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First published 6.30AM
PHILLIPE LEGRAIN DOESN’T speak like a typical Brussels official.
He could never be accused of being vague or diplomatic. Take, for example, his analysis of what caused the European financial crisis.
“It all stems from the capture of governments by banks.”
Refreshingly blunt from a man who spent four years as a close advisor to European Commission President Jose Manuel Barroso.
There’s no whiff of bureaucratese from his assessments of European officials (“incredibly arrogant”), the election of the EC president (“a farce”), or the claim that austerity is responsible for economic improvement (“nonsense”).
Neither is he anti-European. In his own words, he thinks the EU is a “fantastic thing”.
What he wants is a revision of what he says is the fundamentally flawed and unjust approach European institutions took to solving the crisis.
Banking interests
“The Eurozone was meant to be a community of equals all sharing a currency. In fact, Eurozone institutions, not least the ECB, see themselves as the institutions that represent French and German interest, and in turn the interests of the banks of those countries.”
The first mistake, he argues, was linking banking and national debt.
“(When) bad lending between banks becomes and obligation between governments, that’s what fundamentally changes the whole nature of the EU.”
Partly because of arrogance, but largely because restructuring Greek debt would have implied big losses for the French and German banks, a decision was made to breach the legal basis on which the Eurozone was founded, the no bailout rule.
Legrain argues that the same rule was applied to Ireland.
Look at how banks in Ireland were treated relative to Cyprus. In Ireland, the creditors were British, German, French banks and investors. Therefore you say the government must provide a full bailout to those creditors.
“In the case of Cyprus, the creditors were Cypriot and Russian depositors, so it didn’t matter.”
Missed opportunity
The crisis, in addition to being poorly handled, was also a missed opportunity.
“That’s the tragedy of this crisis. This is a crisis that could have united Europe in an attempt to curb the over-mighty banks that got us into this mess.”
Instead, it has divided Europe, pitting creditor countries countries against debtor countries, and with EU institutions becoming instruments for creditors to impose their will on debtors.
His new book, European Spring, says that there must be a roll back and reform of Europe as it currently exists. The current state of play, he argues, will do nothing more than drive a wedge between Europeans.
“We’re in a position where we’ve gone down the wrong path, and going down the wrong path has eroded support for the EU and for closer co-operation, which makes it difficult to make the changes that are necessary.”
We need to have greater decentralisation, and then, when the popular support exists, move to a better system. The system we have now is economically dangerous and politically poisonous.
Ireland-then and now
Despite Ireland’s own reckless governance and lending during the boom, he says that without the link between the banking system and the soverign, our downturn would have been briefer and less painful.
“Whatever part of the blame Ireland has for a crazy property bubble, which would inevitable have led to a recession and bust, it didn’t have to be exacerbated in the way it was.”
The decision to use government funds to bailout Irish banks was “clearly and unjust” one, he says. And Ireland should do everything in its power to rectify the consequences.
“If you’re Ireland, you should play hardball. Next time that there’s a big decision that requires unanimity, you should say you’ll veto it unless you get official debt relief.”
The relentless application of austerity in Ireland is “perverse”, he says.
“It should have been delayed and it would have been much less. Going on collective austerity at a time when the private sector is trying to repay debt…you end up with unnecessarily deep recessions.”
Hoping for reform
Barroso brought Legrain in after seeing him on television speaking in opposition to European policy. He was working at the London School of Economics, having spent several years as a journalist with The Economist.
Hardly a radical’s CV, but he does think that a dramatic solution is needed in Europe.
“Hopefully the elections will be a wake up call. The huge vote for extremists, mostly of the far right, will serve as a wake up call.
If it doesn’t, then one has to hope that mainstream politicians and a wider campaign will convince people that change is needed.”
The outlook, he says, is grim without change. He paints a picture of a democratic deficit at the heart of Europe that will widen unless it is tackled.
“You ought to have much more democratic accountability and much more democratic choice about the future of Europe…if we are going to co-operate more closely, then we have to have proper democratic control and the right to change course.”
If you don’t accept that, then I don’t think you can have the current level of integration. Either we need to restore powers back to national governments or we need to have much more accountability at European level.
Ultimately, he says that an honest assessment of the direction taken during the crisis is the only way to preserve the European project.
“To pretend that things are fine, and that no mistakes were made, that people are deluded if they disagree, is not pro-European, it’s foolish. If you genuinely want Europe and the Euro to succeed then you have to be honest about what’s gone wrong.”
