PIIGS to the Slaughter

National Review, December 2, 2010 (December 20, 2010 issue) 

Checking into a roach motel often seems like a straightforward decision.

Signing up for the euro, the shiny new currency supposedly saturated in German fiscal rectitude, not only pleased Ireland’s paymasters in Brussels (the country has benefited hugely from lavish dollops of EU “structural” assistance) but offered Dublin the prospect of riches far closer to hand than the end of the traditional rainbow. The combination of EU aid (amounting in some years to as much as 3 percent of GDP), domestic frugality, shrewd supply-side reforms, and (those were the days) a timely currency devaluation had already given birth to a Celtic Tiger nourished on export-led success. But that beast was now set to burn very bright indeed.

And so it did. Money poured in, bringing the traditional speculative excess in its wake. So far, so normal: Usually such festivities are brought to a more or less timely close by both external and internal pressure. Inflation heats up, the currency buckles, interest rates rise, fiscal policy is tightened, bank lending is reined in, and everyone is soon back on their best behavior — until the next time.

Joining the euro meant that much of this script was jettisoned. Market signals were muffled by membership in a unified monetary system in which one size truly did not fit all. In particular, Irish interest rates, determined primarily by the needs of the eurozone’s sluggish Franco-German core, were kept far too low (on average, they were negative in real terms between 1998 and 2007) for a roaring economy growing at an annual average rate of 6 percent between 1988 and 2007. Throw in a poorly regulated banking system, endemic cronyism, vast infusions of foreign cash (euro membership had dramatically reduced currency risk), a lending war led by the remarkably reckless Anglo Irish Bank, the genuine housing needs of a large new immigrant population (a striking phenomenon in this land once known for its emigrants), and briskly increasing wage rates, and the stage was set for a gigantic property boom. What could go wrong?

Just about everything; and it went so badly that (finally) doing the right thing may have made matters even worse. When the global financial crisis erupted and the Irish economy slumped (GDP fell by 7.1 percent in 2009 after a 2 percent decline the previous year), real-estate prices fell (they are now some 35 percent below their peak, and weaker still in Dublin), and the banks came down with them. The government’s response bore some resemblance to the approach taken so successfully by Sweden during a not-entirely-dissimilar banking crisis in the early 1990s. This included guaranteeing most of the liabilities of the country’s troubled banks (and troubled they were — by 2007, property-related lending accounted for some 60 percent of their loan books) and transferring toxic assets to NAMA, the National Asset Management Agency, a state-run “bad bank.”

But Ireland’s banking sector was far larger relative to its GDP than Sweden’s had been, and so was its real-estate bubble. The Irish government has also had to contend with a far less favorable economic climate, a difference made even more damaging by the fact that the Irish tax system is unusually sensitive to changes in economic activity. Tax revenues fell by almost 14 percent in 2008 and by 19 percent in 2009, bringing yet more misery to the republic’s previously respectable but swiftly deteriorating public finances.

Recovery from a mess like this is never plain sailing, but one way to lessen the pain is to arrange a currency devaluation (Sweden let the krona fall by 20 percent in late 1992) to give exporters a break. Unfortunately, membership in the eurozone had closed off that option. Ireland was thus stuck with an overpriced currency, an overpriced workforce, and a rapidly growing hard-money debt burden that could not be inflated away. All that was left was “internal devaluation.” That’s an ugly name for an ugly cure generally revolving around extraordinarily brutal public-sector austerity. The aim is to restore both the state’s finances and the nation’s international competitiveness, and it’s just what Ireland had been attempting since 2008 with a series of increasingly bleak budgets intended to reduce the deficit by over $19 billion.

Internal devaluation is a bitter pill to swallow even when it works, but when it doesn’t . . .

