Taoiseach faces uphill struggle in Alpine resort

Taoiseach Enda Kenny enters a eurosceptic lion’s den today when he lands in the Alpine retreat of Angela Merkel’s Bavarian allies.

Each January the Christian Social Union (CSU) gathers in Wildbad Kreuth, the party’s spiritual home, to sharpen their political knives and, occasionally, test them out on unpopular leaders.

It was here, a stone’s throw from the Austrian border, that the CSU declared its political independence from the Christian Democratic Union (CDU) in 1976. Though later watered down, the CSU has operated ever since as a strong-willed sister of the CDU – on domestic and European policy.

After breakfast tomorrow, Mr Kenny will outline Ireland’s EU presidency priorities, its EU/IMF programme progress and why a successful return to financial markets may require additional European assistance.

It’s a tricky task at the best of times in Germany; Mr Kenny has his work cut out for him with the CSU.

Bad cop

Since the start of the euro zone crisis, the Bavarian party has played the populist bad cop inside Angela Merkel’s coalition. Last July, for instance, a leading official suggested that Greece had “run out of road”, should “be made an example of” and ejected from the euro zone.

Such rhetoric is regularly, though not always, shot down in Berlin, where Dr Merkel knows it appeals to right-wing conservative voters frustrated with her strategy in the euro zone crisis.

The CSU has its own reasons for its rowdy rhetoric: this year it faces both general and state elections in Bavaria, where it ruled alone for over 50 years until a collapse in support in 2008 forced a Munich coalition.

Until now, CSU pot shots have not been directed at Ireland. But that could change after an article in this morning’s Der Spiegel magazine.

Headlined ‘Rescue for the Poster-Boy’, the piece is a first attempt in the German media to puncture Ireland’s permanently positive progress reports. Behind Ireland’s “gleaming” facade of economic stability and a perfect reform record, the magazine warns, is a “dismal reality” where debt continues to grow.

‘Conjurer’s trick’

Mr Kenny, Der Spiegel tells its readers, is a leader “hunting for a conjurer’s trick”: to secure a second bailout that does not look like one, but would “pass on to European taxpayers the expensive cost of rescuing ailing Irish banks”.

“Ireland’s demands are precise and, for Germans, potentially costly,” the magazine adds, explaining the promissory note arrangement.

“We want that the debt repayment is stretched and the interest rate reduced to a sensible rate,” said European affairs minister Lucinda Creighton to the magazine.

Difficult task

That Der Spiegel merges this campaign with separate Irish efforts for the ESM to take shares in rescued banks gives an indication of the difficult task ahead in explaining the need for some kind of technical agreement.

To win support, the Government has to explain Ireland’s take on the crisis – in particular the euro zone banking contagion Dublin says it averted by bailing out Irish banks.

This is very different to how Berlin has framed the crisis: as a periphery sovereign debt problem, where German participation in a solution was motivated by European solidarity more than self-interest.