Even if there is no referendum in 2012 on or about the Euro, there will be a passionate public debate on the totality of Ireland’s relationship with Europe. If the previous debates are anything to go by, there is likely to be more heat than light. And, while European defence and Irish neutrality should be peripheral to any debate on what are primarily economic and financial issues, the old chestnut of the threat to Irish neutrality of any further European integration is likely to crop up – the more so in the context of a tighter union outside (even if overlapping with) the existing EU treaty framework .

I published the following piece, on Irish Neutrality, in the United States in November 2009, just after the vote on Lisbon 2. I could have written a lot more but the column was confined to 1200 words. I post it now, unamended, as we enter 2012:


Ireland is not a member of NATO, nor is membership likely. Yet few things can be calculated to raise blood pressure (and voices) more at the dinner table or over some drinks than the subject of Irish neutrality. In the campaign on the Lisbon referendum just ending the issue has again loomed large. No one can seriously get worked up over the proposed changes in qualified majority voting, or the alleged threat of legalised abortion, or even over the prospect of a future ukase from Brussels on our company taxation rate. But mention European Defence and the spectres conjured up include conscription into a European army, involvement in foreign wars and the loss of our international “nice guy” image. In vain have the “Yes” side pointed out that Lisbon threatens none of this. Debates on neutrality generate much heat without corresponding light!

The intellectual justification for Irish neutrality can be summarised briefly. Our history of centuries-long subjugation to English rule involved us, involuntarily, in British military and colonial ventures worldwide. Independence finally gave us an opportunity to gain distance and determine our own policy. Most famously we asserted our neutrality during World War Two (described in Ireland as “The Emergency”). We were fortunate in that we were not attacked or invaded, like the Netherlands or the Baltic States. Ireland’s geographical location and island status were vital factors in maintaining our neutrality, as was the fact that we were not in the way of the major belligerents or their war plans.

Whatever moral doubts we had about not fighting the Nazis could be assuaged by the presence, on the allied side, of the equally monstrous tyranny of Stalin’s regime. The response of De Valera to Churchill’s intemperate outburst over Irish neutrality in 1945 is recalled with pride (his signing the book of condolences for Hitler’s death generates embarrassed silence). Post 1945, staying out of NATO was justified, at first semantically, by the issue of Partition, and later, after Stalin’s death, by an expressed wish to stay outside the military alliances of the Cold War. With the collapse of the Soviet Union the case for joining a military alliance further diminished.

To avoid charges of isolationism, Ireland could point instead to a long standing support for collective security; starting with her involvement with the League of Nations and proceeding through to the United Nations. Ireland’s high-profile involvement in UN Peacekeeping operations – a source of national pride – could be cited. Irish soldiers have died in such operations from the Congo in 1960 onwards – the first Irish troops to die overseas for Ireland and in the cause of the UN. Ireland was seen as one of a small number of reliable UN members which could always be counted upon to step up to the plate when troops were needed. And being militarily neutral was felt to increase Ireland’s acceptability for involvement in sensitive UN peacekeeping operations.

Military neutrality enjoys wide popular support, at least according to opinion polls. This is perfectly understandable. No one likes or wants war. Avoiding the horrors of World War Two was a plus. Our UN peacekeeping record another plus. Not having a colonial past or the moral ambiguities of involvement in questionable military ventures are other positives, qualifying Ireland for a potential “honest broker” role. All in all, neutrality sits well with public self-perception of Ireland as non-aggressive, anti-colonialist, progressive and supportive of assisting the Third World. Brownie points are awarded (subjectively) for the moral superiority associated with being neutral.

Neutrality has again become a live issue as the world has proved to be less secure in the post Cold War era. There have been moves within the European Union (which contains three other non-NATO countries) to develop a common defence and security policy. These moves were given impetus and some degree of urgency by the wars in Croatia and Bosnia, where meddling by the EC as it then was, was accompanied by total impotence militarily when faced with the forces unleashed, and where peace was achieved eventually only through US intervention. The high watermark of these moves, as set out in the Lisbon Treaty, proposes mutual assistance (of whatever form) where a member state is attacked, and a vague commitment to improve national military capability.

These moves have galvanised Ireland’s neutrality lobby, which sees them, despite Government denials, as the first steps on a slippery slope. This against a background of daily television reports from Iraq and Afghanistan. Indeed the Iraq fiasco has focussed attention also on the use of Shannon Airport by the US military as a troop stopover. The government has held firm against demands that this use be ended as it contravenes “Irish neutrality”.

Any attempt at debate on neutrality rapidly turns into a dialogue of the deaf. The suggestion that Ireland should do its bit to cooperate, in the context of membership of a Union which has served Ireland well, has had a mixed reception. Ditto with the argument that, if we are seriously neutral we should develop our defence capabilities like other neutrals (Sweden, Finland, Switzerland) so that we could give our neutrality a practical status. Indeed this argument is neatly sidestepped by a variant of the “nice guy” theme – who would want to attack Ireland, so why spend money on defence?

Ireland’s get out of jail card, action by and through the UN, has lost much of its lustre in the face of the manifest failures of the UN in Bosnia and Rwanda in the 1990‘s. Whether sufficient force could have been marshalled by the UN in time to prevent the genocide in Rwanda is debateable. What is a fact is that the Srebrenica massacre took place within a so-called “UN Safe Haven” which proved anything but. While the UN “is all we have”, as a leading Irish left wing politician put it to me, its shortcomings have become more apparent with the end of the Cold War paralysis.

The fact that a veto-wielding Permanent Member of the Security Council can thwart international action when its interests or those of a client state are at risk has become more evident in recent years. So also the difficulty of organising effective action against a regime practicing internal repression. “Collective action” and sanctions are difficult to enforce and often the regime remains untouched while the ordinary populace suffers (consider the sanctions against Iraq after the first Gulf War). We have become sadder, if not wiser, at world events this decade.

The nature of the debate within the EU on defence, and the mixed enthusiasm for involvement in NATO’s mission in Afghanistan among those EU states involved, means that it is likely to be some time before EU policy in this area has developed. Ireland’s military neutrality, in all practical senses, is not under threat. Only an attack could change this. One is reminded of the story that in 1940 Queen Juliana telephoned Churchill to tell him that Holland (neutral during the First World War) was under attack from Germany and asked what he was going to do about it. What indeed!”




The rather moth-eaten claim that “Ireland is at the heart of Europe”, which politicians like to parrot, took another dent yesterday with the funeral of Vaclav Havel in Prague.

Havel’s career is too well known to need repeating here in any detail. A poet and a playwright, Havel emerged from 1968 on as a leading political dissident who determinedly opposed communism and was a passionate supporter of non-violent resistance to the regime. He was imprisoned on a number of occasions, including almost five years from 1979 to 1984. He was lucky to have come to the fore when communism was atrophying; a generation earlier and he would probably have been murdered for his views, like the former Hungarian premier Imre Nagy, and others right across Central Europe whose fate is largely unknown or forgotten, disappeared into the century.

When communism began to crumble, once Gorbachev eschewed its trademark policies of murder, torture, mock trials, imprisonment and political oppression,  Havel came to the fore as a leading member of the Velvet Revolution which swept the communists from power. He became Czechoslovakia’s first President and, later, when the country split peacefully, he served two terms as President of the Czech Republic.

