Ireland's leader Enda Kenny pays no price for bad-mouthing the Irish people

Enda Kenny speaking at the
World Economic Forum
in Davos, Switzerland.

Ireland's Prime Minister Enda Kenny will be speaking at Harvard University on February 16 and if his past form is anything to go by, he will denounce the Irish people as a bunch of over-educated elitists in the hope of eliciting praise from the Harvard audience. Or something like that.

I can hear you from here. "This guy's nuts. No elected leader would do such a thing."

You may well be right about his upcoming Harvard appearance, but ten days ago Kenny did essentially that when he 'explained' to a gathering in Davos, Switzerland that the Irish people "went mad borrowing," which led to "a spectacular crash" in our economy.

When I heard what the Taoiseach had said I was gobsmacked. I fully expected there to be political uproar in Ireland. At a minimum I was expecting him to be forced into some form of ignominious climb-down. I was sure there would be blood.
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I was wrong. A few people made noise arguing that the Taoiseach was wrong, but some popped up to back-up Kenny including the editor of The Irish Times.

Within a few days it was all over. Done, dead, forgotten. The firestorm I anticipated less than a lighted match. Once again I totally misread the political mood of the Irish people.

It wasn't what Kenny said that I thought would excite people. It was where he said it and to whom.

Sure there was some truth in what Kenny said. Many of us did "go mad." There was a fever here in the years running up to 2006/07. People - regular people, not millionaires or whatever - were desperate to own that second home to rent out or to own an apartment in Bulgaria or Croatia. There were ads on the radio from law firms and businesses offering their legal, translation and other services to people keen to own that little slice of the Baltic region. Others spent like there was no tomorrow, usually on their credit cards. I didn't understand it then and I understand it even less now.

However, the madness of the people was more a symptom than a cause of our troubles. And what, exactly, caused our troubles you may well ask?

The old saying holds that success has a thousand fathers and failure is an orphan. Well, in Ireland our orphan - the economic failure - has a thousand paternity suits. Nobody is claiming the baby, but a lot of people are pointing the finger at those who might be the father.

The truth is there were many factors that led to our collapse. Our bankers, our regulators, our central bank, our government, even ourselves all failed to keep in check what should have been kept in check. Too many impulses were allowed to run riot.

However, some of the factors that drove us into this dismal state were external. The people who designed the euro failed Ireland. Europe's banks - the kingpin drug dealers who fed our banks' habits - failed Ireland. The European Central Bank and other European regulators failed Ireland. EU economists and civil servants failed Ireland.

And it was this latter group who were in the audience that day when Kenny pointed the finger of blame as those at home. I still can't believe he did that.

Only a short eight weeks earlier Kenny had gone on live prime-time television to tell us we weren't to blame, but we'd have to shoulder the costs. If he believed it was the fault of the Irish people, that our "greed" got the better of us, he should have said so in that television address. He would have annoyed some people, but many would have acknowledged there was some truth in his view. He would have been seen as providing some leadership.

He didn't do that however. No, he waited until he had an audience of wealthy fat cats, many of whom were complicit in what happened here and whose bone-headed investments in our banks the Irish people were covering, to explain that it was the Irish people's fault.

Implicit in his speech was that those bone-headed European bankers were not to blame. Eurocrats - in the clear too. Same goes for all those involved in the design and management of the euro. He left Ireland to go to an exclusive gathering of the world's elite at a ski resort in Switzerland to tell them not to worry, it was all our fault. They weren't to blame.

This is why I was so sure that there would be a major political backlash against Kenny. Surely such gutlessness would require a price. Surely the press and opposition and the people generally would be all over him, possibly even calling for him to resign. How wrong I was.

Kenny read the Irish public's mood correctly - too cast down to speak up. By doing so he won some friends in Davos. Maybe someday they'll be able to return the favor.

{Photo - Michel Euler of the Associated Press.}

Ireland's Prime Minister Enda Kenny – the wrong man at the wrong time

Enda Kenny addressing the nation
on December 4

The past ten days have shown that Ireland's Prime Minister is not really up to the job of leading the country through the current crisis.

Kenny might have been fine as Prime Minister, or Taoiseach, in less turbulent times, but unfortunately for him Ireland is being tossed about in a perfect storm of national economic calamity and tremendous uncertainty surrounding the European Union and the euro. Kenny gives the impression of having memorized his copy of "How to be Prime Minister for Dummies," but he's demonstrated no instinct for real leadership. He knows he needs to act Prime Ministerial, but does so at the wrong time and goes to ground when the country really needs to be reassured that it's being properly led.

Two weeks ago Kenny announced to great fanfare that he was going to address the nation, live on national television. Initially one of the two national networks balked at preempting their normal Sunday night programming – the X Factor – and announced instead that they would air Kenny's speech on Monday night. Pressure was brought to bear, however, and they agreed to show Kenny's speech on Sunday night, albeit on a delay of half an hour or so.

The news media were all of aflutter. After all it had been 30 years since the last such "State of the Nation" speech. What would he say?

