Peter Hoskin

Sovereignty, and the loss of it

Sovereignty, and the loss of it
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The superb Slugger O'Toole blog highlights what is certainly the most resonant quote if the day: "When you borrow, you lose a little bit of your sovereignty, no matter who you borrow from." Those words were uttered by the Irish finance minister Brian Lenihan this morning, and they capture his country's grisly predicament perfectly. The Irish government has been fighting the European attempt to bail them out because they believe, quite understandably, that it would mean a final handover of control to Brussels and Berlin. But their loose economic policy – built on debt, and structured around a stubborn currency – has already seen them lose control to the point where the IMF is dispatching its observers to the scene. There is a very real sense that Ireland is dangling over the precipice this morning.

But if attempts to bail-out Ireland in some way represent a takeover, then it is not a happy one. As I wrote on Monday, Ireland's nightmare is fast devolving into a massive problem for Europe and its individual nations. Few will feel this fact quite so clearly as George Osborne, who this morning has been preparing us for British involvement in the rescue plan. As he put it, "Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system. So Britain stands ready to support Ireland in the steps that it needs to take to bring about that stability." But the idea of lending cash to a eurozone member – even with the promise that it will be paid back in time – is hardly going to sit well with a nation trudging through its own age of austerity.

If we do end up handing £6 billion – or more – over to Ireland, then at the very least our government needs to set out, in clear terms, why it has done so. Rhetoric about "national interest" is not sufficient – but a proper explanation of what we stand to gain and lose might just be. When Obama introduced his fiscal stimulus, he went out of his way to enumerate what the public would get for their money. Osborne must endeavour to do the same.