Lenihan Knows One Thing about Bank Bailouts - Do as the EU Says

Article excerpt

Byline: the Mary Ellen Synon COLUMN

ODD, this. Just about anybody in the country is willing to hang a banker. And just about everybody in the country is furious that the Finance Minister has been letting bankers direct his policy on the bailouts. But almost nobody is furious with the people who are orchestrating the whole multi-billion outrage: I mean the European Commission and the European Central Bank.

Sure, Mr Lenihan has been led by the banks into just exactly how he should save them from default, how he can take their bad loans off their books, how he can force taxpayers to take on tens of billions in debt to save the banks from their own greed and stupidity.

But who is telling Mr Lenihan to do it? The Commission in Brussels and the European Central Bank in Frankfurt.

So if you are angry with bankers, do indeed form up a mob to march on the bankers' gulch of Foxrock and burn the lot of them out. If you hate the Finance Minister's policy of capitulation to the bankers, go right ahead and wait for the next general election and deliver a humiliating defeat to him and the rest of the Government.

But you need to understand that such action will still leave the big bosses of the bailouts untouched.


For the big bosses are not in Ireland. And they will still be in charge, whoever forms the next Government. You can't burn them out or vote them out. They are the elite of the EU, and they will go on controlling Government banking policy.

What is it they want our banking policy to do? They want it to operate in the interests of the survival of the monetary union, not in the interests of the survival of the economy of this country.

If we were to let even the cursed Anglo default on its investors, Ireland might be forced at last to make the wise decision and demonstrate that a country can indeed leave the euro to save itself. The EU will not allow that. Brussels says the eurozone must be the Hotel California: you can check in any time you like but you can never leave.

This is why the most enlightening quote of the week was actually a line buried in the Sunday Independent yesterday. A long way down a report on Brian Lenihan and others, the reporter just mentioned something Brian Lenihan said following a party conference in 2008. Mr Lenihan told the reporter he had been caught up in partying hard, and so had missed a telephone call from Jean-Claude Trichet, president of the ECB. Mr Lenihan continued, saying he did not get around to returning the call until the next day, 'a conversation during which he was told to protect the banks at all costs'.

The reporter didn't grasp the implications of the line. Instead, he went on that he was not interested in 'the subject matter of the conversation' but that, 'in his revelry,' Mr Lenihan had missed the call. Alas the reporter missed the story. That was not the Taoiseach giving the minister his orders, it was the unelected president of the ECB.

And such members of the EU elite will go on giving orders to our ministers until some political leader emerges here who has the spine to say to Brussels and Frankfurt, 'No more.' But just look at Fine Gael and Labour and tell me what you think the chances are of that happening. Exactly.

So our Government's policy of saving the banks 'at all costs' as Mr Trichet demands -- at the cost of emigration, the cost of the destruction of small businesses, the destruction of public services, of the destruction of jobs and investment -- will go on. What we have now is a permanent Government, and it is in Brussels. It is made up of people who have no loyalty to Ireland and who never face an election.

It is this unelected EU elite to whom our Finance Minister turns for his orders. It is they, and not the Cabinet, who set Government policy on the banks.

Perhaps you noticed that after the minister's announcement last week of the Government's decision to split the bank and his insistence this decision offers the markets the kind of certainty they are looking for, the Commission chilled the whole effect with a single statement. …