We all knew Ireland is in dire straits economically and financially - was there something about this Kenny needed to address? We also knew the government was due to announce its budget for 2012 the following Monday and Tuesday – perhaps he was going to deliver a bombshell headline item from the budget?

And then there is the EU and the euro. By that weekend there were all sorts of rumors about what might happen with the euro and the EU and what might be the outcome of the crunch EU leaders' summit the following Friday. I convinced myself that Kenny was going to say something big on this topic.
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In the end Kenny said nothing. Nothing new, anyway. The speech was an utter flop. Kenny gave us was nothing more than a summary of what had been in every news bulletin and in every newspaper for weeks. The government 'must cut spending and raise taxes' was the gist of it and there's “uncertainty” surrounding the euro. Oh, and the economic disaster is "not your fault." Gee, thanks.

Fast forward a few days to the EU leaders' summit.

Everyone in Ireland knows the score. We all know that (a) Ireland is one of the smallest members of the EU and (b) our position is made even weaker by the fact we had to be bailed out. We're in a tough spot. We didn't expect Kenny to work any miracles in Brussels.

However the summit was a disaster for Ireland, although there was little Kenny or any Irish person could have done to stave off this disaster. The summit was a disaster because Ireland, as a eurozone nation, is compelled to join the EU's new fiscal union yet our primary trading partner, Britain, rejected the Franco-German deal and will not cede any fiscal controls. We'll be competing with Britain with one hand tied behind our back by the Germans and French. When it comes to EU affairs, Ireland is generally pretty tight with Britain, but Britain now stands at a great remove from the center of EU decision-making. We'll be largely on our own in the EU.

The summit was also a disaster for Ireland because (a) EU leaders didn't come up with a credible plan to end the uncertainty about the euro and (b) Ireland may have to impose a new financial transactions tax that could drive tens of thousands of jobs out of Ireland to Britain, which won't be imposing the tax. There's that competition thing again.

Things are very bad now, but thanks to last week's summit they could get a heckuva lot worse. If there was a moment when the nation needed to hear from Kenny this was it. He should have addressed the nation this past Sunday on what happened at the summit, what it all means for us and what he plans to do now.

Yet we've heard very little. On Friday evening we heard Kenny say that he had told the summit that we are going to "pay back every cent" of Ireland's massive bank debts - even though it's "not your fault" we owe all that money - and that he had "placed that firmly on the table" that we have gone through "exceptional difficulty" borrowing to pay back all those banks debts. That'll show 'em. He also said the Attorney General will determine whether we need a referendum on the EU deal, but even that we won't know for months.

He has said nothing to allay anyone's concerns or clarify what the government's position is with regards to all those financial services jobs that now may be at risk. He's insisted that Ireland's "economic security has been defended and protected," although there's no evidence that any of that is true - whatever it means - and he's offered nothing to back that up.

Ireland's situation is serious and it looks like it may get a lot worse. Thanks to the proposed fiscal union we won't have the flexibility to adopt the type of policies that worked during the late 80s and 90s to get Ireland out of the last recession.

Ireland needs its leaders, especially the Taoiseach, to rise to the occasion. Grandstanding and placing things "firmly on the table" is not going to cut it.

Kenny needs to show that he's out front on these matters. He needs to explain what we may have to accept and what we will not accept. He needs to lead.

Ireland's sovereignty is probably gone for good

Enda Kenny and Angela Merkel
before this week's Irish-German spat

There is uproar in Ireland today following yesterday's revelation that last night the German parliament discussed an Irish government document on its budget for next year. Many people are outraged that our tax rates, welfare payments and other government expenditures were discussed in Germany's parliament before it was up for debate in Ireland's parliament. The Irish government is outraged that the document was leaked.

Why is the government so shocked? The shock is mostly contrived. Taoiseach (Prime Minister) Enda Kenny tried a bit of the tough guy act in Germany yesterday and his German counterpart called his bluff. The budget document was leaked by the Germans as a way of letting Kenny know that he's not in control; they are.

I don't understand why so many others, especially in the Irish media, are outraged. Haven't these people been paying attention? We had to be bailed out back in November 2010. We're still beholden to those who bailed us out. Yet the media is acting as if the implications of the bail-out are a complete shock. The penny only finally dropped today.

"Germany is our new master" is the headline across the today's front page of the Irish Daily Mirror.

Yet, Germany has been "our master" for more than a year. Ireland is not a sovereign nation. We have been giving away bits and pieces of our sovereignty for the better part of 25 years, but all pretense at being a sovereign nation evaporated last year when, essentially, we entered Chapter 11. That's the way it goes.
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The hard truth is our sovereignty is probably gone forever. German Chancellor Angela Merkel has said that in exchange for Germany committing to fixing the problems in the euro she is seeking a fiscal union across the Eurozone (the 17 EU nations that use the euro). This is what triggered Kenny's tough talk - he told Merkel that her plans for a fiscal union were a step too far.