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There you have it from an EU insider. The Irish government are spineless hat doffing traitorous cowards who do not work on behalf of Irish people.
When the titanic was heading towards the iceberg the lookout’s call was to late. The captain steered as best he could sheering the side off the ship. This guy is the lookout.
More like once the ship hit the iceberg he told everyone not to worry he would radio for help and man the lifeboats. He never radio’d for help, never manned the lifeboats but grabbed his own lifeboat and left all remaining souls to perish.
Sesn the Titanics captain had retired for the night when it hit the berg, sorry am being pedantic but what you say is totally right, this guy is the lookout but our spinless Merkel-loving captain Enda Kenny is well and truely asleep while MV Ireland tears itself apart. He is also correct in saying that the government should stop lying on its belly and get up and fight! We have a wonderful opportunity in a few days time to show these self-serving cretins what we think of them so far…lets wipe them out at the ballot box!
Thats just the stare gus,well said my friend.then we must reverse this invasion of our beautiful country,no more Irish passports with every happymeals.HALT these bogus swearing in ceremonies .Revoke these 30 pieces of silver lottery judas pensions being paid to these traiters in labour ,ff and fg ,along with these planners,bankers ,nama heads .IRELAND MUST BE NATIONALISED AGAIN
What a stroke of luck!
A book out just in time for European elections that bigs up Europe.
But Europe or the Euro isn’t the solution it’s the disease. The fact that so many euro area economies simultaneously collapsed wasn’t a coincidence.
” The disease afflicting Europe today has been brought on by years of money mismanagement. An inflationary policy directed by the ECB in Frankfurt spread throughout the countries using the euro. As the ECB pursued a loose monetary policy, high inflation countries – the PIIGS of today – saw real interest rates drop to the lowest levels in a generation. It is no surprise that the housing boom was most pronounced in exactly those countries with the highest inflation rates during the boom years – Spain and Ireland.”
David Howden
Well said let’s visit the pain on them at the ballot box and shown them that the Irish people will no longer stand for being the whipping boy’s of Europe.
He’s spot on and summed it up simply. Who is listening to him in Europe though…
Our government/media should of been shouting this summarisation from the roof tops..
Strange that they didn’t & still not….
This guy seems to know the game pity he is five or six years too late.
The chances of any Irish government playing “hardball” are zero.
Particularly one that says it “pay back every last red cent” to unsecured bondholders.
To get any relief, we’re going to have to rely on other countries to play hardball, and then no doubt the political elite in this country will play it like they were responsible.
Chances are the entire project will collapse soon anyway, and we’ll be part of the collateral damage.
My friends in Ireland its too late ,this deliberate bankrupting of our country by these traiters in in FF,FG,and the labour party to feed our country to the wolves is coming home to roost .These traiters at the same time paralysed our own people with debt ,then instigated an utter invasion of our beautiful country,all in the name of this monster EU ,this invasion MUST be reversed ,not by these traiters in the three judas parties ,but by the Irish people THEMSELVES .The Irish people must leave this monster EU ,we must reverse this utter rape and pillage of our country by these foreign nationals by force ,it is the only way .GIVE IRELAND BACK TO THE IRISH ,OUR COUNTRY IS NOT FOR SALE .THEY DIDNT DIE FOR NOTHING ,ARE YOU LISTENING YOU TRAITERS IN LABOUR ,FF AND FG.TO ARMS IRELAND ,TAKE YOUR COUNTRY BACK
He is looking for a “Dramatic Solution”
well he has one now, UKIP ,
its too late now for the EU , their time is up
after the European Elections , anti EU parties will set about dismantling the European Project
Strang this report didnt even make any news media ,not a dickey bird from RTE or TV3 ,no radio ,no papers eh I wonder Why ,any onecare out there
The Irish have been lied to by successive Govt. and all types of groups IBEC etc. Vote yes for JOBS RECOVERY ETC> This guy is saying what I have been saying and canvassing about for nearly 20 years. The EU as an economic equal partnership is a great thing. It has been designed to slowly take away power from all the nations involved and create a federal state run by the banks. Our Irish “leaders” are a traitors for leading us down this path > YES YES YES SIR 30 BILLION BAGS FULL SIR… This EU can be fixed but we need our own leaders to want to fix it. Our leaders are either corrupted or stupid not to want to fix this, either way we are Donald Ducked… VOTE THEM OUT… Ireland play hard ball the euro zone needs us it cannot survive if members are to leave and tell them to shove there €30 billion where the sun don’t shine…. THR IRISH NEED TO VOTE IN PEOPLE WHO WILL CHANGE THIS If they don’t then we have what we deserve ( as a democracy I have to accept this) SHAME ON FF FG LAB PD GREENS ( nice big eu jobs with benefits though)
Excellent summation of the current situation and the route taken to get here. The country needs domestic growth and an end to austerity. We have been ill served by the politicians in this country. We can still threaten to pull the plug by taking a vote to leave the euro. Can we have our country back please, we have future generations to think of.