Our politicians could probably take a few lessons from the Czechs and the Slovaks on what  it really means to lose sovereignty ; their country  dismembered and occupied by the Nazis after 1938 and then to suffer a police state for four decades after the war, under a regime imposed and maintained by the Red Army. Havel first came to prominence when  Warsaw Pact forces invaded in 1968 to crush the Prague Spring.

It is worth recalling that , when Fianna Fail was  planning and executing its master plan for the 1977 elections, and seriously undermining the country’s tax base in the process, Havel, with a number of other dissidents, was publishing Charter 77 to protest – peacefully – the Czech government’s failings in the human rights area, including breaches of international commitments. By 1979, when Haughey was lecturing the Irish for living beyond their means, Havel was beginning a five year gaol sentence for subversion, for protesting the treatment of Charter 77 signatories.

But that was then and this is now. The bridge has seen much water pass under it. We pride ourselves on our human rights record and our profile internationally on similar issues. We support non-violence and even offer our expertise internationally  in conflict resolution, based on our  experience in Northern Ireland. We espouse the notion that all 27 EU member states are equal and speak of building alliances with like-minded member states. For all of these reasons Vaclav Havel was the type of person we should admire and mourn his passing as one of the significant figures – for good  – in Central Europe over the last 30 odd years.

Yet at his funeral, attended by many international heavy hitters including the Presidents of France and Germany, and Prime Ministers including Angela Merkel and David Cameron, Ireland was represented by the charge in Prague. Former President Mary Robinson attended, and is to be applauded for doing so. But where were the politicians? We couldn’t even rustle up a junior minister to do a same day journey on the government jet. They can’t all have been busy – or shopping. For a country where attendance at funerals is part of the political culture, this was a poor show, all the more so as Havel deserved it. Shame. Heart of Europe?



It began on Christmas Eve.

We had started with a particularly hair-raising mission, to supervise the de-mining of the runways at Zagreb Airport. The attempt to remove the minefields around the airport had been abandoned some days previously  following an explosion which had killed or wounded half the Serb de-mining unit. A mine had exploded where none should have been. The conclusion was that over the years the position of the mines in the ground  had shifted slightly, probably due to decades of harsh winters, and the maps of the minefields were no longer reliable. The task would await the spring thaw.

The runways were different, and had to be cleared and the JNA planes flown out before Christmas to hand the airport over  to the Croatians on schedule.  Narrow tunnels beneath the main runways and slip ways had been  packed with explosives in black salami-like rolls several metres long. As they were pulled out, they appeared to be sweating and received careful and prudent handling from the Serb detail involved as we looked on. The soldiers were commanded by a very young and very emotional Serb captain. He had been present when the mine had killed his comrades. He described himself as devastated by the war. His marriage to a Croatian girl was breaking up, with her family vowing to have nothing to do with him or other Serbs. He cried as he talked with us.

The airport hangers held a number of JNA MiGs, mostly M21s, and one very surprising addition,  a pristine looking MiG 29, bearing the markings of the Iraqi Air Force. It was less than a year since Desert Storm, the war to liberate Kuwait, and Saddam Hussein, in a prescient  attempt to preserve what he could of his air force from annihilation, sent the cream of his fighters abroad as the conflict loomed. Some had obviously been  sent to Jugoslavia, which had been a major supplier of armour to Iraq during the 1980s. All the planes were gone when we attended the handover on Christmas morning.

Dinner that evening was  a merry affair. Most of the Monitors had returned home for the holiday and those of us left were treated to wine a plenty, compliments of the HOM  and his brigadier. During the meal the HOM addressed us and asked for volunteers for the next day’s mission, to complete the evacuation of Serb forces from the airport and escort them through the front lines to the Krajina.  There would be no tasking; it would be volunteers only, as the risk in crossing No Man’s Land was felt to be higher than usual. This convoy would be the last and would complete the evacuation of Serb forces from unoccupied Croatia. The way would then be clear for introduction of a UN peacekeeping force.

However, even if the Serbs knew the writing was on the wall with the arrival of the UN, which would cement the existing front line for who knew how long, they  were still seething at the EC decision only days before to  recognize Croatian independence and were believed to be planning something to mark their displeasure. The Croatians were also thought to be holding off more serious fighting until the Serbs were got out. The last convoy would be symbolic; it would pass through all right but the   return for the  Monitors might be more problematic. Despite the added risk there were plenty of volunteers.

Midnight Mass in Zagreb Cathedral was brought forward  to 9.00 p.m. on foot of rumours of  an air strike on the Cathedral. The Cardinal officiated, the Cathedral was packed to overflowing  and the solemn sung high mass moving. The attendance included the Croatian president Franjo Tudman, who was mobbed by Mass-goers. The memory of ordinary Croatians surging forward trying just to touch (!) him is not easily forgotten. The scenes afterwards on a cold clear night outside the Cathedral were ones of extraordinary emotion with many people openly in tears. We were thanked and congratulated frequently,  though hectored on occasion about the arms embargo which in practice bore most heavily on the Croatian side.  Evident everywhere, however, was the new sense of confidence and relief that the worst was now over, and freedom assured, which EC recognition had brought.

We started early on Christmas morning. Overnight snow lent a frigid white aspect to  everything and a thin but persistent chill mist halved normal visibility. We seemed to be the only vehicles on the road but had only gone a short distance when  our normally reliable Japanese land cruiser developed a fault. Attempts to repair it failed and we had to change vehicles . Waiting, shivering, for the replacement to arrive I remember thinking that this was not a good omen. Then on to the airport and to the adjacent barracks. The Serb soldiers were already packed up and ready to leave, most in high good humour and loaded into an assortment of military vehicles, several Ladas, and three buses. We were invited, with raucous shouts and laughter, to inspect the barrack buildings they had left. Most were scarcely fit for human habitation at the best of times but, as we soon saw, were not improved by the soldiers accepting their officers invitation  to use them as toilets, which they did in copious quantities.

I was hailed, by a Serb sergeant  with good English, to board a bus. The emotions on board were mixed, for included in the passengers was one of the bomb disposal survivors, just released from hospital, young and now blind, sedated and with his face covered by hospital gauze. Also on the bus was a very young and tearful  Croatian private, a conscript, standing in his socks. “We’re letting him go Europe, but we’re keeping his boots”, laughed the sergeant.  He bummed  from me a packet of cigarettes, the staple currency and luxury alike in that war. I helped the boy off the bus. His relief was palpable, but, just as I had seen elsewhere with other Croatian conscripts caught on the wrong side, there was little animosity towards him from the soldiers. The horrors of Bosnia were in the future, unimagined. The fact that  this was the regular JNA and not  irregular militia probably helped.

Then it was on, to Karlovac and the front line at Turanj. forty miles south of Zagreb. The mist had thickened, with visibility down to less than 100 yards as we left the Croatian defences. There had been intermittent shooting and mortaring throughout the morning and we were advised, in the lead vehicle, to sound the horn continuously as we drove the half mile or so to the Serbian lines along a road lined on both sides by shelled and burnt out houses .

