Republic of Ireland (1949-2010)

Nice quote from the Irish Times to begin the morning:

“When you borrow, you lose a little bit of your sovereignty, no matter who you borrow from.”

So said Brian Lenihan, last Finance minister of the sovereign Republic (sic) of Ireland. From a government that had promoted reckless borrowing, a property boom and general fiscal anarchy, you can either take it as a belated admission of guilt or a unique moment of clarity. I would like to believe there has been a note of shame in the way that the government have denied that talks were taking place like most normal people who break under financial strain. Whoever, I suspect that, as ever, they simply don’t believe the little people should be told what is really going on, so while most senior EU figures are discussing the bailout, the governing coalition of FF and the now invisible Greens are adopting a position of implausible deniability.

Mick has been doing a great job of mapping the various opinions and serious commentary around this in his blogburst reviews (here and here). For those who are breaking under the strain (or their sides laughing) – what status should the Republic now have: Protectorate? Mandate? Economic Zone? Free State? Car Park? Commonwealth? Islamic Republic? Museum of Capitalism? [This list isn’t exhaustive, so feel free to add to it.]

Please support your answers with something light-hearted…

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  • Scáth Shéamais

    ‘Banana republic’ was even an option? (Too obvious?)

  • Scáth Shéamais

    Wasn’t an option.

  • alanmaskey

    There is nothing particularly funny about this. The Irish people wanted cheap money and big pay rises. The good for nothing Irish nurses led the charge on this, helping to put wages and thus prices up right across th board.
    Irish people, most probably including Provo apologists who post here, bought houses on borrowed m0oney and let them out to illegal immigrants, who were smuggled into the country, often with the help of Irish people, some of whom were arrested in the process. Gerry Adams, amongst other sinister players on the Irish scene, made impassioned pleas on behalf of these illegals and, by default, on the Irish who were making money from them.
    The Fianna Fail government is trying to hold on, to get some tough budgets through, so that anarchy does not reign. A number of blogs have ill informed Adams types spouting off and howling to the moon about these issues.
    As the dogs howl, FF try to bargain on their behalf. Though FF might win some concessions, the end result, the desired outcome of those who run the EU, comes closer to fruition. Ireland, like the other minnows, will lose its sovereignty and neutrality will go out the window along with the last semblances of independent thought and action.
    Perhaps we will rise again. But, given the implications on demographics and the plantations that were such an integral part of the boom years, that is unlikely. And that was the plan.

  • Drumlins Rock

    silly boy, thats the existing status 🙂

  • Brian Walker

    Here’s’ the optimistic take from Marc Coleman, writing in the BBC website – blaming the messenger and maybe with a hint of Messrs Pooter and Micawvber :

    http://www.bbc.co.uk/news/world-europe-11768336

    they convey an image of Ireland totally at odds with the reality of a country that last week was voted by the UN human development index as the world’s 5th most desirable place to live.

    The UK was – sorry to point this out – 26th. Our GDP per capita remains 30% above the EU average and well above Scotland, Wales and Northern Ireland.

  • John Ó Néill

    On his Newstalk radio show last night he was quick to point out that the UK has huge deficit issues that aren’t even on the agenda yet. But since we are burying Irish sovereignty this week it would be impolite to discuss that (and it doesn’t seem to be a live issue for the markets at the moment anyway).

  • alanmaskey

    Ireland, like many other places, is a great place to live if you can leech off others. Thailand, the Philippines and much of Latin America are even better.
    http://www.irishtimes.com/newspaper/weekend/2010/1106/1224282773990.html
    Here is a new and interesting book on Irish missionaries. They give an interesting view of Ireland and overseas. Note how one gent, who made his fortune from a dodgy deal with FF, used them for his own gain.

  • DC

    I’m beginning to get this Dublin Spire thing now, it’s really a big Spike in Dublin built close at hand to throw the Fianna Fail government on to and to impale the bankers.

    That’s also why it had to be built so high.

    http://en.wikipedia.org/wiki/File:DublinSpireDusk.jpg

  • Itwas SammyMcNally whatdoneit

    John,

    Tempting as it may be to attribute all the blame to Feckless Fail (FF) given their proud history of corruption and the fact that Berty-the-brown-paper-bag-man as minister of Finance claimed he didnt know how to operate a bank account, we must not forget the important role played by Feckless Gael (FG) who cheered on from the sidelines in the shared belief that what goes up must continue to go up indefinitely.