Yet as last night's leak makes plain, we have limited choice in the matter. If the Germans want a fiscal union, they'll probably get one. The only decision left to us at that stage will be do we want greater sovereignty and greater hardship or less of both? We will get a vote on it, but if we vote yes - as I suspect we will - that will mean the end of independence.

We will head towards the centenary celebration of the 1916 Easter Rising against British rule knowing we spent roughly the first half of that century trying to achieve greater independence and the second half giving it all away again. By 2016 we will have completed a century long swap of British rule for German.

Ireland's cowardly government closes Vatican embassy

Villa Spada in Rome
Ireland's Embassy to the Holy See since 1946
{picture from DFA.ie}

Last week the Irish government announced that it is going to close its embassy to the Holy See. Despite what everyone believes, the government claims that the embassy's closure has nothing to do with the souring of relations between the Vatican and the Irish government over scandals in the Catholic Church in Ireland. In fact, Taoiseach (Prime Minister) Enda Kenny "reacted angrily" to the suggestion that the closure was due to anything other than budgetary constraints.

That Kenny and Tánaiste (Deputy PM) Eamonn Gilmore are willing to claim that the closing of Ireland's embassy to the Holy See is due to the need for the state to make savings says more about their cowardice than it does about the state of Ireland's finances. This decision is transparently NOT about saving money.

The Irish government will save €1.2m ($1.65m) with the closing of the embassy. While that's a lot of money to the average Joe, that's not a whole lot of money for a state, even a bankrupt state like Ireland.

Sure the government has to cut back and, yes, Gilmore's Department of Foreign Affairs has to do its share, but it doesn't take long to realize that there are inconsistencies in this tale of budget cuts that make a nonsense of the government's tale.

Start with the building itself.

Ireland's embassy to Italy
{picture from Google.com}

The Irish embassy to the Holy See is in a beautiful building, the Villa Spada {see photo above}, in a beautiful setting on the top of the Gianicolo. Selling that would probably net the government a fair amount, but they're not selling it. No, they're moving Ireland's embassy to Italy from its cheap, rented accommodation {see photo left}into the Villa Spada. If they were serious about saving money they would not give up those cars-parked-in-the-doorway, paint-peeling-off-the-walls offices for a perfectly maintained hilltop Roman villa.

Then there is the Department of Foreign Affairs (DFA) budget.

This same government department that decided it cannot afford the $1.65m for the embassy at the Vatican is still spending over €400m ($550m) on "Official Development Assistance" or foreign aid. Okay, yes, of course we can't simply cut all foreign aid to poorer countries simply because, well, we're bankrupt. We may be bankrupt, but the people in those poor countries who are dependent on our aid still need to be helped, even if it adds a dollar or two or half a billion to our debt mountain.

Fair enough because those countries are really poor. Right?

Well, if they're really poor and need our aid how come countries like Ethiopia, Malawi, Mozambique, South Africa, Tanzania, Uganda, Zambia and Zimbabwe are all able to afford an embassy to the Holy See in Rome when we cannot afford the same? After all, those countries are receiving aid from us, yet somehow they can afford that which we can no longer afford. Will the DFA cut off aid to countries rich enough to afford a Vatican embassy? Of course they won't because the cost of a Vatican embassy is not worth worrying about. If it was only about the money we could probably share office space and administration costs with the Malawians.{Here's a great map of the world showing which countries have diplomatic relations with the Vatican and a resident mission, which is what Ireland is closing.}
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No, it was never about the money. That is a fib they're peddling because they're worried about alienating the still fairly sizable minority here who take their Catholicism seriously. At the same time they want the kudos for taking a populist stand, for confronting the Catholic Church over its mishandling of its many scandals.

How gutless. How wimpy. If they want to make a statement on the Catholic Church in Ireland then make the statement and stand over it. They should take the flak.

They didn't. They used prevarication and obfuscation in an attempt to hide the truth from those 'knuckle-dragging' voters who still go to Mass on a Sunday. It didn't work. Now those same voters feel that the government insulted their faith and their intelligence.

This is what angered Kenny. Everyone saw through the official twaddle to the essence of what was happening. Even those Kenny and Gilmore probably assumed would support them conceded that cost was only a smokescreen. The Irish Times admitted it in the first sentence of its editorial. The Irish Examiner said that by its decision the government "has essentially thumbed its nose at the Vatican."

The Examiner then went even further noting that the Catholic Church's tremendous influence across the globe. This is why the United States has full diplomatic relations with the Holy See. "The U.S.-Holy See relationship is best characterized as an active global partnership on a wide range of global issues."

Mary Kenny in the Irish Independent noted that the list of countries with full representation at the Vatican includes many non-Catholic, even non-Christian countries. Thanks to this decision Ireland will now be "a less important link in the globalized network connected to the Holy See."

This is what diplomatic relations are all about. Even when you are in dispute with another state you try to maintain diplomatic relations. Closing the embassy in a fit of pique is short-sighted. Lying about it is stupid.