Irony behind Ireland bailout

THE timing could not have been more ironic. On the 20th anniversary of Margaret Thatcher's downfall which was triggered, in part, by the Conservative's Party's schism over Europe, George Osborne was defending his decision to bail out Ireland's crisis-hit economy as the euro – the single currency so decried by the former Prime Minister – lurched from one crisis to another.

Mr Osborne's response – "I told you so is not much of an economic policy" – demonstrated a new-found maturity on his part since he became Chancellor. This is a politician who was left flat-footed by the global banking implosion which followed the run on Northern Rock three years ago.

Ireland's problems originate from its decision to forego the punt for the euro – the resulting credit that became available to the Emerald Isle fuelled an unsustainable boom. Yet, as the crisis escalated, the Eurosceptic Mr Osborne found himself in an inviduous position. If he propped up the Dublin government's finances, as he has done, he would be accused of neglecting Britain's domestic interests. If he did not act, however, he ran the risk of betraying a key trading ally in her hour of need – and further jeopardising this country's considerable financial stake in Ireland's banks.

In this regard, Mr Osborne had to act – a loan, even in these chastened times and with so much enmity still surrounding the banks, may be a small price to pay if it stabilises the euro and protects Britain's considerable exports across the Irish Sea. Indeed, both the UK and Irish economies are totally inter-dependent.

This is not the time for "Little Englander" politics. Yet this is, very much, the consequence of 20 years of debate on Europe, dating back to the end of the Thatcher era, in which the two extremes – the ardent Euro enthusiasts and the Eurosceptics – have been allowed to dominate for too long. This dialogue, which has become even more entrenched with the passing of time, has diverted attention away from the fact that Britain's fortunes are intrinsically linked to those of Europe.

Given Ireland's difficulties, Mr Osborne is, therefore, right to put the national interest first, even if it derives him no personal or political pleasure, while hoping that a more reasoned debate on Europe follows in time.