“Bailout is a perjorative term,” spluttered Irish Prime Minister Brian Cowen in parliament Wednesday, after his opponents furiously accused him of wishful thinking.
Irish ministers are desperate to avoid what officials term the “reputational damage” that the word “bailout” could inflict on the country, which before its financial collapse was known internationally for the boom economy of the Celtic Tiger.
But most of all the Irish shudder at the possible humiliation of having to accept part of any bailout from the United Kingdom, from which it has proudly preserved its independence for 89 years.
"Was it for this ... the men of 1916 died, a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side?" asked the Irish Times in an editorial today, referring to the 1916 rising in Dublin against British Rule.
“The white flag has been raised, the towel has been thrown in and like the ‘prowler’ waves off the west coast they’re coming in on Thursday,” charged opposition leader Enda Kenny of the Fine Gael party, comparing the arrival in the Irish capital of the officials from Britain, Brussels and the IMF to freak waves known as “prowlers” that battered Ireland’s Atlantic shores last week.
The prospect of a British subvention to Ireland arises because the United Kingdom has a huge exposure to Irish banks — amounting to $222 billion last March according to the Bank for International Settlements. The United Kingdom is acting separately from the European Central Bank toward the Irish crisis because, while it is a member of the European Union, it does not belong to the eurozone.
Regarded historically by London as a former British province of little economic consequence, Ireland has become an enormously important trading partner of Britain in recent years.
“Ireland is our closest neighbor and it’s in Britain’s national interest that the Irish economy is successful and we have a stable banking system,” said George Osborne, British chancellor of the exchequer.
British Prime Minister David Cameron revealed to the House of Commons Tuesday that “we actually export more to Ireland than we do to Russia, India and China combined.”
Ireland is Britain’s fifth largest market, taking 6 percent of British exports, including cars and machine parts, and large British supermarket chains like Tesco dominate Irish cities. Britain’s portion of any bailout, rescue plan, facility or whatever the Irish government wishes to call it, and which it still insists it has not requested, would be some 7 billion pounds ($11 billion), British finance officials estimate.
The fear of national humiliation by association with other countries that were bailed out — most recently Greece, which is more dysfunctional than Ireland — helps explain the stubborn insistence by Irish ministers that negotiations for a bailout are not under way, despite reports by foreign media to the contrary.
Dublin ministers contend Ireland needs a loan, variously estimated at between 50 billion euros ($68 billion) and 80 billion euros ($109 billion), rather than a state bailout, to support its banks following the collapse of Irish real estate prices.
Stung by the bad press Ireland is getting abroad — El Pais in Spain said, for example, “Ireland is burning and the weakest economies of southern Europe fear that the flames will come creeping into their own territories” — former Irish Times editor Conor Brady argued that the government should get the message out that Ireland has a positive message to sell.
“A good deal of the kicking has been deserved, but not all of it,” Brady wrote, citing Ireland’s democratic stability, solid institutions, vibrant high-tech manufacturing base, innovative workforce and growing exports.
Much of the criticism of Ireland, however, originates right here, and is laced with black humor.
“It’s like the last days of the Roman Empire round here,” scoffed opposition Labour member Pat Rabbite in the Irish parliament.
“Ireland needs a new credit rating, Moody & Poor,” quipped Colm O’Regan, a technology consultant turned comedian, at a “comedy and economics festival” in Kilkenny.
And practical considerations outweigh all else. Dublin businessman Michael Keane of Insight Consultants, asked how he felt about the prospect of the old enemy Britain giving an $11 billion handout to Ireland, raised his eyebrows and responded, “Will it be enough?”