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  • irishtimes.com - Posted: September 16, 2008 @ 11:03 am

    No room at the inn with Fianna Fáil

    Deaglán de Bréadún

    Some months ago, shortly after he took office, Taoiseach Brian Cowen (politely) rebuked this reporter for portraying the country’s economic prospects in excessively stark terms. Ah come on, things are not that bad, was his message. He is singing a different tune today.

            Judging from Kathy Sheridan’s colour-piece in today’s Irish Times, the Fianna Fáil “think-in” at the Clayton Hotel in Galway was a fairly dismal experience for the news media. The 400-bed establishment was booked up for the 110 FF parliamentarians (party coffers must be in good shape) and the hapless meeja had to forage out their own lodgings elsewhere. This meant having to commute to the Clayton, where the reporters were not even allowed to attend the opening speech by the leader. Hopefully the Fine Gael deliberations in Limerick tomorrow and Thursday will be more relaxed (at least reporters are allowed stay in the same hotel.)

            The Taoiseach makes the point in his script that the No vote on the Lisbon Treaty had exacerbated our economic difficulties. This is probably true, in the sense that US investors seeking a platform to exploit the European market might be inclined to hesitate because of uncertainty about Ireland’s future in the EU.

            Then Cowen acknowledges that the economic situation is in fact stark and extremely serious: “No one yet knows what the full extent of these adverse developments will be or how quickly stability can be restored to the financial and equity markets worldwide . . . These are unprecedented times in that respect.”

             I hate to say, “I told you so!” Although the Taoiseach did not reveal any details of the October 13th Budget, he indicated that the Government’s basic approach will be (surprise, surprise) cutbacks and more cutbacks. As Cowen says, “We will not countenance expanding public expenditure at a rate which the economy cannot afford.”

             Given the world economic crisis, whatever party was in office would have to take a very prudent approach to public expenditure. No doubt Labour will be urging the Government to equalise the tax burden with measures aimed at those who seem to pay very little yet flaunt their wealth under the  public’s nose.

            Ireland ditched the outmoded policy of protectionism in favour of free trade back in 1958 and now we are one of the most globalised economies around. That worked to our benefit in the good times when the Celtic Tiger romped gaily across the world economic stage. But capitalism is a cyclical phenomenon and the thing to do in the good times was to put something aside for when the bad times returned. I listened to Bertie Ahern some months back asserting that, whatever storms lay ahead, Ireland was in a much better position to weather them than she was in the past. Like the Scotsman, I “ha’e ma doots”, but time will tell.

            Meanwhile, it looks as if a pay deal is going to be concluded in the social partnership talks. It will be a long night of the soul but they will get a result. Had the unions known the depth of the crisis, I wonder if they would have settled earlier?

    Deaglán de Bréadún, Political Correspondent, The Irish Times

    • Keith says:

      Capitalism may be cyclical, but you can use counter-cyclical economic policies to mitigate the worst effects (as Garret FitzGerald has been arguing for years in the Big Paper). FF took a different approach to cyclical budgeting, and aligned it with electoral cycles rather than counter-economic cycles.

    • Dan Sullivan says:

      Hmm … people gathering in Limerick. I might go to that.

    • corkman says:

      Why do you go so easy on Cowen? He was Minister for Finance when all the taxpayers’ money was being poured down drains. And now he is Taoiseach. He knew what was going to happen in a housing bubble situation. You can blame outside forces as much as you want. Well go on, ask him some hard questions!

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