated the package of assistance we need with our European partners. Instead we have political instability coinciding with a massive financial crisis, which threatens the future not just of Ireland but of the Euro and the EU. By clinging to power this government have made serious problems much worse.

Why were elections not called earlier? Is it possible they have something more to hide? I pray not – but I recall that the Greek financial crisis was triggered by an incoming government discovering that the outgoing government had cooked the books and lied about it.

As we wait for the democratic process to take its course, we depend on the kindness of strangers.
Let us pray for the Irish and international negotiators seeking to resolve the present financial difficulties, that their decisions may be for the good of all. Let us pray for our country, that our people may recover the confidence required for economic recovery, and begin the task of creating a just and sustainable society for the future. And let us pray for all those who are impoverished by this great recession, that their lives may be made easier by the support of those less badly afflicted.

O Lord, guide and defend our rulers – and grant our government wisdom.

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