“‘I told you so’ is not an economic policy,” said George Osborne on this morning’s Today when asked about the proposed Irish bailout.
George Osborne defended robustly the UK’s part in the bailout. “Ireland is a friend in need, and we’re here to help,” said the Tory chancellor, altruistically.
Altruism isn’t everything, though. The main reason behind Osborne support for the bailout is that the UK — and UK banks in particular — is massively exposed to the Irish economy. Osborne rolled out the terrifying statistic that Ireland accounts for more British trade than “Russia, Brazil, India and China put together.” In other words, we trade more with a small, wet, broke island to the West more than we do with the four major emerging economies that will dominate the century to come.
The other reason for Osborne’s new found support of bailouts is ideological. As the New Statesman pointed out last week, Osborne was extremely supportive of the economic policies that helped drive Ireland into the financial abyss.
Ireland, Osborne wrote in the Times (free), was a “shining example of the art of the possible in long-term economic policymaking, and that is why I am in Dublin: to listen and to learn.”
From the mid-90s Ireland turned itself into a borderline tax haven, reducing its corporation tax to mere 12.5 per cent and boomed on a combination of reckless lending and a housing bubble. Osborne did not look at the cause of the bubble, just its seemingly miraculous results, and so declared that we should “look and learn from across the Irish Sea” and that “Britain is being left behind.”
When Osborne declares that ” ‘I told you so’ is not an economic policy”, he’s not sticking up for Ireland – he’s sticking up for himself.