We eventually reached the Croatian mines, marking the designated front line. It had become customary for both sides to seed the roadway here and at other crossing points with pressure mines designed to explode if a vehicle ran over one. They were harmless to an individual stepping on one, requiring several hundred kilos of pressure to detonate, as I had had demonstrated to me by a French captain and a Canadian major (from the Quebec Vingt-Deux) who had literally jumped on them at the same place a month before. It had become routine, as the convoys were being evacuated, for both sides to allow the other to move the mines to one side without hindrance, to allow the convoy to proceed. (This was not altruism; the Serbs wanted their men, weapons and armour back, the Croatians wanted them gone – a meeting of minds without impediment had followed!)

Then a hitch. Some weeks before, someone – I don’t know from which side – had shot one of those removing the mines. Emotions ran high; convoys were suspended. The compromise involved the Monitors stepping forward – literally. It was agreed by both sides that, since the Monitors’ personal security was guaranteed, when faced with mines on the road, the Monitors would step out together, step over the mines,  link arms and form a human shield, behind which  combatants from both sides would move the mines, safe from enemy snipers,  the process to be repeated on the other side and performed in reverse when the convoy had passed through. No one was very happy with it, but it worked.

This time it was different. “Claymores. Nasty”, said Mike, a British para colonel and a fount of good humour and common sense. Claymores were anti-personnel mines, easily triggered and with an estimated 10% faulty among Warsaw Pact ordnance. Four of them rested on a plank with a rope attached amid the pressure mines. “Do exactly as I say – exactly! Proceed as normal. Step over the pressure mines as usual. Whatever you do don’t step too close to that plank.” He was singing our song. We gladly complied, linking arms as usual. “Now for the tricky bit”. This from Mike as a Croatian soldier approached and began to pull on the rope to move the plank. It moved. “It’s o.k. They’re probably screwed down. It would be too dangerous otherwise. But you never know”. Indeed! The three of us with Mike realised we had been holding our breaths for some time.

Then we were through. It was plain sailing on the Serb side where the troops in the convoy were greeted fulsomely  by their fellow soldiers. We were offered coffee then slivovica;  I was relieved of the rest of my cigarettes. There was good humour towards us generally, though nobody said thanks, and the fact that we were in a war situation was brought home to us when a tank clanked into view, passed us and waved its turret menacingly towards the Croatian lines. We could hear the crackle of small arms fire though not near to where we were. I risked taking some photos – always a bone of contention, with the Serbs in particular complaining that we were photographing their positions (true, if inadvertently) and that this would be of military value to the Croatians (doubtful). They had recently detained briefly an Italian fool who had taken out a video camera and begun filming Serb soldiers openly while the convoy he was with passed through.

Then it was time to head back, with the mist now substantially disappeared. As we drove, the sporadic firing increased and became intense. By the time we reached the Croatian lines a mini battle was in progress, fortunately none directed towards us. Then, before we left the front line, a final task which fell to me. My three colleagues, all British, represented three generations of attendance at a military staff college, and wanted a souvenir photo.  There was only one possible location, an old bullet-pocked  building on the main road some yards from a sandbagged position. As I lined them up, the firing not only intensified but began to come closer.

“Hurry it up”, called Mike. “Take it and be quick about it” from Terry. I did so, just as bullets began to whistle  directly over our heads.  We abandoned the photo-shoot and  took refuge underneath the jeep for several minutes before proceeding back to base for a belated Christmas dinner.  “The hostilities had EC Monitors diving for cover” was how the BBC World Service reported the incident later that evening – to date the only occasion on which I have made the BEEB.  Unheroic, yes, but as anyone who has been under fire will tell you, discretion becomes very much the better part of valour. I would like to report that the photo of my fellow Monitors was well received; in fact my copy arrived with a note suggesting I not give up the day job.



“An interim measure, set at a modest level and exempting many low income families” is how the Irish Times last Monday  described the new  Household Charge,  to be introduced at a flat rate of €100 per residence for the first year (2012), with limited exceptions.  It has been signalled as the precursor for  a more considered property tax to be introduced in 2014 but a story in today’s Irish Times (21 December)  suggests that the real tax may be brought forward to 2013, and will involve some form of self- assessment.

Everyone expected the €100 charge at least to double in 2013. A head of steam has been building up in opposition, with  a number of politicians ( left and  independents) plus some  high profile people, declaring they would not pay and urging  the public to boycott registering for the charge. One Socialist T.D. declared  that this issue could be the defining one for igniting public protest.  The decision to bring forward the property tax is clearly a political one designed to defuse the issue. (The cabinet also decided yesterday to tinker with the HSE in advance of phasing it out in preparation for the eventual introduction of universal health insurance. Again, the political intent is clear – to be seen to do something in an area subject to sustained public criticism, and where, moreover, there is mounting public anger at steep rises, announced and threatened, in the cost of private health insurance.)

Bringing forward the property tax to 2013 could show some Machiavellian intent also. Today’s story cites sample figures for a property tax based on the 2009 recommendations of the Commission on Taxation; not surprisingly the last government left these on the shelf. But even if the eventual rates introduced are substantially less than the samples mentioned, the tax is going to hurt, and hurt big time,  in any event, so why not get it over and done with quicker in the life of the government. Niccolo would certainly have approved.

Moreover, there is the bigger picture. It is just possible that, if there was full and frank discussion around the cabinet table, with the latest opinion polls and economic forecasts as background, the fast tracking of the property tax, which will hit the middle classes (some would say the coping classes) most, is the political quid pro quo from Fine Gael to Labour to secure its support for the inevitable cuts in welfare benefits and the probable reopening of the Croke Park Agreement necessary next year to try to tackle the structural budget deficit.

Perhaps that is crediting the politicians with too much. But assuredly the introduction of a property tax, however laudable the idea of one in theory, will test the government’s mettle and is likely to prove deeply unpopular. One consideration, not to be underestimated, is the widespread feeling among the middle classes that to describe a property tax as “widening the tax base” is cynical and misleading. As they see it, the same narrow group of people pay all the time.

This in fact is what led partially to the demise of the last attempt at a property tax, the Residential Property Tax (RPT). Deeply unpopular in concept, and introduced when a previous Fine Gael/ Labour government was on its uppers in the mid-1980s, the RPT relied on a system of self- assessment, with generous exemptions, the whole quickly degenerating into farce and non-compliance. It is important that this time the government gets it right. There is an opportunity now to establish a viable and reasonably equitable system, avoiding the mistakes and half-baked efforts of the past. And, incidentally, the amounts recommended for middle ranking  properties by the Commission on Taxation are probably less than what would have been the annual bill for domestic rates had they not been abolished in 1978.

It is worth recalling briefly the history of Domestic Rates– and its demise -in Ireland. Domestic Rates were levied in Ireland until 1977. They were extremely unpopular with those who had to pay them (local authority tenants were exempt), particularly in the latter years, as they began to rise sharply. The rates were levied by local authorities and used to fund their expenditure. This included – right down to the 1970s – a significant element spent on health and education, now paid from central funds, a historical hangover from the old Poor Law system.

Rates were calculated on an antiquated system of valuation, dating back to the mid-19th century, patched and amended piecemeal over the years. Theoretically the valuations were meant to factor in location, size of dwelling and plot, as well as amenities (indoor toilet, two bathrooms, etc.); in practice, like most patchwork efforts, the result was a melange demonstrating  very dubious levels of equity and fairness. The “valuations” were in 19th century money terms, translated into the present by a multiplier set annually by the local authority. For example ( a hypothetical but not unrealistic one) in 1975 a house with a rateable valuation of £20.00 could be levied at “£7.50 in the Pound” i.e. the annual bill would be £150.00. This at a time when the gross  average industrial wage was less than £2000 per annum!