    Even the normally excellent (and much loved by me) Irish Times (which I turned to on a number of occasions for a dose of sanity) has to take it’s share of blame for parking economic reality whilst it collected advertising revenue for its obese property section.

    And of course the Plain People of Ireland have to take their share of the blame – having demanded nothing but the lowest standards of probity from their government despite the country being awash with corruption tribunals.

    We need the economic equivalent of Jack Charlton, someone not too bright (no cute hoors need apply) but who tells it straight and most importantly can hoof the economic ball to the right part of the pitch and couldnt give a flying feck who likes it.

  • Sovereignty was lost as soon as it entered the Euro. Sure, while times were good that point would be ignored. However, now the terms are plain for all to see, and the terms of rescue will be harsh. Berlin will not be the soft touch that London might have been…

  • Dr Concitor

    Are you advocating conservative values Sammy?
    ‘most importantly can hoof the economic ball to the right part of the pitch and couldnt give a flying feck who likes it.’
    You shouldn’t take David Vance seriously

  • sammymehaffey

    Yours is as sensible commentary on the ‘situation’ as any I have read. Tolerate corruption in the people in power and eventually the whole house will tumble down. Even educated people were prepared to say of C Haughey in the 80’s – ‘sure isnt it better to have a cute hoor working on your behalf in Brussels than some gobshite who is honest’. Quote from head of AIB in Cork.

  • John, ‘Republic of Ireland’ was the UK label for the, er, Republic until Dublin persuaded it to use the ‘Ireland’ brand name. I think this probably happened during the course of the ‘peace process’.

    The electorate voted to join the EEC and the state joined the Eurozone. The state was rolled over on the Nice and Lisbon treaties so it would appear claims to sovereignty have been overrated.

  • DC

    Depends if the people of Ireland enjoy sun ray cures. Now they look to be completely burnt to a crisp by such tactics.

    Of course gobshites are redolent of the gritty working/lower middle classes whereas the cute hoors provide the uplifting platitudes that tickles the fancy of the better-educated, while at the same time lifting up the balance on their own bank accounts / or denying to have a bank account and accepting back handers instead.

    But dontcha all feel better after an uplifting platitude?

    Look where marketing techniques in politics has got us all: bought into pipe dreams with a bankrupt reality as the outcome!

  • Itwas SammyMcNally whatdoneit

    Why thank you Samuel.

    You will notice I didnt suggest we get in someone like Mr Kidney what with Saturday at 5.30 looming.

  • Drumlins Rock

    for all its Europhilia over the years the reality remain the Irish economy reacts and operates on the same economic cycle as the UK and essentially the USA, it does not tie in with Europe, and it is doubtful it ever will, yes both the UK and US are also in trouble now, but its the same type of trouble and the solutions are similar so maybe Ireland should look to realign economically once again.

  • John Ó Néill

    Nevin, maybe I should have completely over-egged the satirical/sarcasm side – you know:
    The Republic of Ireland (b.1949), educated by the church, variously married to sterling, ecu and euro and bore many estranged children who are scattered around the globe. Having lost Organs 2 and 3 in the 1990s, it suffered a long fiscal illness borne with occasional dignity, an attempted foreign policy transplant was rejected by the body but then forced through in an attempt to keep the patient alive. Having begun to lose signs of sovereignty, there was a rapid decline in recent years and legal death is expected to be declared in the next few days.
    House sold. No flowers, by request, just cheese.

  • Mack

    It’s pretty obvious. The state is being forced to take over the assets and liabilities of the Irish banking system. Therefore we are becoming a Bank.

    The Bank of Ireland.

    Catchy. See you on the golf course at 3 lads!

  • Mack

    Nevin, I think the UK label was ‘The Irish Republic’. You almost never hear the state refered to such down here (Republic of Ireland is much more common) – but you’re right of course the constituitionally correct name is Ireland.

  • Dr Concitor

    Look where marketing techniques in politics has got us all

    DC you weren’t thinking of Gerry’s descent into marketing speak.

