Teach A Man To Fish

With all the talk of bailouts from Ireland to Greece one thing has been abundantly clear, the people at the big boys table want their money back. Of course like any ‘good’ lender the ECB is keen to recoup its monies, but at what cost. The bigger, more financially secure, members of the EU have struggled to come to terms with the fallout of the biggest economic crisis in world history. Like a slighted lover  revenge seems to choke the air and daggers have been seen to flash under the robes of many discontented member states. Through all of the troubles of recent times Europe has remained fixed to its position that countries must take responsibility for their actions and begin to make reparations. What Europe fails to see properly is the plight of the countries involved and its own role the cause of the debacle.

The Bigger Picture

What Europe needs to understand is that its not payback time, its pro-active time. The solutions to the problem do not lie simply in asking for their money back. It must give countries an opportunity to prosper and grow and not simply to survive. If countries cannot be progressive then it stands to reason that the bailouts will not be worth the paper they are printed on.  Helping (or teaching) countries to be more competitive in the global economy by treating them like a business. Create a SWOT (strengths, weaknesses, opportunities and threats) analysis to understand where the countries must go to create jobs, increase lending to SMEs and compete with bigger neighboring countries.  But with the onset of new sense of country protectionism this is unlikely to happen and it will cause irreparable damage to the future of the union and the euro.

A Union Fractured

When things were going well and money was pouring into every facet of European life, we were all friends. A pat on the back for Ireland doing so well and a sense of self satisfaction that Europe was at the forefront of a new economic utopia sweeping the world. Every country was buoyed by the prospect future of easy money and good living. However, when the seams began to rip apart countries went into self preservation mode. Like Judas at the last supper old friends claimed they never knew each other. Suddenly with bonds broken, countries fell back to their own borders to await the inevitable fallout and soon the union looked fractured and broken. Now instead of France and Germany been seen as part of the answer, they are seen as part of the problem. French president Nicolas Sarkozy’s adamant conviction that Ireland must relinquish its 12.5% corporation tax in order to get a better deal on our bailout, is proof of that point. Old anxieties have arisen to show up cracks that were paper over by financial prosperity. 

Taking Responsibility

You may or may not have seen the exchange of words between Manuel Barroso and Joe Higgins, where Higgins challenged Barroso on the fact that the EU and the ECB had not taken enough responsibility. Mr. Barroso did not take to kindly to this suggestion and insisted that Ireland's problems were of her own making:

The EU and IMFs inability to look back and take a certain amount of responsibility for the happenings over the past number years will cost it dear. Its time to admit that they got it wrong and that they are continuing to do so. Lending out more money to stem the tide caused by lending is an idea that could have only been cooked up by an entity in denial. The same entity that said it was good to borrow, borrow, borrow now allows itself to believe it had nothing to with the crisis and sits patiently with its head in the sand, unable to hear the can being kicked down the road.

Teach a Man To Fish

What the EU needs is new direction and a new way of thinking.  This thinking must involve working with countries to build an economic future which is good for them and the EU. A new way of thinking needs to be present that doesn’t involve ideas that seem to have come from an economics undergraduate; Sack public sector workers, increase taxes and make cuts to your vital services.  While on the outside those suggestions seem like good beginner solutions, the real problem is still left to wallow. Where will these countries produce jobs and begin to build an economy fit for purpose. In recent months we have seen a air of positivity sweep into Ireland. We are still in dark days but rays of light are beginning to poke through the clouds. We are coming up with solutions to solve our economic problems, while the ECB stands holding the bill.  Our ideas, our initiatives, our schemes and our SMEs are creating solutions.

Maybe the EU/ECB could learn a thing or two from us: Teach a man debt and that's all you’ll get, Teach a man to fish and he’ll bring you financial stability.