First big obstacle for new Labour leader will be agreeing the 2015 budget

The ability of the Coalition to survive its full term until April 2016 has been thrown into doubt by the departure of Eamon Gilmore as Labour Party leader.

Whether Taoiseach Enda Kenny and the new Labour leader will be able to develop a bond of trust capable of surviving the political storms ahead is something that is giving TDs of both parties pause for thought.

Even the month-long process of electing the new leader has created a degree of instability. For one thing it has delayed a Cabinet reshuffle until next month when time is of the essence as the Coalition is already two-thirds of the way through its term.

More importantly, Joan Burton and Alex White have started to compete with each other in trying to convince Labour members that they are best equipped to stand up to Kenny and Fine Gael.

The danger is that they could easily talk themselves into an early confrontation with their Coalition partner that could precipitate an election far sooner than either party wants.

Irish political history demonstrates that the relationship between the leaders of parties in a coalition is the critical factor in its ability to survive.

The Fine Gael-Labour coalition of the 1970s was built on a strong bond between Liam Cosgrave and Brendan Corish. In the 1980s Garret FitzGerald and Dick Spring had to face many problems but a high level of mutual respect helped them to survive in very difficult circumstances. In the 1997 to 2007 period the good personal relationship between Bertie Ahern and Mary Harney enabled the Fianna Fáil-Progressive Democrat coalition to weather the inevitable political storms that developed in spite of the booming economy.

By contrast, the poor relations between Spring and Albert Reynolds between 1992 and 1994 brought the first and only Fianna Fáil-Labour coalition crashing down even though most of the ministers on both sides wanted it to continue.

The end of the Fianna Fáil-Green Party government in December 2010, a good 18 months before its term was up, also had a lot to do with the breakdown in trust between John Gormley and Brian Cowen as they struggled to cope with the extreme stress of the financial crisis.

Regardless of whether it is the hot favourite, Burton, or White who takes over the helm at Labour, the relationship between the two parties in Government will inevitably change.

While Kenny proved to be an effective consensus builder in coalition with Gilmore, he will have to contend with a new Labour leader facing the challenge of rescuing the party. That will create tensions. The smaller party in coalition always has difficulty maintaining its identity no matter what concessions it manages to extract from its larger partner. This is the case not just in Ireland – as the current plight of the Liberal Democrats in the UK demonstrates.

Conciliatory

It is a paradox that the more conciliatory the leader of the bigger party is the more difficult it can be for the smaller party.

Kenny went out of his way most of the time to minimise political difficulties for Gilmore, but in the end that only made matters worse for Labour. Having to deal with a political bully on the other side of a coalition can actually leave the junior coalition partner in a better position.

One of the few examples of a situation where a small party ended up gaining seats coming out of a coalition was the Progressive Democrats in 1992 and again in 2002. During the 1989 to 1992 period the PD leader, Des O’Malley, had to deal first with Charles Haughey and then Reynolds, and the coalition eventually foundered as a result of a confrontation with Reynolds. That gave the PDs a platform to fight the 1992 election.

In 2002 the situation was different. Harney and Ahern had a good relationship but the PDs fought the election on a strongly anti-Fianna Fáil ticket, with Michael McDowell raising a storm about the dangers of an overall majority for the bigger party. His belligerent attitude helped to prevent a Fianna Fáil majority and the outcome was another coalition between the two parties.

The challenge confronting the next Labour leader will be to find a middle way between fighting the Coalition partner too strongly and precipitating an early election and co-operating to ensure that the economic recovery continues.

The first big obstacle will be agreeing the 2015 budget, due to be announced in October. Both Labour candidates have made it clear they want an adjustment of less than the planned €2 billion, but whether that will be possible depends on a range of factors, like the growth rate, that are outside its control.

Hostages to fortune

The continuation in office of Michael Noonan in Finance and Brendan Howlin in Public Expenditure and Reform will be an important factor for stability but it might not be enough, particularly if the winner of the Labour contest has given too many hostages to fortune.

It is likely, though, that, whatever the tensions, the two parties will agree the final budget in the series agreed with the troika. Any other outcome could be politically disastrous for the Coalition parties, never mind the economic consequences for the country.

The budget for 2016 could be the one on which the Coalition founders. With luck, all the targets in the troika programme will have been met by that stage. That will present Labour with the temptation to come up with a wish-list of budgetary options designed to win back some of its lost voters and form the basis of a popular election platform.