So, it's finally official. We are taking the ECB/IMF bailout. And, well, is this such a disaster, really?
The various parties involved have been falling over themselves to insist that the bailout will not effect the Holy of Holies, the corporation tax. Merkel has stepped down from her effective position of demanding it be raised. The French say that they believe it will be raised, and that Ireland, due to its low base, has some leverage to raise it without too much issue, but they are also not demanding it. Sweden and Britain, who have not, as yet, officially been asked for help, appear to be okay with it too.
Separately, everyone is insisting that the deficit cuts have not been effected, that the cuts had been discussed with the IMF over the last while anyway (which seems plausible enough) and that the deficit reduction goal remains at 15 billion over four years.
So, assuming that these two claims are true, we are going from a situation in which unscrupulous incompetents with only their own short-term interests in mind are pushing a punitive series of cuts, to a situation where a selection of people who have some long-term interest in the stabilisation of the Irish economy are pushing a punitive series of cuts. In one case, it would be necessary to return to the bond market to attempt to sell debt at a probably absurdly high rate, in the other debt will be available at a more reasonable rate.
Most importantly, I think, in practice outside forces will take over the resolution of the banking mess. This is important, because as we have already seen, the banks are not too interested in providing all of the information they have available to them, and FF/Greens are not too interested on pressing them on this minor, tiny detail. I doubt that the ECB and IMF will be so lenient, which is a good thing; it lessens the chance that next year we'll have further unexpected billions of bad debt sprung upon us.
The talk of loss of sovereignty is, I think, a bit of a red herring. We had in effect already lost our sovereignty to the markets and to the banks who have been allowed run roughshod over government policy, protected while not perhaps giving quite so much information or cooperation as they might. Now, we are transferring it to people who at least may be vaguely competent.
It's a sad day when we have to welcome something on the basis that it is likely to be less incompetent and untrustworthy than Fianna Fail and the Greens, but that seems to be where we are right now. I suppose that we can be comforted that it could have been worse. If the bailout had not gone ahead, then, why, we'd still have the same punitive budget, but it's hard to imagine that the banks would be dealt with sensibly and firmly.
And what happens when the dust has settled? I think it's pretty clear at this point that FF and the Greens are doomed, and rightly so. But what is the alternative? Enda?