    ‘Gerry Adams has said the Sinn Fein brand is strong enough in west Belfast to retain its Westminster and assembly seats without him’.(BBC)

  • Mack

    they convey an image of Ireland totally at odds with the reality of a country that last week

    Actually that’s one of things people have been laughing about (well, what else can you do?) . You get images like these – supposedly representitive of Dublin today??

    http://www.spiegel.de/images/image-151943-galleryV9-pube.jpg

    or worse beggars, maybe with a tin whistle.

    McWilliams’ article was good today. We have a bust banking system, our regulators and government failed, but we’re only a small state in the world’s largest economy – the ECB failed in it’s responsibilities too. The British and German banks who added fuel to the fire are more responsible for this mess than the average Irish citizen. This is becoming an existential test for Europe. Foisting the entire cost for private debts onto Irish citizens is a deal breaker on Europe for me. I’ve voted yes on every treaty so far, I’m hoping that that can continue. Let’s see what happens now I guess…

  • Fergus Pickering

    You wanted Berlin in 1939 but that one didn’t work out. However, you are going to get Berlin now and an iron lady whose heel will stay on your neck for ever so long. I suggest you resurrect the punt, default and devalue. It seems to have worked for Iceland. If you give up your tax haven status you will have nothing. Except drink and dreams of course, but you always had that.

  • John, I was just adding a few stray insights as per the Slugger tin 🙂

    Perhaps its worth noting that when you mock the Government you mock those who elected them and those who behaved equally recklessly during the Celtic Tiger era.

    If I wanted to mock I suppose I could suggest the South C bubble was bound to burst with all those pricks running it. This metaphor draws on the comments made at the time that Branson ditched off Rathlin Island.

  • Dr Concitor

    Perhaps Ireland should offer itself for sale to China. They will pay a high price for tiger bones. This should appeal to SF, a socialist state with a strong business ethos. Máirtín Ó Muilleoir
    for example should fit right in.

  • anarchaeologist

    Airship One?

  • Mack, ‘the Irish Republic’ might have been the conversational term but ‘Republic of Ireland’ was used on UK official documents. The UK and Irish versions of the Anglo-Irish Agreement differed over these state labels; it was still used by the UK in 1993.

    Back in the early 90s I had a chat with the Department of Foreign Affairs and the Taoiseach’s Office about the confusion surrounding the two uses of Ireland. Most of the junior staff I spoke to would indeed have named the state ‘the Republic’ but the Heads of Protocol used Ireland. I got a great reaction from the TO’s Head of Protocol; he blamed the DFA: “They were bloody well supposed to have sorted that out”. Such a comment from a senior civil servant surprised me 🙂

    The folks in Stormont at the time were much more diplomatic. I also raised Tony Blair’s self-description of his title on several occasions as the Prime Minister of Great Britain. A staffer pointed out that such use was for the benefit of foreigners – he’d used it in Paris :).

  • We could just default and run balanced budgets in the future.

  • DC

    Mack that isn’t true, the Irish banks are responsible for flooding its own national economy and housing market with too much global credit that couldn’t be sustaned properly. I’m afraid to say, but look closer to home.

    At a personal level I could walk in to Tesco and buy 100s of litres of vodka and drink it all and die, but blaming Tesco for putting it there plus trying to blame government regulations for allowing so much to be placed in store for the locality isn’t going to get round the fault from my own personal actions.

    Wall Street got drunk and ran over the Celtic Tiger.

  • DC

    But what I will say on second thoughts is that the credit supplied was faulty, like fake petrol or alcohol promising 40% proof but getting only 15%, so I do understand that systemically I reckon large amounts of the debt should be written off.

    A haircut you might call it.

  • There is a solution for Ireland but it is politically impossible. It is for Germany out of the Eurozone. That would mean the Euro would fall dramatically and Irelands’ and the debts of other European countries would be relieved overnight. Their exports would suddenly be able to compete for business. Some commenters will remember this article from George Soros a few months ago in which he stated what would happen if they did:

    http://citywire.co.uk/money/george-soros-what-would-happen-if-germany-withdrew-from-euro/a409352

    “…the euro would plummet. The rest of Europe would become competitive and could grow its way out of its difficulties”

    This is what George Soros has said would happen to Germany if it left the Euro.

    “‘The restored Deutschmark would soar…… but Germany would find out how painful it can be to have an overvalued currency. Its trade balance would turn negative, and there would be widespread unemployment. Banks would suffer severe losses on exchange rates and require large injections of public funds.

