Coalition needs to resist easy rush to populism

The latest bout of posturing by both Coalition partners over whether they should stick to the financial adjustment targets agreed with the troika for next year raises questions about whether the Irish political system has really learned anything from the crash.

The obsession of the Government parties with a banking inquiry, while they are simultaneously trying to wriggle out of budgetary disciplines or at the very least water them down, brings to mind Talleyrand’s remark about the Bourbons having forgotten nothing and learned nothing. In a challenging speech earlier this week former taoiseach John Bruton looked back to the days of the boom and pointed out that taking away the punch bowl while the party was still on would not have been easy politically, socially or administratively.

He suggested that the politicians on the banking inquiry should ask hard questions not only of the people in charge between 2000 and 2007 but of themselves too.

He asked: “As practical politicians who have to face the electorate, the members of the Oireachtas committee are well qualified to ask themselves how they would react if faced by a similar situation to that obtaining in the 2000 to 2007 period?”

The current attitude of Government and Opposition in the Dáil indicates they would make all of the same mistakes again without a second thought.

€

2 billion adjustment Look at the way the firm advice of the Fiscal Advisory Council (FAC) that the planned €

2 billion adjustment for next year should not be shirked has been blithely dismissed by the political class. The council was established to ensure the mistakes of the boom were not repeated but most politicians are happy to ignore what it has to say.

Minister for Finance Michael Noonan has publicly stated his belief that the €2 billion target might not be necessary but at least he is sticking to the commitment to cut the deficit to 3 per cent of gross domestic product whatever monetary figure is required when the growth projection for 2015 and other statistics become available.

Joan Burton, the hot favourite to take over as the new Labour Party leader, has adopted a similar position, but during the week she couldn’t resist describing those who favoured a €2 billion adjustment as “austerity hawks”. The use of this trite phrase plays straight into the hands of the Opposition and undermines Labour’s considerable achievement in Government.

By accepting the “anti-austerity” language of its opponents Labour devalues its record in office and can hardly expect the electorate to give it any credit.

If the prudent budgetary discipline of recent years can be dismissed as “austerity” then argument is handed away to the array of forces from left to right who claimed that the painful budgetary adjustment was unnecessary in the first place and instead urged the country to renege on its debt and damn the consequences.

The sad example of Argentina is a salutary lesson about what inevitably follows when such irresponsible policies are followed but that hasn’t deterred the “burn the bondholders” brigade from continuing to urge an end to “austerity” with all of the consequences that would follow from that.

There is certainly an argument at European level for easing the rigorous discipline that has marked the response of the European Union to the crisis. It would help this country if policies designed to encourage growth were adopted at EU level but in the meantime it is imperative for us to continue the process of getting our own debt under control in order to cement the prospects of recovery.

The FAC listed the practical reasons for a continuation of the policy and one of them was to protect the hard-won credibility of Ireland’s capacity to follow through on budgetary commitments.

Take the fight to the Opposition

That is vital if the country is to return to sustained growth. Of course it is far easier for economists to advocate prudent budgetary policies than it is for politicians who will have to face the electorate in less than two years to stick by them. However, at this stage in the political cycle the best hope both Coalition parties have of salvaging a decent result at the next election is to stand over what they have achieved and take the fight to the Opposition.

The Labour Party has played an honourable role in this Government, just as it did before in difficult times in the 1970s and 1980s, in doing what is right for the country while protecting the most vulnerable in society from the worst ravages of recession.

Labour’s problem is that it doesn’t seem to know whether it should be proud of its record in government or apologise for it. Unless the new leader can deal with that ambivalence the party is doomed to electoral disaster next time out.

Fine Gael should be in a better position to defend the Government’s record given that its larger support base had fewer illusions about what going into government would entail. However, the series of political blunders that marked the first six months after the bailout exit did a lot to undermine the party’s image as the results of the local and European elections demonstrated.

Fine Gael badly needs to regain the solid reputation Enda Kenny and Michael Noonan managed to win for it during the Coalition’s first three years in office. Its best hope in the next election will be to present itself as the party that can best manage the economy. A demonstration of competence rather than a rush to populism is the way to prove that to the electorate.