Dáil must pass budget despite political shambles

ANALYSIS:Greens' decision was a surprise for Coalition partners – that FF did not see it coming is further indication that they have lost touch

THERE HAS never been such a political shambles in the history of the State. The Coalition crumbling just days before the publication of a four-year budgetary strategy has added a whole new layer of uncertainty to an already volatile situation.

Taoiseach Brian Cowen tried to bring some stability into the confused situation last night by refusing to bow to calls for an immediate election. However, he did promise one early in the new year, as soon as the budget and the Finance Bill are ratified by the Dáil. He stressed repeatedly that it was imperative for the country that the budget was passed.

The big question, though, is how the budget will get through the House following the decision of the two Independents, Michael Lowry and Jackie Healy-Rae, to withdraw their support yesterday.

With Eamon Gilmore effectively ruling out any prospect of Labour allowing a budget containing a €6 billion adjustment to pass, the responsibility for ensuring that the national interest is served may well fall to Fine Gael.

A decision by the Dáil to reject the budget would do even further damage to Ireland’s tarnished international reputation, as it would display to the world the inability of the country’s politicians to deal with our enormous problems.

The decision by the Greens yesterday morning to publicly announce that the Coalition’s days were numbered came as a bolt from the blue to Cowen and Fianna Fáil. That they didn’t see it coming was yet another indication that the perennial party of power no longer understands what is going on.

Having come to their decision over the weekend that an early election was now the only option, Green Party leader John Gormley tried to contact Cowen yesterday morning to tell him about the imminent announcement.

Typically of the kind of thing that has happened to this Government, Gormley’s initial attempts to speak to Cowen were not successful as the Taoiseach was engaged in a long interview on his local radio station. It meant Cowen only got a few minutes’ notice about what his Coalition partners were about to do.

Unsurprisingly, the Taoiseach was furious and he immediately contemplated sacking the Green Ministers. Ministerial colleagues prevailed on him not to take that course of action, immediately at least, and to consider all the available options. He spoke to Gormley again in the afternoon and agreed to press ahead with the budget, despite the deep personal gulf between them.

While there was fury and anger in Fianna Fáil at the Greens, it was the junior Government party that read the public mood correctly and realised that an early election had become an absolute necessity.

There was a real danger that the utter lack of confidence in the Government could have turned into a dangerous level of public hostility if the Coalition continued to try and brazen it out.

The Greens may have been naive to believe that an orderly march to a general election in the second half of January was possible but their instinct was right. Someone had to pull the plug and if Cowen and his Fianna Fáil Ministers could not see the logic of an early election, the Greens had a responsibility to ensure that it happened.

Only time will tell whether the move will save the Greens from a complete wipe-out in the election, but they were heading for certain oblivion if they hung on until the bitter end.

The Progressive Democrats met their end because they lacked the courage to break with Fianna Fáil when it should have been obvious that that was their only option for survival.

The Greens’ announcement yesterday prompted a rush to the lifeboats. The two Independent TDs, Lowry and Healy-Rae, whose support was vital to get the budget through, announced that they could no longer be relied on.

Healy-Rae insisted that he had even sent a fax to the Government in the early hours of Monday morning, predating the Green decision.

Lowry cleverly put it up to all the major parties by suggesting that Fine Gael and Labour now had a responsibility to get the budget and the four-year plan through the Dáil to avoid further damage to Ireland’s international reputation. He also suggested that Cowen might adopt the alternative strategy of calling an immediate election before the budget.

If Cowen survives as Fianna Fáil leader and the budget is introduced to the Dáil on December 7th, Fine Gael and Labour will have serious decisions to make about the national interest as distinct from their own party interests.

While it is widely assumed even within Fine Gael and Labour that the two parties would form the next government, there is a serious divergence between them on budgetary strategy which may be difficult to gloss over. If Fine Gael decides that it has to allow the budget to pass in the national interest, that will throw their differences into sharp relief.

Put simply, Fine Gael is in agreement with the basic budget targets and strategy agreed between the Minister for Finance and the EU and IMF. An adjustment of €6 billion next year with the emphasis on spending cuts rather than tax increases is accepted by Fine Gael as a necessary first step in the direction of restoring the economy to good health.

By contrast, Labour does not accept either of these propositions. Party leader Eamon Gilmore yesterday repeated his opposition to a €6 billion adjustment next year, regardless of the European Commission’s support for it.

He said that the target was designed to impress the financial markets, but in the light of the fact that the country was no longer borrowing, that was no longer an imperative.

An election will pose a problem and an opportunity for both parties. A good, honest debate about the available policy options would also be a healthy development.

In contrast to the past few elections, a genuine debate about the pros and cons of tax increases versus spending cuts and a realistic appraisal of what has to be done might restore a little faith in the political system.

Hopefully, the presence of the EU-IMF team in Government Buildings will ensure that a sense of realism dominates this election campaign in contrast to the fantasy economics that ruled in 2007 and 2002.

Even if wide differences emerge between Fine Gael and Labour during a campaign that would not rule out a coalition in the aftermath of an election.

The relative strength of the two parties in a coalition will dictate the detailed shape of budgetary strategy over the next few years, but there is little or no room for manoeuvre on the broad targets.

What Fine Gael and Labour do agree on is that there should be an immediate general election. Both Enda Kenny and Eamon Gilmore made the point that they had been calling for such an election for the past few months.

“The move by the Green Party this morning was presumably intended to provide clarity in terms of the date for an election; what has actually happened is further uncertainty has been created,” said Kenny.

“What is needed now is an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan, complete negotiations with the EU and IMF and frame a budget for 2011,” he added.

Gilmore’s message was very much the same, although he suggested that a new government would be able to renegotiate the shape of the deal already struck with the EU-IMF team. If that ambition is real, it will cause even more problems.

What will happen to Cowen now is an open question. There is now open revolt in Fianna Fáil, but there is also the national imperative of getting the budget through. That is likely to prompt his enemies to hold their fire. Once the budget and the Finance Bill are passed, Cowen may well decide to call it a day and allow someone else to lead the party into a general election.