    Nobdody should be fooled by the German man-on-the-street’s view that they should not have to bail out the other countries with their hard earned cash. Their politicians know exactly what they are doing. They are exercising German hegomany over Europe – something their forefathers achieved for a just few years by war 70 years ago.

    The difference is, Ireland has been conquered and from now on will be ruled from Berlin through the its Brussels puppet. It cant even look forward to setting up a resistance. So what should Irish people do?

    Accept the reality that it is bankrupt. Tell your politicians to stop fooling them. Tell them to accept that the Eurozone is a dead duck and offers no hope for national self-esteem or economic prosperity. Tell them that they only way forward is to grit their teeth and demolish the European dream. Tell them that Ireland has to commit itself to leaving the Euro and, if it does not get its way, the European Union altogether and further that Ireland will honour its debts on terms that the euro debts are converted into punts. If those terms are not accepted, Ireland will leave the Euro anyway, default on all its debts and call in the IMF. In the latter scenario, they would be controlled by the IMF for almost a generation but bondage would not last forever, unlike remaining in Europe. At least the Argentinian model provides hope.

    By the way, the proposal I have suggested here would not, strictly speaking, be in the interests of the UK but the UK would have to accept matters if Ireland was sufficiently determined to go along such a path. Ireland should, at the same time as negotiating the above deal, negotiate a side deal with the UK to pay off its sterling loans in the new (obviously devalued) punt. The UK could (just about) take that kind of a hit.

    It is time for Ireland to become Eurosceptic. It is time for a new political leader in Ireland to advocate the unthinkable.

  • If you could put an air to this, Mack, it’d be worth singing:

    “The British and German banks who added fuel to the fire are more responsible for this mess than the average Irish citizen. This is becoming an existential test for Europe. Foisting the entire cost for private debts onto Irish citizens is a deal breaker on Europe for me. ”

    Spot on.

  • Mack

    DC –

    I don’t deny that, but AIB is not Ireland, RBS is not Britain neither represent their citizens. The citizens do not sit on the board. While the national regulators are supposed to protect their citizens European instituitions also have a smilar duty. But yet banks domicilled in Britain and Ireland issued dodgy loans (British and German banks issued the loans to Irish banks and Irish banks issued them to Irish developers).

    The important point here is that you their bad loans and unfortunately someone is going to have to pay for them.

    There is no moral reason for that to be Irish citizens. Ireland needs a banking system, so there is an incentive for the Irish to spend money to protect or regenerate that. But Irish citizens are no more responsible for losses incurred by Irish banks than they are for losses incurred by another private investor. They certainly aren’t responsible for losses incurred by British and German banks, why they are bailing them out aswell only the Brian’s can answer..

  • joeCanuck

    If Lenihan’s statement is true, there should be a fairly short list of wholly sovereign nations.
    Bow down before the bankers. Goldman Sachs rules.

  • qwerty12345

    Actually, Ireland’s problems are BECAUSE they followed the model that US financial institutions dictate to the world. Perhaps we should follow China 🙂

    There are gonna be some hard times in Fermanagh now the cash cow is dead 🙁

  • I’m with the dissenter. The Republic died when the Euro was born. Ireland has been ever since, and will continue to be, the Celtic Province of the Brusselian Empire.

  • DC

    Mack yes you’re right I just read your post too quickly and thought it sounded like you were trying to extricate the Irish banks from the credit supply problem.

    I agree with you, it seems there has been credit released – or decades worth of credit, basically debt, has been brought forward between 2001-08 using the financial markets, the top percentile have taken the actual wealth out of it – perhaps the top 1/5th say as an example, they have the real cash in their pockets upfront – while the bottom 4/5th of that credit pyramid has collapsed. The bottom 4/5ths to be serviced by the taxpayer. Now compounded by having to borrow more debt off the EU to service the (faulty) debt released between 01-08.

    As I’ve said before, there is a limit beyond which the Irish state ceases to be effective and paying off global debt (created out of inefficient global credit markets) using Ireland’s territorial taxpayers appears to be it.

    Especially whenever the credit formulae and such financial instruments (ab)used by financial markets had – shall we say – ”engineering deficiencies’.

    Privatising profits and socialising losses sucks, especially whenever the profits weren’t really profits after all, but the tip of the debt mountain which was paid up front in hard cash to the lucky ones.

  • DC

    The Masters of the Universe.