And while we are at it no bureaucratic/political pensions till 65 and if you were crap at your job, then it will reflect that!!!
Yeah nothing new here that the ordinary man on the street doesn’t know.
Fianna Fail created the mess and where strong armed into the bailout but Fine Gael really stuck it to the people of this country.
They where a newly elected government with a strong mandate from the people to go Europe and say no deal. Instead Kenny doesn’t want defaulters wrote across the Irish name.
Don’t forget “sure the Irish went mad”! That was Kenny’s opening salvo to the EU. We were fed to the wolves by our own leader.
Kenny is weak and a front for his European “betters” – his attitude is not surprising considering he plans to retire there in 2016 after the inevitable mauling in the general election.
That and his condescending arrogance at home (lecturing us on TV like school kids) while he defends his good mate Alan at all costs show just how badly we were misled in 2011.
Clive, like many other commentators you put forward an analysis devoid of reality and balance. Blame the lender and don’t repay loans.
Be rational.We took ownership of banks because we wouldn’t have had any if we didn’t, not because we loved them. Our whole economy depends on banks. If they crashed what would business do for overdrafts, salary payments and trade the following morning? Where we we put our cheques?Borrowers couldn’t repay loans so a restructure was needed. Bond holders are in the main private pensioners so screw them?
Liam,
Who created a situation where that could happen in the first place? Terrible economic planning by the government and reckless lending by the banks created a bubble which would only have one outcome. In any other business model, if you trade recklessly and bankrupt yourself it’s your own fault. Private firms should not hold enough power to destroy an entire national economy from their own failure in the first place.
Liam…rubbish comment re ownership of debts…one word. ICELAND! They had the courage, our spinless ejiits did not! Whats the point of staying in the EU anymore anyway if we are still in hock for generations to come?
Maybe a new 5 point plan is needed how about this one .1 Default 2 Depart 3 Devalue 4 Deport 5 Detain the politicians politicians who have abandoned our people and betrayed our country.ARREST AND DETAIN those who destroyed our way of life and instigated an INVASION of our country .That these traiters are allowed to govern our country and walk the streets .TRAITERS ONE AND ALL
Sinn Féin.
The elephant in the room.
Jason it was done on purpose ,watch out for the drip ,drip paying back of the bank debt ,it was planned many ,many years ago .Ireland must leave this monster EU ,we must retake our country back ,by force if necessary
Maybe paul ,but i cant remember much critisism by Sinn Fein on the EU lately ,correct me if im wrong
Liam are u listening to this man a top advisor in Europe even agrees Ireland got screwed over all we really needed was leadership with backbone we had all the cards to stop the run Germany and France made on this country to save there banks that gambled here simply the EU Only works for the few.
Liam are u listening to this man a top advisor in Europe even agrees Ireland got screwed over all we really needed was leadership with backbone we had all the cards to stop the run Germany and France made on this country to save there banks that gambled here simply the EU Only works for the few.
Demand debt relief. Vote David Hall. Government went against the people. No to anymore charges.
What a stupid thing to say. Vote in one independent TD – then the whole country will be offered debt relief?
You’ve really fallen for the false promises.
Good point Harney, I’m all for change. I think people have to be realistic though. Having said that I’m not sure what the average person can do??
The traditional parties won’t take on Europe and independents by their very nature are not a unified force which can bring the EU to the negotiating table. The only way to get debt relief is to vote in a new party.
It smacks a bit as a book launch. It’s always worth considering when someone from high places agrees with your objections but that biased, isn’t it? One thing that rings true is the lack of accountability and his prediction for where the votes will go. In Europe he predicts it’s to the right and in Ireland I predict it’s to the left( if SF are true lefty’s) and independent candidates. Lack of accountability is pervasive in Irish life, we wrote the book on that. Take a look at the last few days, the government is acknowledging an issue with medical cards, finally giving people an indication of water charges and the sublime minister for justice begs to differ after breaking the laws of the land. If we did as much thinking before we jump off the cliff as we do afterwards, we might get somewhere.
