YET AGAIN THE IMF LOOKS CUDDLY COMPARED TO THE EU

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By Luke Ming Flanagan

In this business you try to keep a level head at all times, a clear mind not clouded by emotion. There are times though when you can’t help but be affected by what’s happening around you and today listening to a Newstalk interview with Ashoka Mody, was one of those times.

For those of you who haven’t heard of him, Ashoka Mody is the former head of the IMF element of the Troika delegation to Ireland, currently a visiting Economics Professor in Princeton University in the USA. Now the IMF has come in for a quite a bashing in Ireland since the Memorandum of Understanding was signed in November 2010, and rightly so – they were party to what happened in Ireland thereafter.

Over the last couple of years though it has emerged that the IMF in fact weren’t the real hardliners in that unholy Trinity. It’s true that they’ve left devastation behind them in Africa and South America in their previous dealings – privatisation of vital public services, imposition of cuts, reduction of services – but we know now that back in 2010, they were the ones who wanted to see bondholders given a haircut but they were over-ruled by the iron-fisted EU bodies, not least the ECB.

As we know to our continuing cost, that iron fist still rules in the EU but lately, it has been challenged by Greece, more specifically by the new government led by Alexis Tsipras.

And this is where my emotion comes in.

IRELAND TAKES HARD LINE ON GREECE

In yesterday’s Financial Times there was headline, ‘Ireland takes hard line on Greece’. The article was written by Vincent Boland and in it he writes – ” (A)s eurozone finance ministers meet in Brussels on Monday (that’s today) to press Greece to seek an extension to its €172bn bailout, Irish ministers seem insistent that Athens complete every last yard of its gruelling austerity programme just as the Irish did.” Then Vincent quotes Tom Healy, director of the Nevin Economic Research Institute: “They’re saying (Irish government), ‘We’ve done our homework, it wasn’t easy, and part of the homework is keeping Germany happy, and the Greeks are being unrealistic’.”

I don’t know about you but when I read stuff like that my blood boils. I think back to another headline from another article from another paper, just a week ago – Shaun Connolly quoting Independent TD Finian McGrath last Monday in the Irish Examiner: Noonan has ‘stabbed the Greek government in the back’.

That’s what this government is doing at the moment, and doing it in our name – it is shameful, truly shameful.

FEAR BUILT ON FEAR

At least though they’re being consistent because – just as they’ve done since they came into government four years ago – they’re acting from fear. The fear then was of the threats and bullying by the ECB/European Commission/European Council; the fear now is of being exposed for the craven cowards they were. If Tsipras and his Syriza party should succeed in securing a new and better deal, what will that say about Enda Kenny, Michael Noonan, Eamon Gilmore and the rest of this government?

The fact is, Kenny and his cohorts in the Cabinet should have done back in February 2011 what Tsipras and Syriza are doing now. Who says? Ashoka Mody says, in that Newstalk interview. Here are some of his comments:

OPPORTUNITY MISSED

“Ireland had its opportunity. They came in on a mandate very similar to the current government of Greece, they came in on a promise to do similar things. But as had become customary in Europe – including in Greece (under the old governments) – from the moment the new government was formed it felt an obligation to ‘grow up’ and ‘growing up’ in European terminology meant doing what Berlin and Brussels think is the right thing to do. Ireland fell in with that culture. Ireland had its opportunity, not just for itself but for Europe; in accepting the premise that Brussels and Berlin determine economic policy in every country, Ireland perpetuated a culture that this current Greek government is trying to break.”

So Mr Mody, opportunity missed?

“Absolutely. The new government had so much going for it. In that case (as opposed to this new Greek government), it was even clearer that there were mistakes that were made for a decade at least, when this new government came in. THERE WAS A BURDEN OF DEBT  THAT COULD LEGITIMATELY BE DECLARED AS AN ODIOUS DEBT (my emphasis) and this was not necessarily because there was something unique about this particular government but because there had been severe and egregious errors that it inherited.

“It was on that premise that it won the election and what the deal at that time could have been, I don’t know but it should certainly have been a superior deal. That deal would have required a clear premise on some amount of debt restructuring, a slower pace of fiscal austerity. And that’s exactly what the Greek government is doing today, they’re saying the level of austerity they’re being asked to deploy is too much and that they need some debt relief. The logic and the process are exactly the same.”

IRELAND – WRONG TACTICS

In that same interview, Mr Mody made it clear that far from taking a ‘Hard line on Greece’ or – more accurately – from stabbing ‘The Greek government in the back’, Kenny and Noonan should be offering their total support to Mr Tsipras.

“It is not in anyone’s interest to draw this out,” Ashoka warned; “The longer it lasts, the deeper the political discontent and not just in Greece, it’s spreading all over. This is not just an economic problem; the next phase of this Greek tragedy will transcend Greece and divide Europe in a way European leaders must come to understand is now a real risk.

“There is a natural instinct at this point to shrink from the Greek government because it is seen to be breaking rules that have become embedded in the European culture. That is why Greece is so important because what Greece is doing is a favour to Europe, saying that these rules by which we have functioned are not just not good for Greece, they’re not good for how Europe is run. The problem is not just the economics of austerity, which have given us six years of evidence that it has huge costs. Even if we believe that eventually it will deliver some sort of economic dividend, in the interim it has created huge costs and certainly all reasonable people can agree that a slower pace of austerity would have been economically better. What is crucially important at this point is the political process, that it is creating a set of divisions in Europe

“If the euro was a project to create peace and friendship in Europe, it’s not working out that way, in the way Europe is being governed. As an outsider, when I watch this I think to myself – ‘Why exactly doesn’t everyone see it this way?’ And I remain mystified.”

You’re not alone in that, Mr Mody, you’re not alone. But you don’t have to live with the shame of those guys betraying not just Greece, but betraying their own people, who can identify a hell of a lot more with Greece and the austerity measures imposed on them in the last few years than we can with those who are doing that imposing.

HOPE, THE ULTIMATE EMOTION

These are dark days in Irish history, dark days, but even as we are again let down by our own leaders, we can look to Greece with real hope because as Ashoka Mody says, they’re not just fighting their own battle here, they’re fighting for all the austerity-oppressed people across the EU.

P.S As I post I notice that Michael ‘Wily’ Noonan has hit back at Mr Mody. He’s very obviously bould at being exposed.
Like that lad again who never had the courage to ask the girl to dance. Discovers too late she’d have said yes. Now its her fault.
No Michael. Sorry to break the news. It’s yours. You didn’t ask!