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.

Continued cutbacks

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.

The response of Fianna Fáil finance spokesman Michael McGrath to the deal on the promissory notes was an example of that approach. While he queried the terms, he gave it a qualified welcome, in contrast to the rest of the Opposition who denounced it in loud and intemperate tones.

However, there are signs that Fianna Fáil is beginning to shift into a more aggressive mode. Its attempt to make political capital out of the Magdalene laundries controversy and the property tax indicates a move to the opportunistic tactics that characterised it in the past, particularly under the leadership of Charles Haughey.

On the Magdalene laundries, the call for a blanket apology by the Taoiseach on behalf of the State is particularly cynical given that, while in government, Fianna Fáil specifically excluded the laundries from the scope of the redress board for fear of the financial implications for the State.

It is clear that the legal advice given to Enda Kenny is that an apology on behalf of the State will inevitably involve enormous cost to the taxpayer. Politically he has to find a way of apologising to the women and also of providing decent compensation to them without opening up the process to the enormous legal costs that would inevitably arise from a State apology.

On the property tax, Fianna Fáil also appears to be positioning itself to exploit the Coalition’s difficulties for all they are worth. Given that Fianna Fáil in government agreed with the troika on the necessity for a property tax, and included such a measure in its National Recovery Plan published in November 2010, its opposition now looks particularly opportunistic.

Fianna Fáil’s flaws

Fianna Fáil appears to have succumbed to the temptation to adopt an increasingly aggressive stance in the belief that it is the best way to represent the public mood and put it back on the road to power. The danger for the party is that cynicism of this order will remind the electorate of all that was bad about the party in its heyday.

As it ponders whether to compete with the rest of the Opposition in outrage and indignation or continue with a more balanced approach, the party might do well to ponder the results of the fiscal treaty referendum last year.

When presented with a stark choice about the country’s future, 60 per cent of people voted Yes to fiscal responsibility. Fianna Fáil played a courageous role in campaigning with the two Government parties in persuading a majority to take that decision.

Playing the populist card now, just as the country is within striking distance of economic recovery, could undermine the party’s hard won recovery in quick order.