A special case in being bullied by the big boys

COMMENT

Ireland being described as a ‘special case’ by the French president Francoise Hollande is the latest hope in the diplomatic back-and-forth going on in Europe at the moment.

It comes just days after Angela Merkel reiterated the opinion of her finance minister that historic bank debt, or legacy debt as it’s sometimes called, would not be covered by the European Stability Mechanism rescue fund.
Although Taoiseach Enda Kenny has had phone conversations and face-to-face meetings with the two main power brokers on this issue, the extent to which Ireland can be seen to hold any sway or power with regard to its own future is very much in doubt. Appeals to the powerful will be listened to of course with diplomatic politeness but if the concessions to Ireland are seen to be too expensive, too politically awkward or potentially destabilising to the European project as a whole, then there will be no concessions.
The question of why Ireland should be paying these debts is, by now, a very old one but it is worth revisiting. Indeed, it is worth reconsidering to its philosophical roots. Why is it considered the morally correct thing to do to pay debts? It is a phenomenon of our times but was not always the case.
Throughout history, the moral majority have switched sides on this issue on a number of occasions. Usury as a practice was outlawed by many of the major world religions for much of their historical past. The Catholic Church changed its position because one pope wanted to protect the accumulated riches of the church and for no other reason. Legal protection for debtors changed over time into legal protection for creditors and with this came the change in the public perception of the morality involved in the transaction.
The institutions of the IMF and the World Bank, in the aftermath of the Second World War, placed a massive world institution on the side of the lender and recent history has continued that trend, when dependence on usury as a means of populating your life with consumer goods became general practice for people in the industrial west.
We are still reeling from the results of this chaos and the Irish State is left to cope with the legacy. Despite repeated and desperate appeals to Europe for relief in the servicing of the massive debt, the situation remains unchanged. At present, we are getting different indicators every day with regard to the issue and whether any help will be forthcoming on it.
What has not changed is the moral position. Ireland cannot be said to have any moral compulsion to pay, or any responsibility with regard to the money. I have deliberately not said money owed because I don’t think money is owed. Despite the lack of a moral imperative in this, there are very real political and financial reasons why Ireland must pay. There is a gun placed firmly against the temple of the nation, loaded with serious economic and political consequences if Ireland pulls the plug and refuses to play ball.
This must be constantly and repeatedly stated. Ireland is being blackmailed, harassed and coerced into paying this money despite the serious socioeconomic consequences for the population. Greece is similarly at the mercy of its European partners but, mostly, both nations are subject to the strong-arm tactics of the IMF and the markets.
Not paying debts, we are told, will so damage Ireland’s reputation in the eyes of the market that it would never be lent to again. This is the same market that caused the problems that have been devastating the world since the economic crash, so I think we can safely say we are in no position to say a solitary word about reputation.
The troubling thing is that Ireland, like all nations, will be forced to borrow again in the future. That is how the world system works. It is an every growing cycle of usury, debt accumulation, boom-and-bust capitalism. This system is not a new one. It has been shown historically that in ancient Mesopotamia a similar system was in place, where credit systems led to accumulated debts over time that had to be wiped clean by new monarchs when they came to power.
What is important to note in this example is that, in such a cycle, the end result is always crippling and destructive debt accumulation whereby debt is written off. The existence of bankruptcy as an accepted part of the capitalist approach to life is indicative of just how important a role gambling, credit and risk-taking are to the capitalist mindset. Of course in bankruptcy the capitalist writes off debts they themselves have accumulated. What we find in the current case of Ireland dealing with legacy debt is the nation taking on the debts of others and paying them. This has no place even in the dominant system of world neoliberal capitalism and has inspired only shock and derision, even among those who are benefiting from Ireland’s ‘generosity’.    
In adhering to the payment of legacy debts, Ireland is simply ensuring its continued membership of this very dangerous club. It will be argued that Ireland’s continued membership is essential to its future and this cannot be completely dismissed. It begs the question however of what cost must be paid by the Irish people in order for the nation to belong to this club.
Just as Developing World nations have, in recent decades, devastated their civil services in order to access the IMF structural funds that brought with them the promise of ‘development’, now Ireland must do the same in order to maintain its place at the table, both in Europe and internationally.
It is doing this not out of any moral obligation but because it is a small fish in a big pond. It is not punching above its weight, it is being punched, bullied and threatened into the action by the powerful nations and organisations that are euphemistically referred to as partners.