And in Ireland it may well not. As it has lurched its way through 2010, the government has fed ever more money into the country’s devastated banks (most notably the now-reviled Anglo Irish Bank), effectively canceling out the savings being generated by the austerity program and pushing the estimated 2010 public-sector deficit to some 32 percent of GDP (it would otherwise have been around 12 percent). This renewed the market’s worries about Ireland and, ominously, other fiscally fragile eurozone members. Exacerbating the rising tension, the European Central Bank appeared to be continuing with its effort to scale back the short-term support it had been extending to the eurozone’s financial institutions — support that was widely assumed to be vital to many banks in most or all of the notorious PIIGS (Portugal, Italy, Ireland, Greece, and Spain). Perceptions of sovereign and banking risk were converging, not unreasonably so given the way that governments were standing (either explicitly or implicitly) behind their countries’ banks. To take one example, when Fitch cut Ireland’s rating from AA- to A+ this fall, it specifically cited the mounting cost of the bank clean-up.

All this made October a terrible month for German chancellor Angela Merkel to demand that the European Stability Mechanism, which is scheduled to replace the current European Financial Stability Facility in 2013, include a provision requiring private holders of government debt to share in the pain of future sovereign bailouts. The provision is common sense. To call for it at a time of jagged nerves over European sovereign risk was not. Merkel’s comments related only to arrangements that might be put in place in the future, but given her frequent tirades against “speculators” and Germany’s key role in funding any bailouts to come, many in the financial markets worried that they might herald an attempt to change the ground rules well before 2013 — and not in a way that would be in the interests of bondholders. Yields on PIIGS bonds rose, while money continued to drift away from Ireland’s banks, and investors from its debt. Theoretically, the country still had enough money to meet its financing needs until mid-2011, but, if panic was to be headed off (at least temporarily), its government had to be persuaded to accept the bailout that it was desperately claiming not to need.

The risk posed by spreading financial contagion was simply too high, and not just for Ireland. The European Financial Stability Facility, which was created for the eurozone with such fanfare (there was talk of shock and awe) at the time of the Greek bailout, is not large enough to rescue Ireland and Portugal and Spain, the next two countries most likely to be hit should confidence fall any farther. Dublin caved. An outline rescue package was announced on November 21. The full details were released a week later. The total package will amount to $110 billion, including an immediate $13 billion injection of fresh capital into the banking system. In an unanticipated development, Ireland will chip in $23 billion from its pension reserve fund and various other pots of money. The balance is set to come from the International Monetary Fund, from the European Financial Stability Facility, and from three non-eurozone countries, the U.K., Sweden, and Denmark. The whole thing is conditional on the passing of yet another Irish austerity budget, one that contains an additional $20 billion in tax increases and spending cuts. These cuts, when added to the earlier bouts of slash-and-burn, amount to roughly 20 percent of GDP.

At the same time, more details were given of the planned new European Stability Mechanism, but — not insignificantly — with (some) dilution of Angela Merkel’s proposal for sharing the burden of future bailouts. It was also agreed that Greece should be given an extra four-and-a-half years to repay its emergency financing from earlier this year. Ireland, however, will no longer be obliged to contribute to Greece’s bailout. On a brighter note, and over the objections of some in the rescue party, Ireland was allowed to retain the 12.5 percent corporate tax rate that has served it so well.

The republic’s governing coalition, a dying partnership between the centrist Fianna Fail and the Greens, has to pass the new austerity budget within a few days with a parliamentary majority of only two and without much popular support. In a clear warning sign for the general election now set for January, Fianna Fail received a November 25 by-election shellacking from Sinn Fein, a party frequently described as the political wing of the IRA. The EU’s mandarins like to claim that their “ever closer” union is burying Europe’s old nationalisms. That’s not how it looked in Donegal South West that weekend.

Despite this, Ireland’s mainstream parties recognize that the deficit needs to be reduced soon — even if they disagree on the specifics of the rescue package. At the time of writing, things are very fluid, but the best guess is that the budget will probably squeak through, albeit with a great deal of shouting. If it doesn’t, there’s a clear risk that financial chaos will soon engulf some or all of the PIIGS, and, no less dangerously, the banks that have lent so much to them. Even if it does go through, don’t expect too much. The distinctly downbeat market reaction to both the initial announcement of an Irish bailout (yields on the PIIGS’ government debt rose; the euro fell) and its later confirmation reveals a widespread belief that this rescue is not the end of the story.

