Our election is now over for a while at least and we should now shelve the electoral and political strategy and get on with trying to save our economy. Except we cannot do this because another election is looming and it is having an even greater influence on our economic policies than anything ever dreamt up by strategists on these shores.
The German premier is under immense political pressure in her country and is doing all in her power to save her position. Unfortunately we have become scapegoats in her power struggle. Angela Merkel does not care one iota about this country. She does care about her own political career and unfortunately that is now inextricably linked with Irelands economic performance.
Her manic insistence that we keep our banks open at all costs and prevent them from defaulting is becoming more than a little suspect with each passing day. A bank is a business and if unviable, insolvent or unprofitable it should be let fail just as any other business should be let do. In the US Lehmans and Bear Sterns failed and all in all the repercussions were relatively minor. The difference is the US is not beholden to Germany.
If we were to let say the AIB fail then other banks in other countries would no doubt follow suit and this contagious domino effect would fatally undermine the Euro. The Euro equals the Deutschmark in Merkel’s eyes and therefore this simply cannot be let happen. The German voter is angry at our perceived bailout and is also demanding economic growth and this cannot be achieved without a stable currency. It would behove them well to remember that we have simply been given loans at an exorbitant interest rate. Loans from which they will enjoy obscene profits. A bailout it most certainly is not.
Merkel’s domestic position is very fragile and the German resolve in the face of a failed currency will be easily broken. The potential for contagious default across the Eurozone is our therefore our trump card. We should tell her, not ask her that unless the terms of this loan agreement are radically altered in our favour we can and we will bring down the whole house of cards. For a house of cards it is. We are supporting the economic future of a whole continent and paying a financial penalty for our largesse.
The reality is the European banks poured obscene amounts of money into the Irish banks with no questions asked and little or no due diligence undertaken as to their capacity to repay. They were complicit in the whole debacle and have proven themselves equally inept in their ability to manage their affairs. They now have a strategy of dictating terms to Ireland simply to protect their own interest and simultaneously ‘punishing’ us for our economic stupidity. Well stupid is as stupid does and in this they are equally culpable. This is why I call it a house of cards.
Therefore we should take the fight to Angela Merkel. We must insist on what is best for Ireland. We must demonstrate that we will not countenance being made the scapegoats for what was a cumulative failure. We must persuade them that if we are going to go down then we will take them with us.
Enda Kenny, Michael Noonan and Co have it within their gift to destroy Angela Merkel’s career and she knows this. We can demand better terms because she has no option. There will be no negative consequences for us in such a course of action because either way she will not be in power much longer. Such things do not live long in international consciousness. Germany herself has been forgiven for far worse. Our sudden growth of balls would soon be regarded as a storm in a teacup but we would all be in a better place, including Germany.
So the choice is simple. Either we get into an economic war with Germany and if we hold our nerve, win or remain subservient and condemn ourselves to the economic scrapheap and endure generations of penury. I know what I would do.
Pearce Flannery is Ireland's premier business advisor and training facilitator and is an acclaimed conference and motivational speaker.
He believes that to get improved results a business must be open to change from the top down.
This philosophy also holds true for the country!
