Can Kenny keep control?


Fine Gael’s national convention took place this weekend in less than ideal political circumstances. The party, chastened by its surprise defeat in a referendum to abolish the Seanad, is still struggling to agree the modified terms - savings of €2.5 billion rather than €3.1 billion set for next Tuesday’s budget - with its Labour partner in Government. For Taoiseach Enda Kenny, the party gathering in Limerick served as an opportunity to steady nerves; both of Fine Gael members after the referendum upset, and of an anxious public bracing itself for another onerous budget. However, much of the focus of attention and debate was on the State’s imminent exit from the bailout, which Mr Kenny hopes will occur on December 15, when Ireland will regain greater control over its economic future.

Mr Kenny should have gone to his party convention in a stronger position. The Government lost a referendum that it should have won, a defeat for which Mr Kenny as the prime mover of Seanad abolition, must take some of the blame. His refusal to participate in a TV debate was a failure of political leadership, while the Coalition parties lack lustre campaign failed to impress, and contributed to that defeat. Mr Kenny has promised to continue his reform of the political system, and to ensure that the Seanad is made as effective as possible. Rightly, he has now agreed to respect what successive governments for 34 years have failed to honour: the will of the people as expressed in a referendum - to give all third level graduates a vote in Seanad elections. The Government will introduce legislation to give effect in 2013 to what voters had decided in 1979.

Mr Kenny remains the most popular of the party leaders, which is a major achievement after two and half years very challenging years in office. He enjoys strong support from Fine Gael voters - four fifths of whom in the most recent poll approve his performance in government. But he also heads a divided party - with the dissenters on abortion legislation, establishing a Reform Alliance grouping - whose ultimate political intentions are unclear. Tensions and strains now evident within both Coalition parties will not make governing any easier in future; and certainly not after next year’s local and European elections, where both coalition parties face a likely electoral drubbing.

As Minister of Finance, Michael Noonan, noted, this week’s budget will be vital in positioning the Government to leave the bailout programme, and ensuring that it achieves a successful and durable exit. Certainly, the Government can take encouragement from growing signs of investor and consumer confidence. The past year has seen sharp drop in live register numbers, with increasing evidence of strong employment growth. Economic recovery has started. However, the pace of that recovery, which remains partly within our control, will largely be set by growth rates achieved by the world’s major developed economies.