A defining moment in Irish political history

FF-Green government gave an impression of incompetence in final days before the bailout

Then taoiseach Brian Cowen in 2010

Then taoiseach Brian Cowen in 2010

Fri, Dec 13, 2013, 01:00

The descent into the EU-IMF bailout three years ago was one of the defining moments in Irish political history. It was a catastrophic development for Fianna Fáil whose dominance of Irish politics for 80 years was fatally undermined by the arrival of outsiders to supervise the running of our affairs.

There is a strong argument for suggesting that traditional notions of sovereignty are no longer very relevant in the global economy, but the problem for Fianna Fáil was that its attraction for voters had always been based on a strong emotional appeal to nationalist sentiment.

It had traditionally portrayed itself not as an ordinary political party but as a national movement, so for it to have to hand over the responsibility for the big economic decisions to outside institutions was the ultimate admission of failure.

Financial crisis
In fact, much of the EU-IMF programme had actually been devised by officials in the Department of Finance in the autumn of 2010 as the government struggled to get to grips with the economic and financial crisis.

Ireland's Austerity Budgets

Politically, though, the image of foreign experts walking through the streets of Dublin to take up residence in the department’s headquarters in Merrion Street underlined the scale of the failure.

To make matters worse the way the government handled the final days leading up to the announcement of the bailout at the end of November 2010 gave an impression of complete confusion and incompetence.

The protests of then taoiseach Brian Cowen and some of his leading ministers that a bailout was not happening when it was already well in train was a fatal blow to whatever remaining credibility the Fianna Fáil-Green Party government possessed.

When the governor of the Central Bank took matters into his hands and effectively announced the bailout on radio the political damage was immense.

Before the bailout it was still the general expectation that a general election would not take place until the summer of 2012. The government had a secure majority and most people in the political world expected that it would cling to office until the last possible moment in the hope that its fortunes might improve.

Budgetary plan
“No one expected it [the bailout] to be a possibility until the following year because we had€20 billion in the bank and it’s not usual for countries who have €20 billion in cash to be forced into a facility, and we were just about to engage in a four-year budgetary plan which had been agreed by Brussels. So it wasn’t as if we were without a strategy,” Green Party minister Eamon Ryan told Mary Minihan of The Irish Times for her book A Deal with the Devil.

In the event, the scale of the banking crisis set the arguments about the State’s funding for the following six months at naught and the imminent arrival of the EU-IMF team forced the issue to crisis point. The Greens announced they were going to pull out of government once the key financial provisions of the budget due in December had been passed into law.

“We really felt: ‘This is it. The government has lost its mandate.’ A government that allows the IMF to come in on its watch can’t simply carry on without any consequences,” said Trevor Sargent of the Greens.

The government did manage to get the budget through the Dáil but in January things spiralled out of control. Fianna Fáil hopes that an election could be kicked down the road for a few months evaporated after a bizarre series of events.

Cowen responded to criticism of his leadership by putting down a motion of confidence in himself which he won but Micheál Martin came out against him and resigned from the cabinet.

A botched attempt at a reshuffle then led Cowen to stand down as party leader but he remained as taoiseach and dissolved the Dáil with an election on February 25th.

The result amounted to the biggest shift in Irish politics since the Irish Party was wiped out by Sinn Féin in 1918. Fianna Fáil lost 58 of the 78 seats it won in 2007, ending up with just 20 in the new Dáil.

By contrast, Fine Gael went up from 51 to 76, while Labour went from 20 to 37 and Sinn Féin rose from 4 to 14.

There were 19 Independents/Others, including five elected under the banner of the United Left Alliance.

The scale of the change was so great that it counts as one of the most volatile election results in Europe since 1945. However, a difference between the Irish election of 2011 and some of the dramatic elections in other countries like Italy and the Netherlands was that in those cases new parties changed the political landscape; here it was two old established parties, Fine Gael and Labour, that benefited from the governing party’s collapse.

Seats won
For Fine Gael it was the best result in the party’s history in terms of seats won. At one stage during the general election campaign it even seemed as if the party could win an overall majority but a last minute swing to Labour stymied that.

Labour’s performance was also the best in its history but there was a sense in the party of an opportunity lost. Opinion polls in 2010 had put Labour ahead of Fine Gael but in the event it won a little more than half the votes garnered by Enda Kenny and his party.

As expected Fine Gael and Labour came together to form a coalition and, despite their denunciation of the bailout terms during the election campaign, they had little option but to continue to implement it.

Fianna Fáil leader Micheál Martin has pointed to the irony of the fact that the parties who opposed the bailout terms are now claiming credit for its successful implementation.

One way or another, though, the impact of the bailout on Irish politics has been profound.

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