How did people pay? The answer is “with great difficulty”. Pat Kenny spoke last week on radio about the  heavy burden on his parents of paying the rates. He did not exaggerate. Ask anybody who was a householder in 1975 about rates. It was, after income tax, the major financial item in the average annual household budget, and , unlike PAYE, it had to be paid in one or several instalments. A particularly devilish practice was for the local authority to “value” newly built houses – and there was a relatively significant  building boom in the early 70s – relatively highly, but to grant rates rebate on a sliding scale over 10 years (i.e. 90% declining to zero over 10 years). This helped ease in the heavy payments and to an extent neutralised coherent opposition to the system.

Yet opposition grew, particularly as rates increased dramatically in the late 60s in  line with public demands for better services at local level. The system was manifestly unfair, with house owners in new estates on the urban fringes with few amenities paying the same or more than those in older more desirable (and wealthier) areas (contrast, e.g. Raheny with Ranelagh, or Tallaght with Terenure). The rates burden even had a marginal effect on house sales, inhibiting some trading up and also first time buyers from buying older houses. Calls for reform were common, but no one seemed able to come up with anything workable. The usual Irish wringing of hands took place as the rates bill mounted.

Then came the 1973 General Election. Fianna Fail, in power for 16 years, and which fought the election initially on security issues, was wrong-footed by  a joint pre-election programme from Fine Gael and Labour which inter alia proposed to cut domestic rates by transferring the health and education elements to central government funding (in anticipation of the first income transfers from Brussels). As the election date approached, Fianna Fail, in a cynical and desperate attempt to avoid defeat, announced that, if returned to power, it would abolish rates on domestic dwellings. The ploy didn’t work and Fianna Fail was defeated, but it was perfectly obvious that , next time round, rates would be gone. And so it proved; Fianna Fail swept back in the famous give away election of 1977 and domestic rates were abolished.

By the mid-80s a national hangover had replaced the party atmosphere of 1977 and attempts were made to claw back the worst excesses of Fianna Fail’s 1977 largesse.  Road tax on cars was reinstated. All parties baulked, however, at “bringing back rates” (such had been its burden on the ordinary taxpayer)and the eventual solution was the Residential Property Tax (RPT) , half-hearted and half-baked. The RPT aimed at NOT being a resurrection of Rates, and it certainly achieved that. It relied on self-assessment, there was widespread non-compliance and anecdotally  considerable cooperation at community and street level leading to coordinated under declarations of market value. The tax yield , accordingly fell far short of expectations, and, at a time when property values were static and marginal tax rates very high, the tax proved very unpopular. The Irish Times editorial last Monday quoted Albert Reynolds’ famous remark that “a delivery boy on a bicycle would identify more qualifying properties in Dublin 4 in half-an –hour than had been registered with the Revenue Commissioners for many years.” The  government of the day finally threw in the towel in 1997 and the tax was dropped, coincidentally as the economy was picking up and pressure on government finances was easing.

It’s worthwhile looking at the operation of the RPT; there is much to be learned from it. It was an annual tax, charged on the market value of residential property owned and occupied on the valuation date of 5 April at a rate of 1.5%. So far so good. However, the exemptions and the system of self-assessment robbed it of teeth. Anybody renting was exempt. A market value exemption limit applied, as did an income exemption limit. These  were set at surprisingly generous figures. In 1996 the “market value exemption” was £101,000 (roughly €130,000) and the ”income exemption” was £30,100 (roughly €38,000); it should be noted that this was broadly equivalent to the top of the civil service assistant principal pay scale at the time.  Marginal relief applied for those with incomes less than £40,100 (€50,000), roughly what a T.D. was paid, and, to cap it all, the final tax payable was reduced by 10% per child. Throw in a system of self-assessment, where anyone caught by the income  threshold could “value” their own property and it is not difficult to see why the RPT proved farcical. It was the ultimate self-delusional  “tax” approved by politicians determined to heed lobby groups and avoid public opprobrium and discontent.  The analogy with the camel designed by a committee is not far off the mark. Legislators and the expert-group- to- be- established take note!

The modalities of the property tax are to be worked on in the months to come in time for a report to be submitted to the Minister by next April. There is early dire speculation that some form of self-assessment may be employed.  Let us hope this is not the case.  The country can’t afford it. Moreover, a small team of public servants, dedicated to the task in hand, should be able to value the vast majority of properties in the country in a short period of time. It’s not rocket science! The suburb where I live has roughly 1500 dwelling units and several estate agents. Virtually every house and apartment could be value assessed, roughly, in a day by two people. This could be replicated throughout most of urban Ireland. Much of the work could be done on the phone and on the Internet. Whatever was left, the fine tuning, of non-estate houses, of “period properties”,  could, again be inked in fairly quickly, using value bands. We don’t have to get it right; just roughly right – the small print can take care of serious deviations from the norm later.

After the valuation there are the issues of geography and exemptions. The geography issue certainly presents political dilemmas. Should house owners in high value areas such as Dublin or Galway pay a premium for living there rather than elsewhere, particularly if incomes are the same  across the board?  Should the teacher in Malahide pay more than the teacher in Carrickmacross, who perhaps has a superior property? And if so – how much more? Well, that’s what we elect a government to do – take the hard decisions. Ditto with exemptions. They should be as few as possible. The notion that large swathes of the population should be consciously exempted is, again, something the country cannot afford. So far the omens on this are not good. The Universal Social Charge was an attempt to get everyone to pay at least a little, thereby inculcating a sense of ownership and civic duty in place of the existing culture of entitlement and away from the notion that someone else would or should pay. However, the recent budget , by raising the income  threshold for payment, reversed much of this. Special pleading from or on behalf of the usual groups for exemption from the property tax can be anticipated. More in hope than expectation I would urge that this be resisted. Generally, perhaps a leaf could be taken from the old Rates’ practice of phasing in the full amount over a number of years!

tiny sunbirds far away


1.The title comes from one of Nigeria’s indigenous birds – the Tiny Sunbird, Nectarinia Minulla, a year round resident, one of 28 species of sunbird.

2. The Author is a former  paediatric nurse (at Great Ormond Street), proud of her profession. This is her first novel. She lives in South London with her Muslim husband and three children, having spent several years living in Nigeria. The book has been shortlisted for the Costa First Novel Awards, to be announced on 4 January next.

3.There is a very interesting short (2’30”) YouTube video interview with the author in which she describes the novel as the story of a family, how it fractures and how it can come together again. She speaks of drawing inspiration for some of the characters from her immediate family.

Brief Outline of the Novel

4.The novel is narrated by the heroine, Blessing, who for most of it is a 12/13 year old girl. It opens in Lagos where the family lives a comfortable middle class existence, with most modern comforts. This is soon shattered when the father (incidentally a drunkard and a wife-beater ) is caught with another woman, breaks up the marriage and the family (mother, Blessing and her older brother Ezikiel) is ejected from home and surroundings and forced to return to the mother’s family, living in rural squalor in a village near Warri, a city in the oil-rich Niger Delta. The rest of the novel takes place there. (Compare and contrast this with what would happen in the event of a marriage break up caused by the husband’s infidelity in Ireland, Britain or Europe.)

