Ireland's State of the Nation Address

Ireland's Taoiseach, Enda Kenny, made what is only the 6th state of the nation address on Sunday evening before the new government's first austerity budget (to be announced over Monday and Tuesday). Brian Cowen, the last Taoiseach, was criticised for not making an address, and was probably held back by the memory of another past Fianna Fáil Taoiseach, Charlie Haughey, who famously told the country to tighten its belt while he was far from doing the same in his own life. Ireland's also had some experience of austerity speeches that have been mocked:



Here's Enda's State of the Nation address:



Enda will probably get some credit for making the address, but the devil will be in the detail of the budget, and the debate that follows will be inevitably overshadowed by the actual changes and choices made by the budget. Ireland has been living under austerity budgets for so long that the further cuts and tax increases by the government will be increasingly painful: we've long run out of low-lying fruit.

From a Eurozone perspective, this is the first major signal that the Irish government will accept treaty changes, which it had been opposing as recently as Kenny's visit to Berlin two weeks ago. In many ways the Irish government has been so absorbed by the austerity plan and worried about running a referendum in this climate that it put a bit too much hope in a solution being found without treaty change (and it has raised some valid points about the lack of implementation of all the summit agreements so far). However, there needs to be a better Eurozone system for the currency to work, and treaty change is inevitable if the Euro is to survive. It's a pity that the Irish government's sights are set so low (its main red line is preventing (corporate) tax harmonisation), rather than focusing on putting forward what it wants fiscal union to look like for the whole Eurozone. How we run the Eurozone will effect how we work in the future, and how much solidarity we will want to show with other Eurozone countries (for example, would Ireland be happy with lending money as part of a bail-out to another country [post-current-crisis], under the strict deficit rules being discussed?).

Do we want Eurobonds - and not just for Christmas? How much fiscal policy should be set by the Commission/European Parliament/Council? Lately there has been more discussion about the role the ECB should play, but it does seem as if our politicians will only discuss what "Merkozy" proposes instead of insisting on common ownership. It's not all Merkozy, of course. All Eurozone members will need to agree on the way forward, and the Franco-German proposals are the starting point. But we need to have a better sense of public ownership in the other Eurozone states. The rise of more extreme parties has been most marked in the smaller Member States: if the next treaty change is to solve the crisis it will have to go far enough to create a credible Eurozone and appear just and inclusive enough to be accepted across the Eurozone. It's too much of a gamble for Merkozy to appear to push too far ahead with their own project and then risk rejection in the smaller states which could derail the Euro entirely...