The silver facade of Dublin Castle was radiant in sunlight yesterday as EU finance ministers and their retinue descended on the former seat of British power in Ireland. These talks were all about European power.
The meeting, which continues today, is the biggest in Ireland of the EU presidency, with ministers and central bank governors from all 27 member states in attendance, as well as the top officials from the European Central Bank and the European Commission.
Presidency staff were on site from 5.30am in preparation for the event, which kicked off just after breakfast with a meeting of ministers in the printworks of the castle. By lunchtime the adjustment of the maturities deal was done and dusted.
Concerns that the deal would be blown off course had surfaced last week in the wake of the Cyprus debacle. The rejection by Portugal's constitutional court of its government's proposed budgetary adjustment measures last weekend also threatened to derail the decision. But the deal was done. In part, the move represents an effort to take back control of the euro zone crisis after Cyprus shattered the calm. Talk of a raid on the island's gold reserves shows that affair is still unresolved but euro zone officials are anxious to regain the initiative. Ensuring Ireland's successful return to the markets at the end of this year is enormously significant for Europe. Moodys greeting the decision as "credit positive" was a welcome endorsement but the agency has yet to lift its junk rating on the Irish debt.
Confirmation that the Cyprus bailout will be larger than anticipated cast a shadow over the talks.
The Dublin Castle gathering was the first opportunity for finance ministers to consider the fallout since they met in Brussels earlier this month to revise the original Cypriot deal.
The way in which Europe will deal with future bank crises is also under discussion in Dublin. The new phenomenon of depositor “bail-ins” – in which deposits above €100,000 would be hit in the event of a bank collapse – is increasingly likely to become a permanent feature of Europe’s response to future banking crises, perhaps as early as 2015. It’s a sobering thought, and a signal of the intractable challenges that remain to be overcome.
As well as the maturities deal, the event gave Ireland an opportunity to set out its stall. Beyond the gathering of ministers, Taoiseach Enda Kenny held one-to-one meetings in Government buildings, with a clutch of EU figures, including internal markets commissioner Michel Barnier.
Central bankers were seen wandering around the State apartments in the castle after lunch, while ECB chief Mario Draghi conducted bilateral meetings one-to-one in a private room. For the hundreds of international journalists in town, the event was an opportunity to contextualise the Irish bailout story.
“Last time I was here, the barmen were talking about the promissory notes; today they’re talking about the maturity adjustments,” said one seasoned reporter. Most are positive about the Irish story.
With the streets around Dublin Castle chockablock with broadcasting vans, news organisations around the world carried the Ecofin meeting. The event was a big organisational and technical challenge for the Irish presidency. “Logistically, it’s been very well organised,” said one Nordic cameraman.
"Yes, the Irish know how to get things done," chimed in his colleague. As Ireland sets about seeking direct recapitalisation of AIB and Bank of Ireland through the ESM fund, taxpayers will be hoping that the ability to get things done will sends the right signal.