5. The culture shock is almost total. Their new home is racked by poverty and has little furniture, no electricity, no clean water (it has to be bought and carried – by the women – from a location 20 minutes away), no sanitation, and primitive harsh schooling. The grandfather who is a firm, if sometimes benign, head of a Muslim household, has no job and drinks heavily (Remy Martin!), while romancing about his qualifications as a petroleum engineer and his hopes of getting  a management position in the nearby foreign owned oil company ( the Western Oil Company). Inter alia the household supports a driver/factotum, who has 4 wives and 17 children living nearby.

6. The family has no money, apart from what Blessing’s mother brought. The children are obliged to give up school since they cannot afford the fees, scuppering Ezikiel’s hopes of becoming a doctor. He is asthmatic and has a chronic allergy to nuts. His diet, therefore, suffers since they cannot afford palm oil for cooking but use ground nut oil to fry any meat (which must be fried to kill bacteria). His grandfather, Alhaji, a fool who believes Marmite is a universal cure, refuses to believe Ezikiel has allergies. Mocked by his companions for having no sons, he takes a second much younger wife who is almost a caricature, to the discomfiture of all, including his first wife, the grandmother.

7. As the story proceeds, the women have to provide. The mother gets a job in the bar in the oil company’s compound. The grandmother, it is revealed, is a local midwife, while the number 2 wife becomes a professional mourner. They get by. Ezekiel goes back to school, but Blessing’s return is vetoed by her grandfather; she becomes apprenticed to her grandmother. Meanwhile their environment begins to loom ever larger in the story. There is considerable local resentment and gang violence over the foreign exploitation of the local oil reserves and the effects this unregulated development is having on the environment – polluted river water, noxious atmosphere, etc – as well as the poverty and lack of job opportunities for the locals. Ezikiel, an innocent, is shot in an incident and hospitalised.

8. He is only released from hospital when his bill is paid. But by whom?  Cue the white oil worker, Dan, who has befriended the mother and is picking up the family’s bills. In classic fashion he is at first rejected by the family, then gradually accepted as it appears he loves and intends marrying the mother. He finds a ghost job for the grandfather, who rebuffs him temporarily as his daydreams of a management position are exposed as fantasy.  Ezikiel has become radicalised by his circumstances, accuses his mother of prostituting herself and attacks Dan as a foreign exploiter. He is expelled from school and eventually leaves to join one of the anti-oil company militias – the Sibeye Boys.

9. The story proceeds to a somewhat unsatisfactory conclusion, with  a hostage taking (Dan at his wedding), a terrorist incident with  tragedy for the family (the involvement and death of Ezikiel) and an unexpectedly benign outcome  involving the release of Dan without payment of ransom,  his subsequent marriage to Blessing’s mother and their move to London, leaving Blessing behind. Fast forwarding, she still lives in the village, has children of her own, including twins (in some societies bad luck) and narrates her story to them.

Subtexts and Subplots.

10. There are several subplots. The main one, which is fascinating, concerns the work of a rural tribal midwife in Nigeria. A number of childbirths, uncomplicated, difficult or tragic, are described in unrelenting detail. It’s definitely not for the squeamish. The stoic acceptance of the delivery by the mothers, the cutting and stitching where necessary, all without anaesthetic, has considerable impact. As does the gradual initiation of young Blessing into the role of assistant and then full midwife.

11. On balance the midwife elements are positive and uplifting, showing the basic nobility of the women,  mothers and  those attending , in dire circumstances of poverty dirt and disease. Stalking this scenario, however, is a darker side, the presence, the threat, the tradition , of female genital mutilation. There is the delivery made more difficult and agonising for the unfortunate mother, who had suffered it and was sewn up again afterwards, the wish of another mother to have her new born daughter circumcised immediately , and the enduring image of the grandmother  sketching out for Blessing ,with a stick in the dirt, the four types of female genital circumcision.

12. The other main subplot concerns the tension and interaction between the locals and the Western Oil Company. Not only is their environment and way of life suffering from the casual untrammelled exploitation of the oil in the ground, but there is the strong feeling among the locals that they are getting nothing in return, apart from a few security jobs. People are being brought in to do jobs the locals consider they could do. They  are clear that there is corruption including of their own politicians going on, and inevitably there is a reaction. Armed militias develop, including some working for the oil company and terrorist incidents, hostage-taking and bunkering of oil become common.

13. White executives travel everywhere under armed guard. The family are at first suspicious of Dan’s relationship with Blessing’s mother; there are clearly precedents for  local women working in the company’s bar to take up with white men just there on contract. The family’s expectation is that Dan will abandon Blessing’s mother when his contract is up. But Dan is made of softer stuff! His hobby is ornithology not sport (it is in his list of Nigerian birds that Blessing finds reference to the “tiny sunbird”). He resists rather clumsy advances from the number 2 wife, and he goes through with the marriage to Blessing’s mother even after the kidnap. How often does that happen in reality? The motives of Dan, his past history, and the emotions and attitude of Blessing’s mother to their relationship, are passed over – but then again the story is being told through the eyes of a young girl.


14.The book is an excellent easy read. I read the 400 pages at two sittings.

15. It is gripping, sympathetic and draws the reader into the story. It has moments of tragedy (some of the childbirths, Ezikiel), comedy (the foolish beliefs and antics of the grandfather and those of number 2 wife), suspense, at times fairly grisly (childbirths, the imagined fate of hostage Dan); and it has, presumably intentionally, a happy ending.

16. It delivers its messages gently but memorably. It paints the grim reality of life in an African country and  village, without, incidentally, including most of the worst case scenarios. Food is short, but there is never famine. There are hints of potential sexual  assault on Blessing  (unless a bribe is paid) but no brutal rape. There is lack of electricity, with all that implies, lack of sanitation, without any of the attendant diseases, and very rudimentary hygiene in circumstances without clean water, again without the consequences that might be expected. There are darker glimpses – female genital mutilation for one, which Blessing declares she will never perform, references to the deliberate abandonment of twins as bad luck – though the number 2 wife has twins, and so ,we learn on the last page, does Blessing herself.  There is also the hint of the African woman selling her body for much needed money, though Dan appears as the hero who does right!

17. In short, the book is a gentle and compelling introduction for a reader in Europe or North America to the daily realities of existence for  many people in the developing world  . At the same time there is emphasis in the book of what unites people everywhere. Ezikiel , and one of the new mothers, will not be treated medically unless they can pay, and Ezikiel cannot leave hospital without paying his bill in full. How different is that to practices in the USA?  Christie Watson in her video claims her father-in-law in England, like the grandfather character, has both his own mosque and a snail farm!  Again, viewers of one of the Lifestyle Channels on Sky TV may recall, from “A Life in Spain” one aspiring entrepreneur setting up a snail farm in Spain. The message is that people are the same everywhere. And Ezikiel, with his idealism and resentment, particularly against Dan, sounds like a typical rebellious teenager.