  • Brian

    3things>

    1.) Hopefully this will bury the civil war parties once and for all and get them replaced by ideological parties.

    2.) Relics in Northern Ireland will realize the issue of a UI is hardly at the forefront of people’s concerns

    3.)What would have happened if the Irish govt refused to make the bank debt (or at least a portion of it) sovereign debt? Complete economic collapse? Another Great Famine?

  • Brian

    I like it. Is it possible? Someone advocating something seemingly so radical would be shouted down or drowned out.

    (one thing-Soros isn’t an economist is he?)

  • pippakin

    We are in the shite no matter what. I would rather (call me fussy) it was our own shite.

    Its going to be difficult for anyone to recommend the EU now. It seems to me we would be better off running to the IMF, definitely no worse off.

  • DC

    Unfortunately Seymour ignores Realpolitik.

    Germany *is* Europe.

    http://www.ip-global.org/2010/11/01/germany-is-europe/

    But such a request mooted by Seymour would answer the questions posed by the writer of the above article:

    Consequently, it is surprising that no one in Germany, neither in the press nor politics, has recognized that we Germans have long been Europe. Why are we conducting precisely the opposite debate in Germany? Why do we feel ourselves continually exploited as Europe’s paymaster, deceived by Greece and generally taken to the cleaners by Brussels? It is hard to explain to my Magyar friend that Germany sees itself as one of Europe’s victims. For the rest of Europe, Germany, as export world champion, is in the process of making a huge profit at the expense of the other Europeans while simultaneously, at the political level, relinquishing its European responsibility. The bias and asymmetry of the discussion is unbearable.

    Germany has become autistic. It has abandoned its ability to enter into dialogue within the European region, precisely because it has failed to adequately perceive its own position….

    …The other European partners deserve a clear statement of what -Germany wants for and from Europe—what leadership role it is willing to assume and what price it is prepared to pay for Europe.

    Kind of like saying – “why not unite Ireland” – well because the power of the British and Irish sovereigns have placed that responsibility on others. But the power of sovereigns is not weight-free and whimsical like Seymour suggests, neither is such power attained easily nor asserted willy-nilly – the power is derived from years of work, toil, death, manoeuvring and it also contains layers and years’ worth of public opinion all wrapped up to form one big vested national interest.

  • Cynic

    Only because the Irish are paid in Euros which they cannot afford any more. That is their problem. If they still had the punt it would be down below 50p by now and the problem would be less

  • Reader

    DC: But what I will say on second thoughts is that the credit supplied was faulty, like fake petrol or alcohol promising 40% proof but getting only 15%, so I do understand that systemically I reckon large amounts of the debt should be written off.
    The credit was supplied in Euro, which is still worth pretty much what is was worth when it was borrowed. If people chose to piss that money up against a wall, or spend it on property worth a fraction of the asking price, that’s their own fault. They should have stuffed the money under the mattress instead.

  • John Ó Néill

    Fáiled Political Entity?

  • Brian,

    I have been told that I ignore Realpolitik. Not so. A Nation will make sacrifices in proportion to what it is prepared to lose or fight for.

    At the beginning of 1936, Hitler’s Germany occupied the Rhineland in defiance of the First World War Treaty. At that point in time, Germany was not militarily strong enough to win a defensive war against the Western Allies. Yes, it would have been painful if the Allies had gone to war then but much better than what later happened. Now, where was the Realpolitik at that piont? Well, if I we went back to 1936 in a time machine and advocated that we went to war with Germany, somebody like DC might well have said to me that I was ignoring realpolitik.

    OK, that is not exactly comparing like with like. However, the time before 1936 is comparable in this respect. At the moment, the German domination project is not yet complete. They need an amendment to the Lisbon Treaty to give these extra powers to “deal with” Nations that break the rules within the Eurozone. The leaders agreed in principle to that new treaty over the Halloween weekend. This is something Germany needs and the Irish have a last opportunity to twist its tail.

    Now who is ignoring Realpolitik?

    Your third question above is an interesting one. When the Irish Government made its move two years ago to guarantee the banks, they were the only people in a position to make an informed decision. The trouble is, politics came before National interest. They gambled on the property market reviving and they lost. What is certain is that before they made that decision, they had more power than they had now.

  • Cynic

    Brilliant!

    Unfortunately passed the contagion on to three neighbours before it died!