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Decisions, Solutions, Delusions

Posted on: December 11th, 2011

Ireland’s euro magic dust was ready long before the deal was struck in Brussels. Enda and Eamon had positioned Ireland as champions of whatever deal was dictated. They were poised to claim it as their own. The magic dust suited any outcome.

Enda and Eamon had told the Dail that they wanted “decisions”. They wanted “solutions”. They wanted “action”. Wow.

The decisions needed to be “clear”. The “action” needed to be “decisive”. The solutions must be “durable”.

All three conditions were achieved.

Eamon told the Dail that the Taoiseach had approached the meeting with an “open mind”. He can say that again.

So open was the Taoiseach’s mind that any result would fit into it. Enda and Eamon wrote their welcome long before the “agreement” was reached.

It is a pity that the outcome was such a minus for Ireland.

Of course, the Taoiseach and Tanaiste could not have known what was in the final package. Neither of them was invited to attend the real action. Just before the fateful dinner, Nicolas Sarkozy and Angela Merkel were due to hold a private meeting with ECB boss Mario Draghi, summits chairman Herman van Rompuy, Commission chairman Barroso, Commissioner Olli Rehn and other non-elected eurocrats.

No reports of the conversations in that meeting have surfaced. Indeed, it is now uncertain (following leaks to Reuters and Bloomberg of the encounter) that it even took place. But it is clear where the real power lay: in the hands of the Franco German duopoly and the top eurocrats.

Enda was sidelined. Small nations are not invited to the top tables. They sign up to loss of sovereignty instead.

The Taoiseach issued a statement just before Thursday’s RTE Nine O’Clock News suggesting that the sustainability of Ireland’s debt was laid on the table.

“Bravo,” we cried. Enda was playing hardball.

Hardball turned out to be soft spinning. Ireland’s debt disappeared from the table as fast as it was laid there. The summit did not give a moment’s consideration to our penury. Ireland was throwing shapes.

The summit went from bad to worse. Our closest trading partner, the UK, refused to sign up for treaty changes. The UK may be isolated, but the consequences for Ireland are deadly serious.

The UK’s financial centre, the City of London, will write its own rules. Ireland’s Financial Services Centre (IFSC) will be competing with a neighbour free to offer far more attractive terms.

The IFSC will lose out. Dublin’s rules will be made by Merkel and Sarkozy. London’s rules will be made by Cameron. If the new group of 17 signs its own agreement, Ireland will be further isolated from a natural ally.

We are certain to suffer further bullying.

Our Government took one firm position. It was lining up behind the need for the European Central Bank’s intervention to support the euro. It wanted to see an ECB commitment to eurobonds.

On Thursday, Mario Draghi put an end to that little aspiration.

Nothing we wanted materialised. Nobody was listening. Our debt is still hideous and unpayable. The UK has left us more isolated. We are committed to signing up for fines if we breach strict fiscal disciplines. We are heading for fiscal union. Despite our reluctance, we are likely to be forced to hold a referendum.

Wait for the Government’s spin to hear how Enda Kenny and Lucinda Creighton saved the euro. And, of course, how — once more — they saved Ireland’s 12.5 per cent corporate tax .

The corporate tax rate was never under threat last week; but the new deal was what Mario Draghi ominously called a “a step forward”.

The next “step” is fiscal union. After that, corporate tax will be in the hands of Angela and Nicolas.

Guess where we go from there.

The writing is on the wall for Irish sovereignty. But at least we saved the euro for a week or two.