According to Thomas Geoghegan in an op-ed in the New York Times, Ireland is entirely to blame for its current dire economic situation and should not rely on Europe to bail them out of their debt with foreign banks.
Until Ireland joined the European Union it remained a small “helpless” country but now Geoghegan says it seems to expect financial backing from the European Union, which he says really means Germany and France.
“The Germans can support their own welfare state, but not Ireland’s and Spain’s.
The E.U., really Germany, took compassion. It gave Ireland a home in the E.U., set it up with money, all sorts of subsidies. And what did the Irish do in return? Did they offer grateful novenas?
Unfortunately not, instead he said “they cut taxes to lure corporate headquarters away from high-tax Germany and France, which were paying high taxes partly to fund the Irish. Ireland took up other U.S. ways: it kept taxes low and went into debt.”
France and Germany attempted to improve the European Union, while Ireland stuck to being greedy and becoming rich. However, soon everything came crashing down upon them, and Germany had to come to their rescue.
“To bail out the Greeks and Irish and the rest, Germany has had to prop up the euro. O.K., the Germans had an interest in doing so, as the financial center of the euro zone. But now, to prop up the Irish for a third time, the Germans are being asked to run big deficits at home,” said Geoghegan.
He questions whether Ireland understands the concept that they cannot keep running up a massive external deficit. He said “As Ireland, Spain, Portugal, and all the other orphans taken into the E.U. by the rich Germans and French, they ultimately have to earn their way.”
Geoghegan said “Being in the clutches of foreign bankers, these countries have lost their freedom of action. The big problem with Keynesian economics, as we now know (as Keynes himself knew, but most of his disciples don’t) is that it assumes the country in the slump is not already in the grip of foreign bankers.”
He continues “The countries like Ireland and Spain, which should be running Keynesian-type debt right now, can’t borrow.”
Describing an analogy coined by Martin Wolf he said: “It’s simply the difference noted by Martin Wolf between worker-ant countries like Germany, which pay their way, and grasshopper-countries like the U.S., Spain and Ireland, which are debtor countries and have to borrow. Why should the Germans go into hock to bail out the Irish yet again, so the Irish can go back to stealing their business?
“On Independence Day, we should think of all the countries that have lost their independence to the global banks.”