It’s not. More bailouts undoubtedly lie ahead, and, in the case of Greece and Ireland, so does a debt restructuring (that’s the polite word for default) at some moment when it is judged that the financial markets can cope with the news. So long as these countries are yoked to the euro, there is no feasible alternative. Their domestic demand will be crippled by the processes of internal devaluation. Their export sectors will be hobbled by a hard currency. Under the circumstances, they will struggle to grow their economies at a pace fast enough to reduce their debt burdens to manageable levels. There are good reasons the yield on their debt continues to rise.

Meanwhile, Brussels, apparently unshaken in its belief that one size can be made to fit all, will try to impose unified fiscal and budgetary rules across the eurozone. If this succeeds, it may reassure restless German voters that there are credible limits on the amount they will be asked to pay to support European monetary union. That the implementation of such zonal discipline will, if carried through, also deepen European integration is even more to the Eurocrats’ point. That it would doom a large swath of the continent to years of subpar growth is just too bad. The European project must move forward!

Splitting the single currency into a “northern” euro for Germany and those of its neighbors that want to come along and a “southern” euro for the rest is one more congenial, if risky, alternative route to take. It would retain important elements of the status quo while paving the way for the devaluations that the PIIGS so badly need. But to take this path would be an admission of defeat too humiliating for the EU’s leadership to accept, at least for now. And if that’s off the agenda, so, even more so, is a return by the nations of the eurozone to their old currencies.

The final alternative, for an Ireland or a Greece to exit the euro on its own, would involve national bankruptcy, the collapse of much of the domestic private sector, and Lehman Part Deux. 

It’s not always easy to check out of a roach motel.

Angela’s Ashes?

National Review Online,  June 16, 2008

LisbonNO1

If there were any last, few, pitiful remaining scraps of doubt about the depth of the disdain felt by the European Union’s leaders for the people of their wretched union, they ought, surely, to have been dispelled by the miserable saga of the Treaty of Lisbon, the sly, squalid, and cynical pact that has just been rejected by Irish voters, the only mass electorate given the chance to do so.

From its very beginnings, the Treaty of Lisbon was an exercise in deception, deliberately designed to deny the EU’s voters any more chances to slow down the construction of a European superstate that relatively few, outside an elite chasing power, privilege, and the chance to say “boo” to America, actually appear to want. Its origins can be found in the 2005 decision by some of those voters, the ones in France and Holland, to take the opportunity presented by two referenda to say non and nee respectively to the draft EU constitution that had been prepared so meticulously, so proudly, and so expensively on their behalf. Lesson learned: The voters were never again to be trusted. In future they would have to be bypassed.

Nevertheless, in a pantomime of responsiveness to that non and that nee, the constitution’s ratification process was suspended in the late spring of 2005. What ensued was officially described as a “period of reflection,” but was, for the most part, a period of frantic scheming. Its aim: To investigate how the draft constitution could be revived and, this time, be ratified. Sure enough, just about a year later German chancellor Angela Merkel announced that one of the objectives of her country’s upcoming EU presidency (the presidency currently rotates between different member states every six months) would be to “review” the constitution’s status. The message was clear: The people had spoken, and they were to be ignored. Chancellor Merkel was brought up in East Germany — and sometimes it shows.

Within two weeks of Germany assuming the presidency on January 1, 2007, Merkel declared the period of reflection to be over. She wanted, she said, a “road map” for the adoption of the constitution to be completed by the conclusion of the German presidency. And so it was, but with a clever twist. By the end of June, the EU’s governments had agreed to hold a conference to amend the union’s existing treaties in ways that mimicked much of the rejected constitution but without the bother of reintroducing the constitution itself, a bother that might run the risk of an extra referendum or two.

