Ireland’s star still ascendent in Davos despite Taoiseach’s remarks

Friday 27 January 2012 12.18

 

By Tony Connelly, Europe Editor, in Davos

Despite the furore at home, Taoiseach Enda Kenny’s remarks that “people went mad borrowing” barely raised an eyebrow in Davos.

The Congress Hall in the main Davos Congress Centre was about a third full when the discussion panel entitled Rebuilding Europe began at 1430 Swiss time.

Across the scheduling spreadsheets there are dozens of meetings, forums, panels, debates in various formats over the six days of the World Economic Forum and in terms of box office, this would be a mid-table draw compared to the major crowd pullers like Angela Merkel, David Cameron, Mario Draghi and the like, not to mention celebrity economists, artists and future-thinking gurus.

Mr Kenny was joined in the discussion by the Danish prime minister and current chair of the rotating EU presidency Helle Thorning-Schmidt, Jyrki Katainen, the prime minister of Finland, and Bronislaw Komorowski, the president of Poland.  President Barroso, head of the European Commission was unable to attend the event.

The line up balanced a triple A creditor country known for its adherence to fiscal discipline (Finland) with a country in receipt of taxpayers money from such a country (Ireland).

Helle Thorning-Schmidt is one of the few centre-left EU leaders, while President Komorowski provided a perspective from an EU country outside the eurozone (Poland) which has escaped recession and which is a key voice in the current negotiations on the incoming Intergovernmental Treaty.

The Taoiseach had just completed a series of meetings with a number of US corporate CEOs including heavy hitters from Facebook (chief operating officer Sheryl Sandberg), Citi Group and Liberty Global.  Officials travelling with the Taoiseach expressed satisfaction at the meetings with the barest of hints that some may yield announcements in the near future.

Mr Kenny also told reporters that several political and business leaders from around the globe had expressed a warm reaction to Ireland’s current reputational position, and that he had held a number of positive phone calls with four EU leaders (from Italy, Austria, the Netherlands and Spain) on the prospects for a concession on Ireland’s debt burden as it relates to the bank bailouts.

So perhaps Mr Kenny was in expansive and relaxed mood when the discussion began.

The issues at hand were predictable enough: how would Europe emerge from the crisis, what effect would the new fiscal stability treaty have, who was to blame for the crisis, how could austerity be combined with growth, which method of European decision-making would prevail, the intergovernmental way (seen as giving big countries more influence), or the community way (where institutions like the European Commission have greater influence and are generally favoured by smaller member states like Ireland).

Ireland was several times held up as an example (indeed, the only example) that other countries like Greece and Portugal which are in trouble, should follow.

The only time the audience broke into applause was an impassioned intervention by the Danish prime minister over the question of making Europe and its institutions more exciting (or relevant).  She spoke of a fictional 25-year-old girl who was a graduate who couldn’t find a job and was still living with her parents: it was only if Europe could create the conditions where she could find a job that the EU would be relevant to her.

Mr Kenny’s fateful remarks came early on, when he was asked by the chair of the discussion Lionel Barber, the Financial Times editor, about what happened to the Irish economy.

Later Mr Barber blogged: “Enda Kenny, the Irish PM (Taioseach) was also quietly impressive. He played the straight-talking politician administering painful medicine to his countrymen who went ‘mad’ during the property boom. Kenny is feeling a little more confident after a return to the markets this week which saw a favourable bond swap.”

The Taoiseach has reason to feel confident on a number of fronts.  Apart from the bond swap officials are quietly confident that the text being negotiated at official level is addressing Ireland’s main issues, even if some hard bargaining is still a possibility when EU leaders meet for a summit in Brussels on Monday.

Those issues include the debt brake and where it is enshrined in law.  An insistence by Germany that it be included in member states’ constitutions has been watered down by the word “preferrably,” not least because of the vast divergences in how different countries’ legal systems operate.  There will also be nothing in the new treaty which affects Ireland’s current bailout.  And finally, the government’s campaign to reduce the burden of the bank bailout, especially the onerous cost of repaying the Anglo promissory notes, appears to be gaining some traction at EU level, although there is a long way to go and any concessions will require the consent of all 27 member states and the ECB.

Whether Mr Kenny was referring to “THE people” or “some people” when referring to “mad borrowing” will be the source of political casuistry over the coming days.  A government source insists that the Taoiseach has on numerous occasions said the Irish people were not collectively to blame for the crisis, and that he had repeatedly expressed empathy with the people over the sacrifices being made.

However, in the highly charged climate at home the remarks have overshadowed the Taoiseach’s first appearance at the World Economic Forum in Davos, whether or not Ireland’s star is on the rise again in an international setting.

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