Straying off course on finances main risk to Coalition

Sat, Oct 20, 2012, 01:00

INSIDE POLITICS: The danger facing the Coalition is not a row over any policy but the prospect it might fail to sort out the public finances

THE CONVENTIONAL political wisdom is that the current Fine Gael-Labour coalition will run its full term and the next general election will not take place until early 2016.

On the face of it that view makes sense. The Coalition has the biggest majority in the history of the State, and it can even afford to lose a few defectors along the way and still survive quite comfortably.

For all that, there have been some recent suggestions that everything is not as rosy as it seems in the Coalition ranks. There are also worrying precedents involving governments that supposedly had unassailable majorities.

The previous record majority was held by the Fianna Fáil-Labour coalition of 1992, which had a combined post-election total of 101 seats compared to the present Coalition’s total of 113 after last year’s general election.

Back in 1992 almost everybody in the political and media worlds believed not only that the Fianna Fáil-Labour coalition would run its full term but that it was in an unassailable position to win a second term and govern for the remainder of the 20th century.

In the event it came crashing down after just two years in office despite a rosy economic outlook and the breakthrough that led to the Belfast Agreement.

There is also the precedent of the Fianna Fáil-Fine Gael arrangement under the Tallaght Strategy, which had an even bigger majority of 132 seats for a period between 1987 and 1989. That also came to a bitter and premature end despite the fact that the economy was turning around.

Even the last Fianna Fáil-led government formed in 2007 started with a solid majority based on its coalition arrangement with the Greens, the remnants of the Progressive Democrats and a number of Independents.

As late as November 2010, one prominent member of the current Government confidently forecast that Brian Cowen would hang on in power until the last possible moment in the summer of this year, as it was the only course that made political sense.

Events changed everything, and the rest is history.

The events that undermined the last government arose directly from the state of the economy and the rapid deterioration in the public finances. Normal political logic had no answer to the financial crisis that precipitated the bailout by the EU-IMF-ECB troika.

After 18 months in office this Government has lost three Labour TDs who defied the party whip and are now campaigning inside the party for a change in policy direction.

Former junior minister Róisín Shortall even joined in a demonstration outside the gates of Leinster House against cuts in the home help service during the week.

On the Fine Gael side frustration at the continuing protection afforded to the public service under the terms of the Croke Park agreement while frontline services are being cut led eight of the party’s backbenchers to question the direction of policy.

The party hierarchy has over-reacted, coming down on them like a ton of bricks for relatively mild dissent, but it indicates a degree of nervousness in the Government about the forthcoming budget.

The real danger facing the current Coalition is not a row over any particular policy but the prospect that it might fail altogether in the drive to sort out the public finances. That would involve a fatal breach of promise with the electorate and the troika.

The Coalition, made up as it is by the two biggest parties in the Dáil, is the nearest thing the country has ever had to a national government. It still has a fair degree of public support, going on the results of the latest Irish Times/Ipsos MRBI poll, but that will evaporate if it fails in the job it has been elected to do.

Making the necessary savings to stay on the right road will inevitably impose severe strains on the relationship between the Coalition parties and between individual Ministers.

That could threaten the stability of Government but the risks involved in not staying on course to get the public finances in order are much greater both for the country and the long-term interests of both Coalition parties.

The Government has a number of things in its favour despite the continuing economic pressures. For a start Fine Gael and Labour have a history of working well together in coalition.

Crucially, Taoiseach Enda Kenny and Tánaiste Eamon Gilmore don’t merely have a good working relationship but clearly trust each other. The same is true of most other members of the Cabinet.

The second factor is that both parties are tied into the bailout deal with the troika. By contrast with the tensions that beset the Fine Gael-Labour coalition in the 1980s, there is an outside arbiter this time around that will insist on agreed targets being met.

Then there is the prospect of a deal on the bank debt. Despite the continuous on/off speculation and raucous scepticism of the Opposition some sort of deal will inevitably emerge arising from the European Council decision last June. The big question is the scale of the deal and its timing.

Finally, the ultimate prize of being the parties to lead the country out of the bailout by 2016 is something that should continue to bind the Coalition parties together, at least for as long as that appears to be an attainable objective.

If the absence of economic growth dictates otherwise then the strain of taking tough and unpopular decisions could become unbearable for the Coalition. For the moment the only choice is to press on and hope for the best.

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