Former German finance ministry official, Professor Christian Kastrop has given credence to what some Irish academics have been alleging for several years, that harsh austerity Ireland endured under the Troika, of the EU Commission, ECB and IMF was at the demand of Germany.
Professor Kastrop is a former aide to former German Finance Minister Wolfgang Schäuble, describes how a fix all approach was taken by the EU hegemon towards the peripheral countries such as Ireland, who were hit the hardest by the financial crisis of 2008.
After the banking crisis hit, Ireland was forced into socialising the private gambling loses of all bondholders for affected Irish banks, who had been allowed to engage in years of risky investments as the Irish and European Central Banks turned a blind eye.
In order to increase the competitiveness of the economy the troika then demanded extreme austerity measures in return for the infamous bailout. This was the only viable option for Ireland as the country surrendered the control of its currency to the ECB when joining the Euro, so could not engage in quantitive easing.
Also, EU rules on state intervention in the economy meant that while the Irish government was being forced to bail out the banks, it could not intervene in other aspects of the Irish economy which would have reduced the pain felt by the Irish citizenry.
This situation was allegedly the result the German government’s insistence, which as the EU hegemon, naturally has sway over the policy of bloc that was then enforced on the peripheral countries, such as Ireland, through austrerity it has been claimed by Irish and other European academics such as Costas Lapavitsas.
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