Phillips Legrain. Must remember that name. Enda Kenny and his “cabinet” would loathe this man.
You might want to spell his name right if you intend to remember it.
We have to look at ourselves and ask How were we bullshitted into reversing our NO votes to NICE and then to LISBON… We were lied to about these treaties and we fell for the bullshit that was spouted out in order to scare us into voting YES… NOW WE KNOW THE TRUTH LETS VOTE OUT EVERY SINGLE PARTY THAT BULLSHITTED US……. GET OUT AND VOTE ON MAY 23RD……..LETS CHANGE THIS GAME LETS WAKE UP AND BE PART OF A BETTER EUROPE> A EUROPE OF EQUALS AND A EUROPE OF THE PEOPLE FOR THE PEOPLE NOT A EUROPE OF ELITES FOR BIG BUSINESS>>>>>>>>
He’d wanna be careful talking openly about the daylight robbery the IMF are doing, he might end up having an “accident”.
True, its always good to damage a mans reputation, unfortunately that wouldn’t work with any of our politicians :). A lot of bankers belonging to goldman sachs and jp morgan have been “suicided” recently, there’s something goin down.
How come he still doesnt advise Barraso?
Probably disagrees with him too much.
Misread the headline and thought this was a Eurovision story. Very disappointed.
If you’re Ireland, you should play hardball. Next time that there’s a big decision that requires unanimity, you should say you’ll veto it unless you get official debt relief.”
We tried that once.we were told by Brussells to “Vote again…Or else!” Also we need a pack of Irish wolf hounds in Brussells not a bunch of tame lapdogs that allow them selves to be patted on the haed like our current little doggie there.
Totally agree. Kenny getting a pat on the head from Sarcozy made me cringe. The first eurosceptic party to emerge will get my vote.
Give him the job.
Lots of EU heads of state know and realize the painful truth ,what they don’t know is how to enact a solution and also manage to get reelected .
Even with the hindsight, the bailout would have happened over again, let’s not be naive about it.
People who were making decisions “on behalf of the country” were really making them on behalf of large Irish investors, which they are themselves too.
So, there is a glaring conflict of interests – how would you expect politicians hemorrhaging personal investments put forward a decision that would have made them and their election sponsors to do harm to themselves?
There is total lack of care about the State as a whole, only about careers and potential move to juicy EU positions.
Enda will not like this.
I like Ireland
We all like Ireland, in fact we Love Ireland – which is why we are all so bloody angry!
Michael O’Leary for EU president!
This is the first bit of sense I’ve heard in a while.
Unfortunately, too late.
I stood in GE 2002, inspired by the late Tom Gilmartin and blew thousands to get 500 votes – nobody wanted to listen about corruption and cartels back then. Same in LE 2004.
I protested the bank guarantee with a placard in my local market square the morning it was announced, just about nobody I talked to understood what I was saying – that there was 400 billion on deposit and where would Ireland get that amount, given our entire national debt was about 27 billion (at the time).
Too late, too late.
Pointless standing in 2014, damage is done.
Yuba bill you were not on your own my friend ,I have been blocked from every media site for years ,RTE is now a state controlled media propagandist station .DOB owns many media outlets,also private hospitals,also our WATER ,are you getting my gist ,should our people take our country back from these gangsters in Dail Eireann,ARREST THESE TRAITERS who have bankrupted our country
down with the union!!!
He’s right even as a 17 year old doing economics in school even I could realise that hit was a pipe dream to amalgate countries with vastly different economic environments under the one union .It’s a failed project,but no one will admit it.
After reading all the comments, they more a less say “vote in a new party”
Well
Who is the best for the job?
I wouldn’t trust any one, they lie and promise the sun moon and stars, but behind stab you in the back.
Who’s got the experience?
If I don’t vote at all what happens my vote, will it have an impact?
Do I go left for SF, what can they offer
Do I go right with FF FG Labour, don’t think so
So where do I give my vote.
I would like to think that if no one voted then the candidates/government might realise the people of IRELAND have spoken
No
What do you suggest? I’d be interested to know do you have any solutions?
Time to plan for an orderly exit from the EUSSR before it implodes.
They’d be utterly stupid and incompetent if they haven’t got an exit strategy in place……just in case.
Dont forget..they had a handbook on what to do in a financial meltdown..they just ignored it.
Ignore all the parties on may 23
Phillipe… Typo!
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