Former Irish Prime Minister John Bruton said bailed-out countries need to take responsibility for their own problems, with Germany “‘very unfairly treated” in the debate over solving Europe’s debt crisis.
Greek President Karolos Papoulias last week criticized German leaders for comments about his country as stalled talks stoked tensions between Greece and the northern European countries funding its rescue. Papoulias, who fought against the Nazis during World War II, said he didn’t accept “insults” after Germany’s finance minister blamed Greece’s New Democracy party for delaying a bailout agreement and his deputy, Steffen Kampeter, compared Greece to a “bottomless pit.”
“It’s easy to start scapegoating, it’s easy to start resurrecting historical stereotypes to avoid facing one’s own responsibilities,” Bruton said in an interview in Frankfurt yesterday. “We in Ireland did a lot of that including in the first half of the 20th century where we tended to blame the past record with the British for every problem we had.”
Ireland, Greece and Portugal have sought bailouts, as investors shunned their securities amid spiraling debt. Greece yesterday won a second rescue, while Ireland is seeking help from the European Central Bank to deal with its bank debt. Bruton said in September the ECB didn’t control banks enough, partly because of “nationalistic political reasons.”
“You could argue that the people who lent the money to them have a responsibility, and they do, but nobody forced Greece to borrow the money, nobody forced Ireland to borrow the money or banks or Irish households to borrow the money,” Bruton said. “One must first face up to one’s own responsibilities.”
Ireland stepped out of bond markets and sought a 67.5 billion-euro ($89.4 billion) international rescue in November 2010, amid concern that the nation’s banking woes would push it into bankruptcy. The country’s financial system came close to collapse, after a real estate bubble burst in 2008, with house prices halving.
Irish Social Protection Minister Joan Burton said in a speech last week that while “the main responsibility for Ireland’s plight rests with Irish institutions,” the ECB had helped fuel “a credit bubble” in Ireland and other peripheral countries.
“We appreciate the support that we have been extended by the ECB, the EC and the IMF,” she said. “However, we do not feel that citizens in the peripheral countries should carry an undue burden.”
Bruton, who was in Frankfurt to promote the Irish Financial Services Center of which he is chairman, said the fiscal compact drawn up to speed sanctions on high-deficit euro-area states and make members anchor balanced-budget rules in national law would gain more credibility if the European Union president was directly elected by voters.
“It will build the sort of emotional cement through Europe that it needs to have,” Bruton said. The “huge new powers” bestowed in the compact “should only be exercised by people with a democratic mandate.”