Speaking in Paris last week, Leo Varadkar said that Ireland has paid a high price for being in the euro in not being able to inflict losses on bank bond-holders, and that if this country had not been in the euro such bond-holders in Irish banks would have been “burned.”
“Without the backing and restraints of the ECB we would certainly have had to embark on more aggressive bank resolution policies, which would have meant passing on major losses to financial institutions here in Paris and elsewhere,” he continued, obviously feeling that it was safe enough to spell out in Paris a reality that he would not dare tackle at home.
It’s straightforward enough, really. As he said. “Being part of the euro also prevented the Government from devaluing our currency, which would have enabled us to ease the burden of the financial crisis.
“Had it not been for our membership of the euro and the constraints that go with it, Ireland would have pursued, and would have had to pursue, very different policies. We would certainly have devalued our currency, giving us an unfair competitive advantage over our neighbours.”
But surely if one’s loyalty is to ones own country, whose people elected you to government, you would act in their interest first? Instead we are treated to this outstanding example of Europhilia in a government minister. Needless to remark, devaluation is all about competitive advantage, so Leo wasn’t really serious.
But he was serious enough when he said last month that he is concerned that a referendum on the planned EU Permanent Austerity Treaty would focus not on its content but on domestic issues. He said he did not think referendums are “very democratic,” and that, by and large, referendum campaigns in the past were never about what they are supposed to be about. He would be concerned that a vote on the EU plan would focus on extraneous issues, such as septic tanks, bond-holders, the banking crisis, or Government cut-backs.