A battered sovereignty

Taoiseach Enda Kenny went on Irish national television on Sunday night last and spoke of an exceptional event, that being an allusion to his government's budget and the broader backdrop of economic crisis in the eurozone, Europe outside the zone, and much of the world beyond both.

Kenny spoke about retrieving Irish national sovereignty, a concept that has taken some hits of late given the fact that the Republic is, right now, effectively owned by its creditors, not least the European Central Bank and the International Monetary Fund.

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But most people understand that sovereignty these days, especially when your country is a small, open economy, is a porous and shifting concept.

Even if Ireland was not hog-tied by the terms of the EU/IMF bailout, its purely internal fiscal dynamics would have resulted in a painful budget of spending cuts and tax increases.

Painful, however, barely describes the €3.8 billion kick in the collective gut that Kenny's government outlined over two days of budget speechifying on Monday and Tuesday.

There is relatively little disagreement with regard to how the Republic ended up in this appalling situation. Looking back on a course of events, and with that always great benefit of hindsight, it is not that difficult to spot the policy errors, the hubris, the over-reaching, the outright greed that characterized a decade of high on the hog living by some, though by no means all.

And that brings up an especially harsh aspect of the budget and its stated aim of restoring some degree of fiscal order somewhere down the road.

Not everyone went mad during the Celtic Tiger boom years. But even those who kept their wits about them are now required to share the burden of the hoped for process of economic recovery.

So this budget will hurt the innocent as much as it does the innocent. Just as Ireland is not isolated from the world, basking alone in a sovereign sea, neither is any citizen, man woman or child, living within the country's borders.

Enda Kenny vowed in his speech to the Irish people that what his government was about to unveil in its budget was part of a process aimed at ensuring that Ireland never ends up in a situation like this again.

That is to be hoped for. But history, as we know, has a habit of precisely repeating or closely mimicking itself so there is no guarantee that some future generation in Ireland won't fall into the same, or a similar, monetary crevasse in which the Republic now dangles.

But, for the time being, it's a sure bet that Ireland's parlous state will serve as a brake on any return to the reckless behavior that was a hallmark of the pre-bust years.

Meanwhile, and looming over Ireland like some monstrous storm cloud, is the uncertainty surrounding the future of its very currency, the euro.

Coinciding with Irish budget week, European leaders are gathering in Brussels in what is the latest attempt to deal with a sovereign debt crisis (that word again) that is spreading like a contagion through eurozone economies, not least those of relative giants such as Italy and Spain.

All indications are that the Germans, who are calling the shots for everyone else right now, at least when they so choose, are in favor of more centralized control of budgetary matters within the eurozone, currently comprised of 17 of the 27 European Union members.

Such centralized control would likely put another dent in the image of Ireland, and other smaller zone members, as a sovereign entity within a larger whole. But the idea of a centralized Europe has always been the ultimate vision behind the great post-war European experiment.

As it happens right now, the process leading to the actual implementation of that vision is speeding up, though clearly not for the most favorable of reasons.

Literal sovereignty, so, is a separate vision that is being dragged along for a rough ride and is now, in truth, more image than substance.

Still, by delivering his speech, and by his government outlining its budget before the next major turn of the screw in greater Europe, Enda Kenny has at least preserved an image of a nation in control of its destiny.

Timing isn't necessarily everything, but sometimes it can be at least something.

 

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