In essence, a number of largely cosmetic alterations were made (thus the proposed EU foreign minister was now re-dubbed a “High Representative”), and the new document generally avoided repeating those provisions of the old draft constitution already enshrined within EU law (why remind voters of what they had already given up?). Most of the changes were meaningless, flimflam designed to minimize the risk that ratification might be subject to the whims of a popular vote. Meanwhile, the “substance” of the rejected constitution had, boasted Merkel, been “preserved.” Indeed it had. The constitution was dead, long live the “Reform Treaty.” Six months and a few concessions later, the treaty was signed in Lisbon at a ceremony notable mainly for the absence of British prime minister Gordon Brown. He signed the paperwork a discreet few hours later.

For a while it looked as if Merkel’s coup would proceed without too much democratic interruption. This time around the French and Dutch governments were able to avoid consulting the electorates they supposedly represented. Holland’s Council of State, its government’s highest advisory body, helpfully decided that a referendum was not legally required. The Reform Treaty did not, apparently, contain sufficient “constitutional” elements, a ruling that undoubtedly pleased a large majority of Holland’s establishment politicians on both left and right: Off the hook! The lower house of parliament approved the Treaty of Lisbon earlier this month. The senate was expected to follow suit later in the year. In France, President Sarkozy made it quite clear that, whatever French voters might want (opinion polls suggested that a majority favored a referendum), he had no intention of consulting them. Last November he warned that a referendum “would bring Europe into danger. There [would] be no treaty if we had a referendum in France.” There was no referendum. Both national assembly and senate approved the treaty in February.

As for Britain, that perennial member of the EU’s awkward squad, departing Prime Minister Tony Blair was unable to resist giving one more kick to the country he had already done so much to trash. He announced that there would be no referendum, and so did his successor, Gordon Brown. Sure, a referendum had been promised in Labour’s 2005 manifesto, but only in the event of a revived constitution. The new treaty didn’t count. The argument was, typically for both men, absurd, dishonest, and insulting, something later highlighted by two parliamentary committees, not that it made any real difference.

In October 2007, the (cross-party) European Scrutiny Committee concluded that the Reform Treaty was “substantially equivalent” to the original constitution, a statement of the obvious – but one, under the circumstances, well worth making. Additionally, the committee had a few tart observations about the way that Merkel’s team had handled the crucial June negotiations. It highlighted their secrecy and timing: “texts [were] produced at the last moment before pressing for an agreement.” Meanwhile the compressed timetable then being arranged for the discussions in Portugal “could not have been better designed to marginalize” national parliaments. In January 2008, the Labour-dominated foreign-affairs committee concluded “that there is no material difference between the provisions on foreign affairs in the Constitutional Treaty, which the government made subject to approval in a referendum, and those in the Lisbon Treaty, on which a referendum is being denied.” Not to worry, soothed Britain’s glib young foreign minister, the Reform Treaty would “giv[e] Britain a bigger voice in Europe and enshrin[e] children’s rights for the first time.”

Ireland’s leading politicians behaved better. Under Irish law, significant changes to EU treaties require an amendment to the Irish constitution and all amendments to the Irish constitution have to be approved by referendum. No serious attempts were made to argue that the changes encompassed within the Treaty of Lisbon were too trivial to warrant a referendum. The “substance” of the rejected EU constitution had, admitted Prime Minister Bertie Ahern, survived. He added later that it was “a bit upsetting . . . to see so many countries running away from giving their people an opportunity [to vote]. . . . If you believe in something . . . why not let your people have a say in it?” That’s easy to answer. Those who now direct the EU project believe in it too much to accept placing the union’s future in the hands of its voters.

Mind you, when Ahern made those comments, he was probably confident that his electorate would approve the treaty. Despite a bout of recalcitrance a few years back (Irish voters had rejected an earlier EU treaty in 2001 before being bullied into changing their minds the following year), his countrymen were, and are, reasonably enthusiastic supporters of the EU. The EU has been good for – and to – Ireland, and the Irish know it. But gratitude is not a blank check and that, increasingly, is what the electorate came to believe that it was being asked to sign. In many respects, such as its notorious passerelle clauses (it’s a long story), that’s what the treaty is, but growing suspicions that the whole thing was nothing more than an elaborate con were also sharpened (sometimes unfairly) by the complexity of the treaty’s language.

