The new Government and the Irish public may believe we are victims of a harsh EU-IMF regime but that is not the way it looks from London or Berlin, writes STEPHEN COLLINS
ENDA KENNY arrival in the Taoiseach’s office has hit the country like a breath of spring fresh air. From the way he walked to work in the mornings, with a smile on his face, to the courteous but decisive way he has handled himself in the Dáil, Kenny has lifted people’s spirits.
The economic morass remains, but the confident attitude of the new Taoiseach and the change of government have provided a ray of hope that, in time, there may even be a way out.
Kenny has also restored a little bit of national pride in his early international engagements.
He started off with a robust defence of Irish national interests at his first European Council meeting in Brussels, and followed it up with a joyous St Patrick’s Day celebration in the White House.
What has been so striking about the new Taoiseach in his first days in office is the absence of the sense of entitlement that pervaded the country’s political and official elite in recent years.
The very first decision of the new Government when it met in Arás an Uachtaráin on the evening of March 9th was to cut the pay of the Taoiseach and Ministers.
It followed that up a few days later by abolishing the entitlement of most Ministers to State cars and Garda drivers.
In terms of the national finances, these were small decisions but in symbolic terms they were huge.
What the last government failed to understand time and time again was the need to take the lead in cutting their overblown pay and entitlements and, equally important, being seen to do so.
In actual fact by the time Cowen and his Ministers lost office they had taken substantial pay cuts compared to the heights of the Bertie Ahern era. The problem was that they didn’t take such action at the beginning of the crisis and thereby forfeited the moral authority to inflict cuts on everybody else.
The way in which the former government appeared to exempt the judiciary from pay cuts and continued to tolerate the extraordinary pay and perks of semi-State bosses like the ESB chief who got €750,000 in 2009 or the chief executives of An Post and Coillte who got close to €500,000 in the same year, did further damage to its authority.
The mood of public anger that broke over the heads of Fianna Fáil candidates in the election had a lot to do with the tolerance it showed towards the privileges of some of those who are paid huge salaries from the public purse by contrast with the impact of public spending cuts on ordinary people.
Kenny and his colleagues had the good sense to move quickly on their own pay and perks but there is a question about whether they have gone far enough.
Although the Taoiseach’s salary has been cut from €285,583 two years ago to €200,000 now, Kenny will still be paid more than the British prime minister David Cameron, whose pay is £142,500 or €163,000 at yesterday’s exchange rate.
Considering the relative responsibilities of the two leaders and the financial state of the country, the disparity is hard to justify.
Given that the British exchequer is putting up some of the money for the EU-IMF bailout for Ireland, it is hard to believe that the Taoiseach is still being paid more than the prime minister.
That is the context in which Irish complaints about unfair treatment are being regarded with a high degree of scepticism in many other EU capitals. The new Government, and the Irish electorate, may believe that we are victims of a harsh EU-IMF regime but that is not the way it looks from London, Berlin or Helsinki.
For instance, consider a set of figures published this week by the Central Statistics Office (CSO) on pay rates in the Irish economy. According to the CSO, average weekly earnings in the Irish public sector are €912.84. This contrasts with average weekly earnings of €624.99 in the private sector, an astonishing gap in income.
In Britain the public service is also better paid than the private sector but the margin is not nearly so wide. Average earnings in the British public service were €634 a week on the last available set of figures by contrast to €912 in Ireland.
Considering that we are borrowing at 5.8 per cent to pay the Irish public service average salaries that are 40 per cent higher than those paid in Britain, is it any surprise that we are not getting a very sympathetic hearing from those lending us the money when we go looking for easier terms?
While he has started well, Kenny and his colleagues are still a long way off from sorting out the massive problems in public finances, never mind coming up with a coherent way of dealing with the banking collapse.
The Government does have a strong argument for taking the full cost of sorting out the banks off the shoulders of the Irish taxpayer but it has no excuses for not getting the public finances in order.
Getting the public service pay bill under control is the big task facing the Fine Gael-Labour Coalition. Its approach, following that of the last government, is to try to cut numbers to get the bill down but, in a society where jobs are scarce, surely there is a much better argument for getting pay down to keep the maximum number of people employed.
Kenny and his colleagues are certainly going to run into many difficulties in the weeks and months ahead but by making a good start they have given themselves the best possible chance of success.