José Manuel Barroso: Ireland is entirely to blame for its own woes

Here's a spat between Joe Higgins – the most honest MEP in Ireland – and the President of the European Commission, José Manuel Durrão Barroso. Higgins makes an irrefutable point: that the bail-out money will go to European bankers and bondholders, while the repayment will come from ordinary Irish people.

Barroso responds with theatrical anger. The EU, he says, is stepping in to save Ireland from its own foolish mistakes in fiscal policy.

What? What? Ireland had one of the most impressive budget surpluses in the EU. It had done all the right things, using tax cuts to boost enterprise and growth, so that lower rates translated into higher revenue. When the crash came, Ireland tightened its fiscal policy more than any other European country. Everyone from the Taoiseach to benefits claimants took a cut.

No, it wasn't fiscal policy which brought Ireland to this predicament, but monetary policy. Membership of the euro imposed a disastrously pro-cyclical policy on the Republic during the boom years, giving it real interest rates of minus one per cent between 1998 and 2007. It is precisely because of the euro – that is, because Ireland could not benefit from the devaluation that every economic theory dictates in such circumstances – that the government was left with fiscal policy as its sole economic tool. Which is why it ought to terrify every Irish voter that the EU, under the terms of the bail out, will assume control of Ireland's fiscal policy as well as its monetary policy. Ireland has been reduced to vassalage; its taxpayers will be tithed for a generation to pay their dues to bankers and Eurocrats.

Watching Barroso, I found a phrase of Ken Tynan's forming in my mind: "He turned away, risibly moved". Still, I suppose the President is simply following the standard Eurocrat narrative: problems come from nation-states, solutions come from Brussels. This is, after all, the man who recently argued that national governments tend to get things wrong precisely because they are democratic.