Champagne Charlie is in the hot seat. And the temperature is rising. The hedonistic-minded Minister for Finance who, a few short months ago, encouraged well-heeled elements of society to give it a lash and enjoy the good times, is now muttering about controlling drink prices.
Having ignored anti-inflationary advice from the European Central Bank, the ESRI and a raft of other agencies as irrelevant, Mr McCreevy is now reaping the whirlwind created by practising home-grown economics. And the "leftwing pinkos" he took such pleasure in lambasting are queueing up to get their digs in.
It's not a happy time. An annual inflation figure of 5.2 per cent would have been beyond the worst imaginings of "dismal science" practitioners in 1999, and the situation is certain to get worse. Even last week, Dublin's number-crunchers were talking about the inflation rate falling back to 4.7 per cent for the year to the end of May. Instead, the outcome was a full half percentage point higher. And oil and interest-rate rises have yet to feed into the June figures.
Having turned a £1 billion giveaway Budget into a negative political sum last December because of the ham-fisted way he reintroduced individualisation to the tax system, Mr McCreevy's judgment is suspect among his Fianna Fail colleagues.
The O'Flaherty appointment and his treatment of credit unions were straws in the wind. But, beyond that, his tendency to reward the better-off with the most generous tax concessions flew in the face of social partnership.
Blithe reassurances from the Minister for Finance that everything would be all right on the night and that this State operated outside normal economic models have vapourised. There are signs that the Coalition Government is beginning to panic. And Bertie Ahern has admitted to being seriously concerned.
Mr McCreevy predicted a 3.5 per cent rate of inflation for the year when he introduced his Budget last December. The inflationary aspects were heavily criticised. But in spite of those uncertainties, the Government and the social partners ratified a Programme for Prosperity and Fairness based on 5.5 per cent pay increases, plus income-tax cuts of about 3 per cent a year.
Within two months, however, the Minister for Finance had scaled up his inflation forecast to 4 per cent, and the numbers were rising. A figure of 4.5 per cent was talked about by the ESRI. And Peter Cassells of the Irish Congress of Trade Unions threatened to renegotiate the national pay agreement if inflation was not brought under control.
But the Minister for Finance was locked into the cab of his bullet train as it roared down the track. Inflation would eventually fall, he promised, even as drink and food prices surged and house prices climbed into the stratosphere. A weak euro and lack of competition fed into petrol prices. And then, last week, the European Central Bank bumped up interest rates by 0.5 per cent, which will eventually feed into housing costs.
The Government was all over the place. Increases in the price of beer and spirits had contributed 1.2 per cent to the 5.2 per cent inflation rate at a time when Government taxes remained static. Mr McCreevy huffed about tough action against the licensed trade.
Micheal Martin and John O'Donoghue spoke about imposing maximum price orders if publicans didn't mend their ways. But Bertie Ahern blew the facade away in the Dail.
The Taoiseach said maximum price orders would not work and some other mechanism would have to be found. There was a problem, he admitted, because he had been told publicans were enjoying profits in excess of 50 per cent on their bottom line. Perhaps greater competition and more licences were the way forward?
Pat Rabbitte and John Bruton went for him. Mr Rabbitte insisted the maximum price orders he had introduced on drink in 1996 did work. And he recalled the first act of this Government was to remove them on coming to office.
Mr Bruton argued that, if competition was required, Mr O'Donoghue had a Bill before the Dail that could be used to make more pub licences available. The Government was, as far as the Opposition parties were concerned, "pussyfooting around" without having any intention of taking on the powerful vested interests in the drink, motoring and construction businesses.
TOMORROW may tell a tale in that regard. The third report by Peter Bacon on the price of housing and accommodation will encourage the Government to choke off inflationary pressures in the system.
But, if inspired "leaks" are to be believed, the response will have all the symmetry of a drunken sailor's walk. On the one hand, stamp duty will be increased for second and subsequent house-buyers in order to limit speculative investment in the housing market. But stamp duties may be reduced for first-time buyers, a measure with inevitable inflationary effects.
It's all about limiting, rather than reversing, price rises. The terms of reference given to Mr Bacon for his first report made it clear the Government wanted to stabilise, rather than cause a fall in, house prices. And although, in the words of Mr Bacon, the housing market was "characterised by runaway inflation and widespread panic-buying of new houses", he did as he was asked.
The resulting Government action temporarily slowed prices before they again accelerated. Further action on the basis of a second report produced a situation where, last year, £5 billion of the £11 billion new house market was funded by speculative investment and not through mortgages.
It was unsustainable. Even Charlie McCreevy could see that. And while the Government might not care to inquire too closely about the source of that £5 billion, because of the DIRT scandal and rumours of a thriving black economy, something had to be done to curb inflation. The effectiveness of that action will impact directly on the reputation of the Minister for Finance.