Ironically, the treaty’s supporters had once regarded that complexity as an asset. As one of them, former Irish Prime Minister Garret FitzGerald, put it in June 2007:

The most striking change [between the failed EU constitution and the Reform Treaty] is perhaps that in order to enable some governments to reassure their electorates that the changes will have no constitutional implications, the idea of a new and simpler treaty containing all the provisions governing the Union has now been dropped in favor of a huge series of individual amendments to two existing treaties. Virtual incomprehensibility has . . . replaced simplicity as the key approach to EU reform.

At a meeting in, tactlessly, London the following month, another former premier, Italy’s Giuliano Amato reiterated the advantages of incomprehensibility: “If it is unreadable, it is not constitutional, that was the sort of perception. Where they got this perception from is a mystery to me. . . .  But, there is some truth [in it]. . . . the U.K. prime minister can go to the Commons and say “Look, you see, it’s absolutely unreadable, it’s the typical Brussels treaty, nothing new, no need for a referendum.” Amato may have been speaking fairly light-heartedly, but he was also quite right. Legislators everywhere are accustomed to approving laws they don’t understand. The man in the street is not. The opaque language of Merkel’s deceptively crafted treaty was a brilliant device to help those politicians looking to dodge a referendum, but a disaster for those who had no choice but to win one.

But last Thursday’s Irish “no” was a rejection of more than elaborately misleading drafting. As the EU’s bureaucracy has extended its reach deeper and deeper into territory once reserved to the nation state, it is bound to provoke opposition, even among many of those who broadly support European integration. Much of that opposition is reasonable, but much of it is not, and who is to blame for that? The EU’s political class has made a mockery of truth for so long that we should not be surprised that some Irish “no” voters preferred to believe (as, reportedly, some did) that the Treaty of Lisbon would pave the way for a pan-European draft.

The “no” coalition was wide, messy, crazy, sane, pragmatic, romantic, all-embracing, and self-contradictory, sometimes well-informed, sometimes not, sometimes paranoid, sometimes prescient, sometimes socialist, sometimes free market, sometimes high tax, sometimes low tax, sometimes honest, sometimes not, sometimes more than a little alarming (Sinn Fein was the only official party of any size to lend their support) and sometimes more than a little inspiring. Marvelously, miraculously, they won, and they won well, 53.4 percent to 46.6 percent (on a respectable turnout of 53.1 percent). If you think that sounds like democracy, you’d be right. And if you think that sounds like a nation, you’d be right too.

But if you think that it’s too soon to declare victory, you’d also be right. Early indications are that the ratification process will continue. As Jose Barroso, the EU’s chief bureaucrat, announced within minutes of the Irish result, “the treaty is not dead.”

And that tells you much of what you need to know about the EU.

Goodbye to All That

National Review Online, April 27, 2004

They banned Ulysses, the authorities did, they banned it as "obscene" in Britain, and they banned it as obscene in America, and they banned it as obscene just about anywhere else where English speakers could be shocked, offended, or otherwise appalled by James Joyce's strange, lovely mix of prose poetry, incomprehensibility, genius, and naughty talk. That was then. Nowadays, Leopold Bloom's Dublin odyssey is revered, a masterpiece, a monument, a part of our high culture, but its author would still be in trouble. Not for his book, but for his lunch. Times and taboos change, but killjoys and scolds do not.

Joyce used to eat in Davy Byrne's pub, a meal he later bequeathed to Bloom, a Gorgonzola sandwich, a glass of burgundy and a cigarette. The sandwich? No problem, so long as the cheese had been labeled as required by EU regulations. The Burgundy? Well, "glowing wine on his palate lingered swallowed. Crushing in the winepress grapes of Burgundy. Sun's heat it is." Who's going to argue with that? Not you, not me, not even Brussels. But that cigarette, oh dear, that cigarette.