18. Does Christie  tell the story convincingly through the eyes of her narrator, Blessing? We learn only at the end that she is now considerably older as she narrates, with children of her own. (There is one probable anachronism here; Ezikiel is buried in his Chelsea Essien shirt; Essien only signed for Chelsea in 2005, which makes the time line difficult. But then again, Christie may not support Chelsea!) She certainly makes a good fist of it, conveying much of how an adolescent girl would feel in those changed circumstances. Yet ultimately the premise that someone, irrespective of colour or race, would be transported  so quickly and definitively from a comfortable middle class standard of living to a life with a poor family in the countryside, and then eschew a chance to leave and travel to London, is somewhat implausible.

19.On the other hand, the book is didactic – probably intentionally. And it achieves its purpose. It shows the gulf in lifestyles, with the subtext of how fortunate we are to be born where we are. And it does so in an entertaining, heart-warming and moving manner. It is no wonder it has been short listed for the Costa Awards  Would I recommend it ? Definitely. An ideal Christmas present? Certainly.

20 December 2011



  Nobody ever said it would be easy trying to pick up the pieces from the wreckage left by Fianna Fail. Yet, incredibly, the new Government, less than a year into its term, has managed to dissipate most of the public good will with which it took office. The benefit of the doubt has been diminishing as the months passed, and took  a severe denting with the Budget on 5 and 6 December. The Fine Gael Labour Coalition now has owner ship of the mess. It could justifiably be described as a Shot in the Foot Budget.

Only the naïve expected that Ireland’s economic difficulties would disappear with the arrival of the new Government and only the totally naïve believed the  (separate ) pre-election promises of Fine Gael and Labour. Yet what was expected was at least a new approach, the wielding of a new broom and an end to favouritism and cronyism. Certainly there was a beginning,  with some token cuts and announcements of more substantial ones to come. There was also some progress to report on the cost of servicing Ireland’s debt, claimed as a victory. There were signs that relations with our partners in Europe – which had become strained – were improving.

However, as the months passed, the impetus seemed to flag. Fianna Fail as  a scapegoat for the state of things  was useful for a while, and when the potency  of that excuse diminished, the blame was shifted to the ECB and the IMF. The Government was hamstrung by the terms of the bailout –true enough – but bad-mouthing the institutions actually lending us the money to keep the country going when no one else would lend to us rang somewhat hollow.

(An aside here on our “loss of sovereignty”. Arguably we have NOT “lost” our sovereignty. We are receiving money from the EU/ECB and the IMF on foot of a memorandum of understanding. Our compliance with the terms of this is monitored at three monthly intervals  and the next tranche of money is advanced on the strength of the monitors’ report. We can, at any time, tear up the memorandum and tell these institutions where to go. We are then free, as a sovereign state, to borrow on the open market. All fine in theory; the only problem is that no one will lend us money on the open market; which is why we signed the bailout deal in the first place! The line that we will have our sovereignty restored when we have bid goodbye to the IMF and the EU/ECB and can again “borrow on the open market” is disingenuous. We can try the “open market” at any time –and then try to balance our books when no institution will lend to a country that spends one third more than it earns. We haven’t lost our sovereignty; we have lost our ability to borrow money!)

Then there were public appointments. One of the enduring afflictions to the efficient functioning of the Irish state over the past two decades has been the proliferation of quangos, at huge cost to the taxpayer,  siphoning off many of the core functions of government departments. This suited politicians in two ways: it provided a convenient excuse where something went awry (“I can’t do anything because the powers are delegated to the quango”), and it provided a ready means of patronage to followers through appointments to state boards. Shamefully, the outgoing Fianna Fail government continued to make such appointments even after its thrashing at the polls, right down to the installation of the new government.

Bruce Arnold has pointed out that some quangos are now doing  a job, at considerable expense to the taxpayer, formerly done quite adequately by one or two middle-ranking civil servants at minimal cost. I hasten to add not all quangos, though another promise by the incoming government was to cut their number so clearly others share my views.  One particularly irritating practice is that by some quangos of quoting or referring to the operation of other quangos, rather like a small office which does nothing except administer itself..

While there was some cosmetic attempts at reform, with more promised, over the past few months the public (those not appointed  to the boards of quangos) have come to realise that business was continuing as usual, except that the new appointees were in many cases government supporters replacing nominees of the former government. The fate of unsuccessful presidential candidate Mary Davis –dubbed the “Quango Queen” – should have alerted the government to public sentiment on that issue.

The lost referendum was another warning sign. It was all very well to indulge in a populist line when it came to putting the boot into the judiciary in the other referendum, quite a different matter to propose an amendment giving, on the face of it, more power to politicians, in this case to investigate alleged wrongdoings. While the thrust of the government’s line was that this would enable, at last, the public to get to the bottom of who was responsible for the whole banking fiasco, the public were not convinced. There had been over two years of hand-wringing by the previous lot; now, instead of meeting public demands that action be taken against those responsible, whether by fresh legislation or by allocating sufficient resources to the current investigations to ensure a speedy outcome, the new government was proposing to grant politicians even more powers, without thinking matters through or ascertaining what the public wanted through a public debate. The reaction of the government to an open letter from eight former attorneys general – of all political persuasions – smacked of hubris and the referendum was probably lost at that point.

Next the “special advisers”.  Like quangos, these have proliferated over the past two decades. Ministers, of course, have always had one or two favourites, usually drawn from the civil service, to keep an ear open on their boss’s behalf. One theoretical reason advanced was to prevent the Sir Humphreys in the system running rings round their political masters. Some of these advisers morphed into “programme managers” –remember them ? – whose function was to deal with mundane matters , leaving the politicians to concentrate on the more weighty issues (!). Increasingly these special advisers have come from outside, either from party ranks or at least party supporters. The additional justification, that they provided expertise not available within Departmental ranks, with very few exceptions, rings hollow.

Whatever their merits, the issue this year has been what to pay them. They don’t come cheap. The new government bravely announced a cap, actually corresponding to the fairly generous top of the Principal Officer scale – €92,000 euro. (For those not au fait, principal officers are at the upper tier of middle management  in the service; there are roughly 600 of them  in the civil service proper, spread among the departments and including a number of our ambassadors.) The fun started when this salary proved unattractive and pleas for higher salaries ( to be granted in exceptional circumstances by Ministers  Howlin and Noonan) were advanced. The issue simmered through the summer months with occasional revelations in the media about first one, then another exception. Altogether there are around 40 special advisers to Ministers, costing €3.6 million annually.

Then, with exquisite timing, a story broke on the eve of the budget, that a salary considerably larger than the upper limit , €127,000, or 38% over the cap, had been sanctioned for one adviser , over the objections of the deciding ministers, at the behest of the Taoiseach. His “state of the nation” address later that day, with its solemn hair shirt and belt – tightening tone, did not sit well against such a background.

But worse was to come with the Budget itself. The process of drawing up the Budget should be relatively straight forward, though not easy – particularly where there are deep cuts to be achieved. The guiding principle should be, and usually is,  the eleventh commandment for any civil servant, i.e. “Though shalt not drop your Minister in the merde”. The politically safest method is the broad brush approach – an across the board increase in tax or excise, or cuts in social welfare rates or tax allowances. The important point is that there should be few, or no, exceptions. There will be general grumbling, but a feeling that the hardship is being shared around. Straying from this approach is fraught with political danger.

