FF cynical shift to aggression could trip up party progress
INSIDE POLITICS:The scale of the Government’s achievement in replacing the onerous promissory notes with long-term bonds should have a hugely positive impact on the country’s long-term prospects, but the political consequences are more difficult to quantify.
A predictable chorus of negative voices, inside and outside the Dáil, has done its best to misrepresent the nature and the importance of the deal but its beneficial effects are already being reflected in lower borrowing costs for the country.
The deal is also a further reminder of the positive role the European Union and its institutions played in preventing this country from going over the brink in its darkest days. The bailout from our EU partners enabled the State to function and to continue paying public servants and welfare recipients when it was effectively priced out of the bond market. That should not be forgotten in the rush to exit the bailout.
If the Government manages to bring off the final leg of its bank debt strategy and get the European Stability Mechanism to take over the recapitalisation costs of the pillar banks, Ireland’s debt/gross domestic product ratio will come down close to the EU average. That would mark a real turnaround in the country’s fortunes.
The problem facing Coalition TDs is to explain to voters why the undeniable achievement of getting the national finances in order is so important when those same voters are going to be squeezed again in the next couple of budgets.
Going on the results of last week’s Ipsos MRBI/Irish Times opinion poll, Fine Gael TDs will have an easier task getting credit for the deal than their Labour counterparts. Fine Gael voters were far more attuned than Labour supporters to the importance of getting a deal on the promissory notes as well as to the necessity of the Government’s overall economic strategy.
However, TDs of both parties are finding it hard to convince voters of the need for continued cutbacks and tax increases despite the debt deal. When the property tax bills start dropping through people’s letter boxes in the second half of the year and charges for water are introduced a year later it is going to get even tougher.
As well as facing the unremitting barrage of criticism from Sinn Féin and the various Independents, the Government will also have to contend with an increasingly confident Fianna Fáil.
The Irish Times opinion poll showing Fianna Fáil back as the leading party for the first time in five years has come as a further morale-boost for a party that faced the real possibility of extinction after the election of 2011.
There was some irony in the fact that a party whose reputation had been so badly damaged by its handling of the banking crisis had its own recovery confirmed in the week that the deal on the promissory notes drew a line under one of its worst mistakes. The test now facing the party is how it defines its role. For the past two years it has moved gingerly, providing nuanced opposition in the Dáil rather than the full-blooded variety in evidence from the other parties and individuals on the same side of the House.