Since late March, those addictive little sticks of dangerous delight been banned from Davy Byrne's, and every other pub in Ireland. They've been banned in restaurants, they've been banned in offices, they've been banned in factories and they've been banned just about anywhere else the Irish government considers a workplace, even banned, let Willy Loman howl, in company cars. There are exceptions, but most of them are not a lot of fun—prisons, nunneries, the Central Mental Hospital in Dundrum and, with grim, but kindly logic, hospices.

And Micheal Martin, the instigator of the ban? He's the typographically challenging busybody-in-chief, a bore, and a smug, self-righteous zealot. His one experience of a cigarette, as a foolish "teenager" naturally, was "disgusting." While he may have a drink now and then, he never, never gets "tipsy." Of course he doesn't. He's too busy planning his next crusade, pondering ways to restrict the advertising of alcohol. And when he's done thinking about that, this nanny, this ninny, this drone, this nosey, hectoring clown is "very tentatively" mulling a fat tax. Ireland's tragedy is that this monstrous figure has the job of his dreams—and everybody else's nightmares. By being appointed Ireland's Minister for Health and, wait for it, "Children," Martin was given a blank check for bossiness. On January 30, 2003, he cashed it.

On that dark day, Martin made a speech. Citing the findings of an "independent scientific working group," he announced that, "on the best of international scientific evidence...there is harm in Environmental Tobacco Smoke. Proven harm about which there is not only a consensus in the worldwide scientific community, but a significant substantial consensus." What's the difference between a "significant substantial" consensus and an ordinary consensus? Who knows? All we do know is that the Martin consensus evidently does not include all that awkward, inconvenient research showing that the health effect of passive smoking on adults is minimal, nonexistent, or statistically irrelevant. That data does not count.

And while we're talking data, let's chat about dosage. A substance can be perfectly safe, even good for you, in low quantities, but lethal in large amounts. Martin has no time for such quibbling. So far as this Einstein, this Galileo, this prince of precision, was concerned, all that we simpletons needed to be told was that in a smoky room, we'd be breathing in "a load of" dangerous chemicals that "do us enormous damage." This horrifying state of affairs had, Martin explained, led him to take "radical new measures.... I'm banning smoking in the workplace...I am publishing draft regulations.... I'm doing this because—as this report makes inescapably clear—I have no choice. There is no other option open to me...as you know, I've already taken a number of initiatives to reduce tobacco consumption...I've raised the age limit for buying tobacco.... I've stopped tobacco advertising in newspapers and magazines.... I believe that in every decade, we are presented with one major choice where...we change the future for the better.... I'm making the call the way it must be made."

"I", "I", "I", "I", "me", "I", "I", "I", "I", "I". Did I mention that our Mr. Martin is a tad self-important?

To be fair, there wasn't a lot of "we" about it. Martin may have had "no choice," but nor did members of the Irish parliament, let alone their electors. There was no vote approving the ban. The minister simply exercised the discretion given to him by an earlier piece of legislation. It's a well-known trick to anyone familiar with the way that the EU imposes its rules and in a way, that's only fitting. For while, behind the (forgive the phrase) smokescreen of healthcare concern, the real motives behind this move include Martin's ego and the uncontrollable urge of politicians to control their fellow citizens, one critical additional element has been the Irish establishment's determination to prove to the outside world how their country is modern, "European," Communautaire, international.

Turn again to that January 30 speech, with its reference to consensus in "the worldwide scientific community", the "best of international scientific evidence and to "the use of internationally recognized experts on tobacco control." A year later, Martin was boasting (not inaccurately) that his initiative had triggered "significant momentum across Europe." Foreigners impressed! That's what counted. The ban he had earlier described as "a massive cultural change" was (the Belfast News Letter reported) marking Ireland out as a "forward-thinking, modern society." "Ireland had," Martin said, "transformed itself in many ways over the last decade...Irish people have demonstrated their capacity to change and to adapt." Indeed they have, but as anyone familiar with the destruction of Georgian Dublin will know, unthinking modernization, or what passes for modernization, can come at a high price.

