There are a number of mistakes cited as to why Ireland has arrived at the point of taking a massive external bailout, from being a member of the Eurozone to the massive debt property bubble built up in the last decade. None of the commentary however cites its departure from the United Kingdom as the source. No one is saying a condition of the money now is that it needs to rejoin either. This is the normality of independence, and when Scotland gets it, no one will look back either.
After announcing the money, Chancellor George Osborne said Ireland "were a friend in need" and did not add that the bailout was necessary due to Ireland’s independence. This was in contrast to former PM Gordon Brown, who was quick after the bailout of RBS and HBOS in 2008 to say that an independent Scotland would not have been able to take the action that he had. Debatable sure, but if we are going to engage in pure speculation, it is also clear today that that had Ireland been part of the UK, the exchequer would not have been able to mount the rescue which has just happened by themselves. We live in an interdependent Europe and interconnected world – Scotland’s future doesn’t depend on London.
The UK banks may need another bailout next year. That is what the £7bn UK contribution is all about given the exposure of UK banks in Ireland. It is also a proportionally modest contribution in terms of the overall £70bn package. 2011 is going to be the high water mark for capital hungry UK banks that need to find £250bn in that period. If they don’t manage it we could be looking at Bailout II. There is no guarantee the UK will be able to raise the money. The Tories spent the general election year talking up a market attack on the UK. And remember in 2009 the worried Labour government were saying IMF bailouts were “like getting wellbeing care or even like going to a spa to recuperate”. Or maybe Norway would help us out.
What Ireland has got now is a loan at a reasonable rate of interest. This money would not have been otherwise available at that price because “the markets” have decided that Ireland should be charged more. The price went up after the country announced harsh austerity measures – at the behest of said markets who then decided that austerity meant low growth and higher risk on the debt.
Ireland’s mistakes were Ireland’s to make, just as Norway’s success has been their own. It’s what is done with political power that matters. We can never know what economic policies Holyrood prime ministers would have pursued over the last few decades had we been independent. What matters now is that if we are to depart a bankrupt Britain, it can’t just be an opportunity to escape the cuts, get the investment in jobs and infrastructure that is needed, and go back to how things were done but with kilts on.
A new kind of economy has to be built on social democratic lines with environment at its core. The current crisis has led us all to seek answers, and there is much discussion still to be had about what the priorities and hallmarks of a new economy should be.
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