THE EUROPEAN Central Bank should recognise its own failings in the events behind Ireland’s financial crash, Minister for Social Protection Joan Burton said.
While saying prime responsibility for the crisis lay with Irish people and institutions, Ms Burton said she agreed with the argument by former taoiseach John Bruton that European bodies also played their part.
“If we are to overcome this crisis and avoid a new one, everybody has to be self-critical, including the ECB, for the reality is that the ECB monetary policy also played a role in causing the crisis, fuelling the credit bubble in Ireland and in other peripheral countries.”
Addressing the Brussels branch of the Institute of International and European Affairs, she said the “Merkozy” alliance between German chancellor Angela Merkel and French president Nicolas Sarkozy had worsened the debt emergency at times.
She also said the crisis had led some Irish people to take an increasingly dim view of the EU.
“There is among some people – and I think it’s important to recognise it – an increasingly hostile attitude to the European Union in Ireland.
“That’s being fuelled in part by the growing strength in Ireland of British media, who are traditionally eurosceptic, but I also think it’s partly because Irish citizens feel that perhaps they are being asked to shoulder too great a share of the bill for the financial crash.”
The question raised for the citizens in programme countries, as bailout recipients are known, was whether they could carry an undue burden. “The ugly scenes in Athens are a far cry from the dreams of the EU’s founding fathers who wanted to unite Europe in a common economic community.”
Ms Burton said the ECB’s assistance to Ireland since the crisis erupted was very significant.
Responding to reporters’ questions, she said she always recognised that the major responsibility lay in Ireland, but added that the role of the ECB was a matter of historical fact. She believed the ECB itself was very well aware of that.
She agreed with Mr Bruton that the ECB should acknowledge that the development of the euro led to enormous flows of credit into Ireland. This was not regulated, and contributed to the easy availability of credit that partly fuelled the boom. “I think that that’s a very honest observation.”
Ms Burton said she viewed Franco-German summits or the Merkel-Sarkozy duo embarking on “a walk on the beach somewhere” with a sense of depression.
“I think that on some occasions that are well-documented the joint press conferences added to instability in the markets.
“I think we need to have a structure where all of the 27 [member states] are clearly involved.”
On Europe’s new fiscal treaty, she said the Government awaited the view of the Attorney General on whether there should be a referendum.
“I certainly wouldn’t be anxious to rush into a referendum if the advice is that it’s not required because the focus has to be on the economic recovery and getting the country back on its feet.”
