Inside the Room review: Eamon Gilmore’s belaboured justification for taking power

‘The constant refrain that had Labour not being there, Fine Gael would have been up to no good must grate. The sense that the sun rose each morning thanks to Labour is hard to take’

Taoiseach Enda Kenny  with Labour leader Eamon Gilmore as  Tanaiste, during the first Cabinet meeting. Photograph: Maxwell’s/PA Wire

Taoiseach Enda Kenny with Labour leader Eamon Gilmore as Tanaiste, during the first Cabinet meeting. Photograph: Maxwell’s/PA Wire

Sat, Nov 14, 2015, 14:00

   
 

Book Title:
Inside the Room: The Untold Story of Ireland’s Crisis Government

ISBN-13:
978-1785370342

Author:
Eamon Gilmore

Publisher:
Merrion Press

Guideline Price:
€18.99

From the summer of 2007, when Northern Rock went bust, to the summer of 2014, when we started to get over the worst of our own banking and property crash, Eamon Gilmore was centre stage. In opposition the leader of the Labour Party was a leading critic of the Fianna Fáil-Green Party coalition’s economic actions. Once he became tánaiste he had to turn around and implement the measures that he had attacked.

Inside the Room attempts to overcome that contradiction by repeating the narrative that the current Government rode in, changed everything and saved the day. But that narrative was not credible enough to prevent his untimely “removal” from office. Gilmore says that he was “shot at dawn” by his own former finance spokeswoman, Joan Burton, who was by his side at every charge in opposition but seemed to undermine him once they took to the Government trenches.

That sense of betrayal could dominate the debate about this book, but it would miss a wider understanding of what happened in those historic years.

Inside the Room should be read alongside Beyond the Crash: Overcoming the First Crisis of Globalisation, by Gordon Brown, who played a key role, pulling the international community together to tackle the crisis in a co-ordinated way.

The common approach was set out by Timothy Geithner of the US treasury and Ben Bernake of the Federal Reserve. They saw how close the whole system came to collapse after the fall of Lehman Bros and were determined to learn lessons from the 1930s crash.

The recommended policy response was clear. Build up trust and confidence in your system, even if that sometimes means paying people who do not deserve to get paid. Go hard and fast to find out the real level of bank losses. But, whatever you do, don’t let another bank go down.

History will deliver different judgments about whether this policy approach was correct. Gilmore had every right to stand up in the Dáil in September 2008 and say that we should not guarantee the banks, even if his lieutenants Pat Rabbitte and Ruairí Quinn were clearly less certain. Gilmore could do so because he was in opposition and didn’t have to face the consequences of letting everything go.

Sinn Féin and Fine Gael had taken a different stance. So as the horrific bank losses became apparent and as Ireland’s ability to borrow worsened, a perfect opportunity opened up for Labour: if only the government had listened to it and not signed the bank guarantee, things wouldn’t have been so bad. The government had committed “treason” by protecting vested interests over the national interest. What was needed was “Labour’s way, not Frankfurt’s way”.

It was a powerful argument that became the new groupthink, except for one big problem: on this occasion there was no credible alternative Labour way.

Present to the inquiry

In all the evidence to the banking inquiry no convincing argument was made that Anglo Irish Bank could have been let go without the rest of the Irish banking system going down with it. Gilmore was never asked to present evidence, which is a pity. He didn’t have a chance to explain what Labour’s alternative approach would have been – and his book, unfortunately, also fails to do so.

On October 13th, 2010, the government of which I was a member opened the books and sought a cross-party consensus about how to put the public finances on a sustainable footing. Labour and Fine Gael looked at the figures but chose not to collaborate. A four-year plan was then agreed by cabinet and signed off on. This was before the troika ever came to town.

On November 9th Labour and Fine Gael were invited to meet Olli Rehn, the European economics commissioner, to discuss what was happening. They refused to turn up. The Green Party tried to set up a back channel with Labour at the same time, but we did not get a reply.

It was only at the last minute, before the government fell, that Labour signalled its intentions. A meeting was set up at the Department of Finance on January 24th, 2011. Here Joan Burton agreed to the economic strategy that was set out, and the next day Labour withdrew a confidence motion in the Dáil to let the Finance Bill go through.

The new Government would continue the policy of the old. The baton was being handed over rather than dropped and picked up again.

The problem for Labour is that this was never explained to the public.

The party then had to deal with Sinn Féin and a variety of other representatives who could accuse it of the very same act of “treason” of which it had accused others only months before.

Perhaps to convince themselves of their own narrative in what was a very difficult situation, they had to make sure that their administration would be seen as one of change rather than continuity. They were the “Crisis Government”, the ones solely responsible for our turnaround.

Inside the Room is a day-to-day account of how Eamon Gilmore went about that task. It documents the less dramatic everyday reality of politics: “sharing ideas, negotiating agreements, and solving problems for the sake of communities and country”.

As tánaiste Gilmore was good at that, as he showed in the relationship he built with the Taoiseach. But I wonder what Enda Kenny will make of this book. The constant refrain that, had Labour not been there, Fine Gael would have been up to no good must grate a little. The sense that the sun rose each morning thanks to the Labour Party is hard to take.

War cabinet approach

I have my own criticisms about Labour’s approach. I don’t believe it was right for the Economic Management Council to act as a “war cabinet”, of which unelected civil servants and advisers made up two-thirds of the membership. I have heard the internal arguments that it was a way of holding the Departments of Finance and Public Expenditure to account, but I think it has only further empowered that already strong arm of Government.

I also have real questions about the inclusion of trade policy in the Foreign Affairs brief. In this globalised world, economic success will follow those who separate out their value judgments from their own short- term commercial interests.

The Coalition managed the marriage-equality referendum in a way that gained us real credit. But some of that was lost again in how it first positioned our country on the refugee crisis. When it comes to climate change, the Government has given up on any pretence of caring, and that will cost us a lot in the end.

If Labour and Fine Gael had been more honest about their connection to the previous government, they would be given more credit for what has happened since. It was no small thing for Labour to change tack and decide to provide the stability that our country needed.

I am glad of the deal they got on the promissory note and the minimum wage, but it was never going to satisfy those who still think that there was some bigger, more magical solution. I am glad that they did not turn and run.

Eamon Gilmore did the State real service, and I am glad that the centre held. The question is, what have we learned from that time – and will it give us a better idea of where we go from here?

Eamon Ryan is leader of the Green Party and was minister for communications, energy and natural resources from 2007 to 2011