Seamus Mallon the former deputy leader of the SDLP and ultimately Deputy First Minister of the Northern Ireland Executive once (allegedly) likened the Good Friday Agreement as a “Sunningdale for slow learners“. No doubt he was thinking about the progress (not to mention the numerous lost lives and injured) that had been missed over the period between the signing of the Sunningdale Agreement in 1974 and the Good Friday Agreement in 1998.
Well, as we all awoke to the agreement in Brussels to mitigate some of the more pressing economic conditions of the so-called bailout on Ireland and others, I could not but feel some sense of a similar thought process. Do not get me wrong I am really pleased that at last we seem to be getting some sort of a handle on our current challenges but why is it that it takes almost three years (not to mention a previous decade) where national and more particularly international policy-makers fail to comprehend even the most basic tenets of economic thinking?….Something that surely must, at some point, have entered their respective heads was that resolving major international debt problems which took a decade or more to create would require at least something of a similar order to resolve. While I am at it surely it must have been recognised that resourcing, in the Irish case, the expanding socialisation of private debt, on the basis of short-term and ad hoc debt instruments was not really a terribly practical way to deal with such structural difficulties….and I am not even referring to the on-going financing of the Banks in Ireland through even more short-term instruments in the Central Bank and the ECB!!!!
I know I am being somewhat simplistic when I think that the financing of long-term, property-based, debt on a short-term basis is bound to cause major economic disruption, particularly when the international market place is darting around like a shoal of mackerel in a turbulent Atlantic. This might have caused senior policy-makers to think that a longer-term perspective on how to manage our way out of our shared debt problems in Europe, at least two to three years ago, if not at least a decade ago, was what was required? Of course there must now be a realisation, or am I being overly positive because the summer seems to be finally making an effort, that moving towards the long-term management and working out of our debt (and I mean European debt!!) must mean that greater fiscal integration is a necessity within the Eurozone area. Mind you not if we continue to see the short-termism we have had to put up with over the past few years…..As I said…another Sunningdale for slow learners. This could become a whole new area of academic endeavour for a couple of decades and there has got to be at least a few Nobel Prizes in there somewhere!!
PS when are we going to stop calling the ECB/IMF/EC and associated financial packages a “bail out”? Last time I looked these are loans with interest demands falling on the Irish exchequer…I thought a bail out would mean no follow-up demands for a return of the money given to us or maybe I am confusing that with the Marshall Aid loans given by a powerful American economy after the Second World War? Lets start calling them what they are….They are loans which must be paid back…..and most definitely are not a bail out!
