Katherine Butler: The compelling plot behind Ireland's woes

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What cruel timing for Ireland that the bottom has even fallen out of the misery-lit market. There's sufficient material at hand for at least a few blockbusting epics worthy of the Frank McCourt genre; poverty, double-digit unemployment and the heartbreak of families being torn apart as mass emigration returns for real. But beyond the familiar pattern there is, this time, a stranger-than-fiction rags-to-riches-to-rags-again plot line. There are rich, scheming and still unpunished bankers, property tycoons and gullible middle classes who joined what turns out was a vast Ponzi scheme, buying apartments in absurd locations like Cape Verde or Islamabad. And there are, of course, those irrational faceless villains: "The Markets".

Being in Ireland in the week when the country's bank worries spun into an existential crisis for the eurozone was eye-opening. You can understand the frustration of the Irish government at the suggestion implicit in much international comment, that the country now resembles the set of Angela's Ashes. Superficially, despite having bond yields higher than North Korea, life goes on. Christmas lights were going up in Cork city. Some of the shops (particularly, I noticed, branches of British retail chains) were doing what looked like decent trade. And in the good restaurants of well-heeled south County Dublin on Sunday night, you were lucky to get a table. The housing market is dead, the banks are on life support and many ordinary people are facing personal ruin. But public borrowing was never Greek-style and not every aspect of Ireland's boom was an illusion.

Yet, a collective anxiety bordering on trauma is now palpable. Hourly news bulletins and debates on the national airwaves have had the mournful intensity of a wake. An acquaintance who works in a high-street bank admitted to me that he wonders as he arrives for work every morning if he'll find the doors of the branch locked shut.

So gripped by the details of the drama are ordinary Irish people that everyone suddenly knows what a bond is and economics professors are the new gods. Hundreds of people paid to attend a two-day economics festival in Kilkenny last week subjecting themselves to sessions with titles like: "How bad could it get?"

Mixed in with the worry is a claim being recycled in much of the Murdoch-owned Europe-hating press that as well as being on its knees, Ireland is the victim of a political betrayal by its European allies. Berlin and Paris are, this narrative holds, preparing to rob an independent nation of its sovereignty in a scramble to protect themselves and their grand folly, the euro. Ireland's reluctance to accept a bailout is linked to the "humiliation" and loss of sovereignty that would, it seems, accompany going cap in hand.

It would be naïve to think Berlin and Paris didn't have self-interested motives in trying to stop the contagion and prevent the break-up of the euro. But the supposed loss of Irish sovereignty is a red herring. True, before the launch of the euro, Ireland had an independent currency and thus nominally enjoyed the power to devalue or set interest rates. But in practice it had few policy choices other than to shadow the Bundesbank or react to the economic decisions of its biggest trading partner and former colonial power Britain. Membership of the eurozone at least gave it a full vote at the decision-making tables and some influence with its more powerful partners.

The current crisis is a test of the political solidarity that is supposed to underpin the European Union and at the hour of Ireland's greatest need, Angela Merkel has shown a disappointing parochialism. But the Irish people need to look closer to home for the real traitors. Their own leaders are the ones who egged on greedy bankers and builders to rape the economy and flog cheap loans as they defiled every available green space with gaudy McMansions, pointless gated communities in rural hamlets and tax-incentivised holiday villages the length of the once beautiful coastline, many of which now stand empty or half-built, ghostly indictments of a rancid political cuture.

And Ireland's politicians are the ones who recklessly committed the public purse to guaranteeing nearly £39bn in bank debt even as they moved to inflict the kind of cuts to health, education and public sector workers that make the British austerity plan look like a picnic. If conditions imposed from outside do anything to end the cronysim, clientelism and corruption that has prevailed in Ireland for generations then the sooner the better.

Near my home town is the village of Two Mile Borris (population, 500). As the latest instalment of the crisis played out in Brussels, Irish politicians were busy giving the green light to the construction in this tiny place of a Las Vegas style casino, a five star hotel designed as a full-scale replica of the White House complete with helipad and parking for 8,000 cars. It would be a sign that lessons are starting to be learned if somebody from Germany was allowed to shout stop even to this particular white elephant. I'm not holding my breath.

Now lock up the generals

Could it be that by releasing Aung San Suu Kyi the superstitious old army men who run the Burmese junta have played the West like a fiddle? The danger is that those EU governments with lucrative business interests to pursue in Burma will take The Lady's liberation and the sham elections as a cue to take the pressure off. Much wiser would be the course of action the Obama administration endorsed in August when it backed efforts to set up a UN commission of inquiry into human rights abuses. The threat of being hauled to The Hague, along with Sudan's President and indicted war criminal Omar al-Bashir, would concentrate minds in Rangoon more effectively than any futile "dialogue" with Suu Kyi's tormentors.

k.butler@independent.co.uk