Euro crisis: “Politicians have become sheep, not leaders”

In today’s Irish Times Paul Gillespie returns to the topic of the political dynamics in play at European and national levels during this euro crisis.  From the Irish Times article

Ireland is doubly unlucky. Not only is France prepared to play hardball, but there is also no good reason for it to calculate its interests are being damaged by Ireland’s corporation tax rate to any real extent. It is impossible to get a good explanation from any French person as to why the issue has come to be more strongly felt there than in any other country.

If France often forgets that it is no longer so great a power, Germany seems frequently to forget that it is the most powerful state in Europe. The strongest criticism that can be made against Germany – from an Irish or European perspective – is that it has underplayed its powerful hand during the crisis, not that it has used that hand to manhandle small countries.

Apart from the German finance minister attempting to frogmarch Brian Lenihan into a press conference to announce the bailout last November, it is hard to think of examples of Germany leaning on Ireland unduly. This makes recent outbursts of anti-Germany rhetoric, some of which would make even tin-hat-wearing English Eurosceptics blush, appear all the more puzzling.

More often than not during the euro crisis, Angela Merkel has dithered and delayed. Only when matters have come to the brink has she been decisive. This is a cause for concern. Brinkmanship can go very badly wrong.

And, with Greek parties unable to reach a political concensus and the IMF threatening to withdraw its support, elsewhere in the same paper Arthur Beesley warns of the “potential for a dangerous spill-over into weakened countries like Ireland”.

This is perceived to reflect increasing IMF frustration at the monumental standoff between the euro zone’s political leadership, in which a move to ease Greece’s debt burden is gaining support, and that of the European Central Bank (ECB), which recoils in horror at the very notion. “We are at the end of the tunnel but there is no light,” said a diplomat who is involved in the drama.

Crucial here is the political interest of powerful people such as German chancellor Angela Merkel and many of her counterparts, who are deeply reluctant to expand their support for Greece. The vulnerability of European banks to any losses on their investments in euro zone sovereigns is another factor.

Important too is the ECB’s agitation against anything — ie any hint of sovereign default — which might undermine market confidence in the euro zone’s many weaklings or damage its own over-extended balance sheet.

The upshot of all this is endless euro zone haggling over the next step for Greece, very little certainty over what actually happens and a sense of perpetual crisis overshadowing the entire European body politic.

And if no-one backs down at the last minute?

There’s a definite sense of frustration in the reported comments by the Irish Minister of State for Europe, Fine Gael’s Lucinda Creighton.

“Europe falters today because we have become afraid to challenge public opinion. Politicians have become sheep, not leaders,” Ms Creighton, who has been deeply involved in lengthy talks with European counterparts, told a Trinity College Dining Club gathering in London.

“They govern by focus group, by opinion poll and by their popularity ratings vis-à-vis the next election. This becomes more alarming when we recognise that given the multiplicity of governments and elections in an enlarged European Union, the EU is caught up in a dizzying merry-go-round of perennial election campaigns, leading to dangerous levels of populism,” she said.

As I’ve been saying, the question is, do they still all know what to do?  Even if they can’t get re-elected once they’ve done it?

Or will domestic political pressures, in Ireland and elsewhere, hold sway?

And with what result…?

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  • Having thought that all that could be said on the euro crisis has already said, I have noted something new – the savaging of the French in the Irish Times.

    Just putting Gillespie’s criticism of the French in more simplified form, he is saying that because there is no good reason to prevent Ireland keeping its corporation tax, the French are being irrational and the reason for their irrationality is that they want to continue to be seen as the “big boys” in Europe.

    I think it is more to do with the fact that the French have consistently worked themselves into a lather over tax harmonisation, to such an extent, that it has become a sort of creed. Unfortunately, matters are now entrenched. With the French having linkede debt concession with corporation tax, any concession to Ireland at this stage would probably now go down in France as a bad political climbdown.

  • aquifer

    The Brits have long accepted that cash subventions to the peiphery of the UK is worth it in terms of maintaining cohesion. It may also work in terms of maintaining scale economies for providing british goods and services, so that the subventions do not really cost anything.

    Merkel and Sarkosy may be to small for this kind of thinking, but it would be a pity to have Europe have to postpone economic union for a generation.

    The best thing that Ireland could do for europe may be to become very aggressive beggars indeed.

  • slappymcgroundout

    (1) communism = international socialism. fascism = national socialism. Mussolini was once a communist aka international socialist but he saw that in WWI that communists aka international socialists were busy killing each other in the name of nationality and so he realized that international would never trump national and so he became a national socialist.

    (2) you all there have “peace” or “apartheid” walls. Why? British versus Irish, the national question, in the same Euro Union. Mussolini would get the point were he still with us.

    (3) accordingly, until you all stop seeing yourselves as British, Irish, French, German, etc., you won’t have union in any true sense of the word. Mussolini would say that he doubts that such will ever happen, well, he would say that were he still with us.

    (4) for a bonus freebie, ultimately compounding the matter is that you all don’t share a common language. Easier for the US populace to go from seeing themselves as Virginian or New Yorker since what with some marching all over the landscape during Civil War was easy to learn that national boundaries only exist on a map and everybody otherwise spoke the same language. Without the same language, I doubt that even the marching all over the landscape would have sufficed and so we’d likely still be Virginian or New Yorker ih we’d have had differing languages. And you can’t blame politicians for playing to their base. Your gal in dear ole Eire can say that she said since it plays to her base. Let’s hear he say something that does not play to her base, then she can speak to sheep and leader.

  • aquifer

    European peoples have made the decision to downsize their national governments to allow their industries to participate in global market processes with huge economies of scale, increased productivity, and lower average prices, thus raising average living standards. There is no sign that local people want to give this up.

  • Politicians have become nothing more than minor pop stars. Its all about salesmanship and keeping the job so its not surprising that most if not all politicians behave like sheep, if not lemmings.

  • wee buns
  • slappymcgroundout

    Oh, and Pete, the “have become” otherwise reminds me of an anecdote in the late Dave Hackworth’s About Face. Goes in to see his commanding colonel and says, the Army isn’t what it used to be. To which his commanding colonel replies, It never was. So maybe our gal is looking back at the golden era that never was, i.e., she’s mistaking her own increasing maturity and political sophistication for a non-existent change in some others over generational time (as it were).