Writing in the London Independent late last year, a journalist recalled walking one rainy day into a pub in County Clare:

"A warm miasma...reached over and enfolded us in its arms. It was a heady mélange of smells—of burning turf and spilt beer, of mushroom soup and cigarette smoke and wet tweed slowly drying...The atmosphere was extraordinary—thick and savory and textured, like anchovy toast, like the barmbrack spread with butter that my aunt gave us every teatime. The embracing fog of fragrances was practically visible in the fumes that rose to the murky ceiling from every corner of the room. Fumes of sweet turf-smoke, fumes from our drying clothes, fumes of burning tobacco and exhaled smoke, all of it drifting lazily upward like a sacrifice to the household gods. We stuck around. What else could you do?"

History be hanged. In Micheal Martin's antiseptic, go-ahead Celtic tiger there can be no place for messy, awkward anachronisms such as the fug, the fellowship and the fumes of a country pub on a rainy day. The much-heralded choice, 'diversity' and openness of the New Ireland do not, it turns out, mean very much. If, as is always claimed, most drinkers prefer no-smoking pubs, then the market should be left to provide them with that choice. To argue that some supposed fundamental freedom to hang out in a smoke-free bar means that all pubs have to renounce tobacco is to make a mockery of liberty in a country where generations fought, and died, for the real thing.

You'd think that, in the land of craic, cussedness, conflict, and Cuchulain that there would have been more opposition, but while there was some grumbling, some debate, some jeering, only the splendid Deirdre Healy of John Player & Sons (the manufacturers of Eire's most popular cigarette) struck a note that, in its defiance and its poetry was, somehow, very, very Irish. The impact of the ban on her company's business would, said this warrior queen, be no more than "a slap in the face from a butterfly's wings."

Some butterfly, some wings. Prohibition has been introduced, on schedule and on the lines that Martin wanted. Worse still, like so much nanny state nagging, the new law seems to have been accepted, something that was even acknowledged by two visiting statesmen, two giants of our time, Gerrit Zalm, Holland's finance minister, and Jean-Claude Juncker, the premier of mighty Luxembourg. The two men were in Ireland for an EU summit and, in what was possibly the most supine diplomatic gesture seen in Europe since Neville Chamberlain boarded that plane to Munich, they smoked their cigarettes out in the cold.

But, in Ireland's worst moments a hero usually emerges to inspire, enchant, and Irish history being what it is, come to an unfortunate end. On March 30, John Deasy, a member of the Irish parliament, did just that. He committed an unthinkable act in one of the Dail's bars. He smoked not one cigarette, but three (some say two). The whole story remains, so to speak, cloudy, but it appears that Deasy first asked for a fire door to be opened so he could step outside into an alleyway. Request denied! It had not yet been designated a smoking area (it has now—too late for Deasy). Thwarted, the MP remained at the bar, enjoyed his three (or was it two?) cigarettes regardless, washed down, quite possibly, with three pints of beer (whether the barman served this outlaw, this smoker, is still under investigation). Retribution was inevitable. In Micheal Martin's Ireland, such open defiance could not be left unpunished.

And it wasn't. These days there's no smoking without a firing. Deasy was promptly removed as Fine Gael's justice spokesman. More was to come. On April 13 this wretch, this reprobate, this renegade, this rebel, was questioned for half an hour by officers from Dublin's feared South West Area Health Board. He runs the risk of prosecution and a fine of over $3,000. Yes, yes, yes, I know. As an MP, let alone a justice spokesman, Deasy should, of course, have complied with the law (which, disgracefully, he had done nothing before to oppose). But, when you read how this freedom fighter has refused to apologize and, better still, has told the media ("a bunch of hypocrites") to take "a running jump," it's impossible not to cheer.

James Joyce, I suspect, would have felt the same way.