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Trichet-Lenihan letters show how bad a deal we got

"Do you feel lucky, punk?" Clint Eastwood speaks these famous words in Dirty Harry just as he is pointing his gun at a criminal's head and inviting him to guess whether or not it is loaded.

Now we know that European Central Bank president Jean-Claude Trichet treated Ireland much the same way back in 2010 - which left the late finance minister Brian Lenihan with little choice but to hand over our economic sovereignty.

The Trichet-Lenihan letters that have finally been released may not tell us anything that we did not already suspect. They will, however, add to the public's deep and widening sense of anger - because they confirm just how badly Europe's institutions bullied us into submission during our hour of need.

To set the scene, remember just how desperate Ireland's position was in the winter of 2010. Rumours were rife that a bailout was necessary, but government ministers were all over the airwaves claiming that such reports were total "fiction".

On November 19, Central Bank governor Patrick Honohan gave a sensational interview to RTE's Morning Ireland in which he declared that the game was up - which made Lenihan so furious that he briefly considered firing the man.

Two days later, Jean-Claude Trichet wrote a crucial letter that we can finally all read today. The Frenchman's language is cold and formal, but his meaning is crystal clear.

Effectively, he ordered Ireland to accept an EU/IMF rescue package - and threatened to cut off all emergency funding to our banks if we disobeyed.

Lenihan was dying of cancer. He did not want to go down in history as the man who allowed Ireland's ATMs to run dry, so he could not take the advice of an official who urged: "F**k them! Call their bluff!" By the end of the week, he was in Brussels to seal the deal - later admitting, "I fought the good fight, but hell was at the gates."

Enda Kenny has predictably used these letters to launch another attack on the last Fianna Fail government. This is fair enough up to a point, but the Taoiseach should tread warily. The record also shows that senior members of his coalition tried to play hardball with Jean-Claude Trichet and came away equally empty-handed.

During the 2011 general election campaign, Eamon Gilmore famously dismissed Trichet as a mere "civil servant" and claimed: "It's Labour's way or Frankfurt's way!" That statement is the number one reason why he sits on the backbenches today.

Shortly after the Fine Gael-Labour government was elected, Michael Noonan drew up plans to burn some senior bondholders - and was swiftly warned by Trichet that "a bomb would go off in Dublin" if he tried any such thing.


This is not just a history lesson. The Trichet-Lenihan letters have reminded us that in the global financial chess game, Ireland is just a pawn that can be easily sacrificed.

Of course, it would be interesting to hear the Frenchman's version of events - but he has made it clear that attending the Oireachtas banking inquiry is not part of his duties.

These letters should make us mad for one other simple reason. Trichet's threat was, after all, the moment, that gave birth to Irish Water.

Here is the final proof that when Jean-Claude did his Dirty Harry impression, Ireland ran completely out of luck.