This Budget had to achieve savings of €3.6 billion by additional taxation and spending cuts. However,  it was hamstrung from the start thanks to an extraordinary public commitment by the two Coalition leaders, given after 100 days in office, that there would be no income tax increases or reductions in the basic rates of social welfare payments. This ruled out inter alia any strategic repositioning of policy on child benefit – still not means tested – or on a third rate of tax on the higher paid. The Taoiseach and Tanaiste should perhaps have reflected that Napoleon’s “hundred days” ended at Waterloo.

Given our financial and budgetary situation this commitment  made no sense – except perhaps to cement politically the Coalition. Hints and leaks in recent weeks indicated some resiling from this stance, with a cut of €10 euro in child benefit among the suggestions floated, together with 2% on VAT and  a new property tax of €100 per dwelling across the board (a wedge thin-end if ever there was one). Then, suddenly, a reverse thrust on child benefit. Given that Social Welfare was still required to find considerable savings, i.e. cuts, clearly there was potential for trouble.

When advocating cutbacks some careful and sensitive attention to detail is required, as quite often some landmine can either go unnoticed or its potential effect be discounted. Thus in 1977 car tax was actually doubled, as the base for calculating engine capacity was changed from horsepower to cubic centimetres. Garret told me later that no one in Cabinet spotted the huge resulting increase in advance. Fianna Fail rode to power soon afterwards on a vote-buying platform that included the abolition(!) of most car tax. More recently, in 2008, Fianna Fail scored a major own goal when seeking to remove automatic medical cards from the over-70s. They  succeeded, something many have not taken on board ; there is now an income ceiling, which could be reduced, were there a government with the cojones to do so – but it cost the party much public support.

This year Social Welfare found another landmine . Buried in the middle of a host of minor targeted cuts, including reductions in winter fuel allowance and differential levels of child benefit for larger families,  was a large reduction in payments to  young disabled people between 16 and 18. Incredibly it was to achieve savings of €7 million, miniscule in a budget of €20 billion, but a very considerable cut in income for the individuals concerned (and their families). In vain did Ministers seek to defend the cuts as rationalising, or as bringing uniformity to all teen recipients. Given that many or most of those affected would never realistically  be “job seekers” – the next stage, at 18 – these excuses cut no ice.

To give the government its due, this cut was rapidly put on hold and is now dead in the water, but the damage has been done. Other  groups affected by cuts are now crying foul, and even if the government keeps its nerve, it is now portrayed as in effect no better than its predecessor. Moreover, as the small print gets pored over, other nasty surprises are being found, some of which make little or no economic or social sense. All could have been avoided had the government proceeded with the child benefit cut originally mooted. Moreover, this year was only the start. Bigger and deeper cuts are promised for the next two years at the very minimum and there is unlikely to be any more handing back  as was done this time by raising the exemption limit for the Universal Social Charge. To cap it all, as the row unfolded,  came the revelation that  Minister Burton’s special adviser had received special sanction for  a salary of €128,000 pa; it was not her lucky week.

The Coalition held, with only one extra defection. But already pundits are asking when will the breaking point be reached. Commentators and critics are focussing more and more on the public sector, and questioning the relevance -and cost- of the Croke Park Agreement. It was scheduled to last until 2014 but already there is talk of an early review. If the choice is between a 10% cut in welfare rates and a 10% cut in public sector pay and pensions I know where I would put my money. Sadly however, both may become necessary. Meanwhile Ireland continues to clock up over a billion each month in extra borrowing just to keep the country going. We should thank our stars that the EU and IMF continue to provide credit.




N.B. I wrote this piece before opening this morning (Saturday)’s Financial Times. Read the editorial. Suffice it to say that Great Minds genuinely do think alike!

It’s been quite a week. First there was the Budget, on which I’m writing separately, in and around which the Coalition managed to squander most of its remaining store of public goodwill. Then came the European Council in and around which ( a Stickley: if you find a good phrase, repeat it) the dust has only begun to settle.

Let’s take Europe first, since what happens to the Euro will determine our fate. Those who harbour any  residual anti British feelings should pause for a moment before rejoicing at Britain’s current isolation. If it becomes permanent, one collateral result, not so far appreciated, will be that Ireland will have lost her heavy-hitter champion against tax harmonisation. In that case – good luck to the Irish negotiators at the forthcoming IGC; they’ll need it!

It is, of course, far too early to predict how relations between Britain and the rest will develop. Remember the “Empty Chair” crisis within the Six in 1965 when De Gaulle’s France boycotted all EC business over attempts to extend the scope of qualified majority voting. The crisis was solved only with the Luxembourg Compromise under which a decision could be postponed where vital national interests were cited.(During the 80s Garret secured an increased milk quota for Ireland, with, admittedly, the goodwill of the rest, by citing a vital national interest.) Any bets on another Luxembourg-style compromise emerging? The gung-ho Tory anti-marketeers may be rejoicing now but there are many more thoughtful voices still to be heard from what remains Ireland’s most important economic and political partner.

However, what happened in Brussels should have two beneficial results here from the point of view of reality checks. Firstly at a political level the outcome  has demonstrated that , in principle, one country CAN be left behind by the others where they feel there is a compelling reason to do so. This should be kept in mind if we are called upon to vote on a new treaty. As I wrote last week, it will not be Nice; it will not be Lisbon. The stakes will be that much higher. We will not be able to sit smugly on our imagined veto. We could be left behind in our minority of one. This needs to be placed at the centre of any public debate on how we decide our position.

Secondly, the proceedings and the outcome should demonstrate that these meetings are NOT about Ireland and that our concerns, important as they appear to us, are peripheral  to the whole picture. The Germans and the French are not out to do a number on us; they are trying to grope towards a solution that will endure. It is very much in our interest to support them in this by engaging constructively in the process. We may or may not benefit from a new and enduring fiscal and financial architecture should one emerge. We shall certainly NOT benefit should efforts in this direction fail.

Only time will tell whether the Brussels outcome will be sufficient to save the Euro even in the short term. The details and the small print have yet to be analysed. Whether the agreement on closer fiscal cooperation to be cemented in several months will satisfy the markets on the separate but inextricably linked and more immediate issue of liquidity will become clear over the coming weeks. There may have to be yet another summit shortly if the markets give the thumbs down. But what are the options?  Is there any workable alternative to expanding greatly the role of the ECB, as more are suggesting?



Another EU summit. Are we now entering the Endgame where the Euro is concerned? Or are we again, like the grand old Duke of York, marching the men up only to march them down again? There have been so many “crisis summits” at this stage – and numerous rescue plans – that the wise course for any commentator is to suggest that there will be yet another fudge.

It might be worth recalling a somewhat analogous situation in history (I don’t want to stretch it too far), i.e. that which faced the thirteen American states around 1790, a number of years after independence and just after the Constitution had  been adopted. The situation was  much less complicated than that facing Europe today, but the issues were not totally dissimilar. The new country had no money and faced a huge debt from the revolutionary war. Some of the states had paid off their debts, others had not, could not or would not. There was a North – South division, with up to 80% of the debt owed to Northern bondholders, many of whom had bought the debt at 10 or 15 cents to the dollar.

Alexander Hamilton, First Secretary of the Treasury, proposed that the new nation assume all state debts and fund them by issuing new bonds. There was strong opposition to this, with some states, like Virginia,  objecting to buying out speculators and assuming or writing off the debts of the big borrowers like Massachusetts. Sound familiar? Congress was deadlocked for six months with sectional animosities mounting. Eventually a compromise was hammered out with Hamilton’s plan being adopted at the behest of Jefferson and Madison.  To put it mildly, the plan worked,  even though,  in the early years of the USA, over half of government expenditure went on debt servicing.

Clearly there is a world of difference between the economic problems faced by thirteen pre-industrial states two centuries ago and those currently facing the multi-layered industrial economies of the Eurozone. And there’s not a Hamilton or Jefferson in sight. While there is unlikely to be any clear, sharp, definitive solution embraced by all without qualification at this week’s European Council, all the indications are that we are edging towards a solution that will hold – along the lines of a much closer fiscal and economic union. The alternative is that the Euro will go down the tube, perhaps in weeks, perhaps in months. A two-tier  Euro will not work; who would buy the lower tier? Who would loan on the strength of it?

But there is another aspect. Any closer fiscal union will ultimately involve treaty change. However, some observers have noted that the survival of the Euro cannot await the several years needed to effect this. Some mechanism will have to be devised to short circuit the procedure. The forthcoming European Council may come up with something here. If it does there will presumably be some form of intergovernmental conference in the very short term either to negotiate (possible) or to accept a definite proposal from the countries needed to make the solution work (more likely).  Given the emerging time pressure to save the Euro the issue for Ireland is what position will we adopt on anything that emerges against the background that any treaty change will involve us in a referendum.

Consider our options. And forget about the bank bailout. In the three years since the infamous guarantee was given, we have borrowed around €45 billion – just to keep our inflated and bloated economy and welfare system ticking over – and that’s without a cent for the banks. Our  recent so-called harsh budgets have hardly made a dent in this structural deficit.  It’s already matching what we will, over time, pay for the banks, and it’s increasing by €50 million every day. The cause of the deficit is clear and, again, has nothing to do with the banks, but seems to be ignored by most of the media and the prevailing public culture of entitlement.

Government revenues collapsed as the air escaped from the Celtic Tiger. The fatal and inexcusable narrowing of the tax base during the years of plenty coupled with an equally inexcusable spree of increase in welfare payments left the economy beached, and obliged to borrow heavily. Masochists can google the website  and read the disaster as it unfolded from the column on the left – previous budgets. Read McCreevy’s boast in the 2002 budget speech that  “after this budget there will be over 690,000 income earners outside the tax net, or  37% of all those on Revenue’s records”.

It gets worse. Cowen, speaking on the 2007 budget boasted “ that nearly two out of every five earners (or 846,000 persons) will be outside the tax net in 2007 compared to one third (or 677,000 persons) in 2004 and one quarter (or 380,000 persons) in 1997. This is a highly significant development.” It was – it was a disaster. What modern economy, with aspirations towards good governance can sustain a situation where 40% of the workforce pay no tax? Meanwhile welfare benefits were  jacked up disproportionately – one commentator has calculated that  child benefit increased under Fianna fail by 330%, the dole by 130% and the standard old age pension by 120%, over a period when inflation amounted to  40%. Even half that largesse applied elsewhere would have been enough for a universal  single tier health service and more besides.

The piper was calling for payment even before the bank guarantee; remember the October 2008 budget to try to deal with the collapse in revenue? Indeed the two budgets in 2009 (April and December – which introduced  a new word for reductions in pay and benefits  – “adjustments”)  were calculated with the bank bailout almost as a side issue. The full extent of bailing out the banks when known gave us a hefty  shove over the precipice for which we were heading; could we have avoided it without the banks? Take a moment to reflect.

So. We have “lost our economic sovereignty”. A disaster? Since no one would lend to us , except at unsustainable interest rates, we are now relying ion Europe and the IMF? How exactly would we function without them? Renege on our debts? Who would  give us credit? Burn the unsecured bondholders? Who then would secure our credit? Leave the Eurozone? What level would the “Punt Nua” settle at  and where would our welfare system be then? And what has been demanded of us? A property tax? Virtually every other country in Europe has one. A water tax? Ditto. Increases in taxes and cuts in spending to help bridge the fiscal gap? Is this so unreasonable – particularly when  we are left to decide on the detail ourselves?

There’s a further level of myth to be faced. Underpinning it, something which has been gaining currency (a dreadful pun!) in recent months,  is that Germany in particular, and also France, have been acting as bullies towards the rest of the Eurozone. “To protect their banks”. Maybe. To protect their economies, and the Eurozone. Certainly.  Had we not had our national economic tsunami would we have expected any less of them? How would we perform in their position? And, specifically, what solutions would we have, were we to be suddenly the major  player, rather than a very minor one, to the  whole Eurozone crisis. Again, take a moment to reflect. Big boys games; big boys rules.

Reflect also on Greece. The whole Greek drama has yet to play out fully. We still don’t know if it will end up a comedy,  a tragedy, or a farce. When Merkel and Sarkozy called time, it was to remind the Greeks that the issue in any referendum was not whether the rescue package should be approved, but rather that it was the only package available and that, if Greece wanted to continue to be assisted, it should vote on the only issue that mattered, whether it wanted to remain within the Eurozone. Where else would Greece get the money to continue to function?  What will happen to Greece remains to be seen. The write-down of Greek debt was because Greece’s borrowing had put it in the economic basket case category. Ireland is not in that situation;  do we want to go there?

What options then do we have? The myth, and it’s a dangerous one, is that we have a power of veto, that we can tell off those nasty Germans and French, tell them we will not wear their solution and that they had better come up with another plan. Mickawber-like we await a solution which will lift our burden of debt so that we can continue on regardless. Any solution will require treaty change and they know our record in that regard. It will not be too long before someone latches on to the 1790 solution in the US, which would suit us –the ECB becoming a type of Federal Reserve, and underwriting all Europe’s debts, including our own. With one bound the Irish hero would be free!  And if we don’t like the small print – more outside control over our economy – we can threaten our veto until we get our way.

It is true we cannot be thrown out of the EU. That would require unanimity and we are unlikely to vote for that ourselves. But we could be frozen out and left behind. There was talk in Europe some years ago – faced with British foot-dragging – that  a central core of countries might proceed to a deeper and closer union. Arguably the Eurozone represented a manifestation of this, though hardly a successful one. Schengen is another  example in operation, even if reluctance by some countries to admit immigrants has wiped the gloss off.  However, these examples show that it is possible for a group of member states to act together without the rest.

What then would happen were a solution acceptable to all except Ireland rejected by an Irish veto? This would not be a Nice, or a Lisbon. The stakes would be much higher. The alternative would be economic meltdown. We might get a second chance. Or Europe might decide to move forward – without us. Forget the veto. What is  to prevent a new and identically worded  treaty being put forward, identical except that it excluded references to Ireland? And Europe moved on without us – and perhaps one or two others. Unlikely? Probably. Improbable? Yes.

Impossible? The European Union would continue, but a new body would function alongside it. We should recall that the League of Nations continued to function throughout the Second World War. Indeed an Irishman, Sean Lester, became its last Secretary General in 1940. But by then the League had ceased to function in any meaningful sense; the major players had departed. Since 2008 we have seen developments until then thought unthinkable become reality. These are uncertain times. Do we want to be left on the field on our own?