The things the Taoiseach doesn’t talk about in public

Ballooning budget deficit lurks in background of every decision facing Government

Taoiseach Micheál Martin arriving at the Convention Centre to take Leaders’ Questions in the Dáil. Few incoming taoisigh have faced such a daunting in-tray. Photograph: Alan Betson

Taoiseach Micheál Martin arriving at the Convention Centre to take Leaders’ Questions in the Dáil. Few incoming taoisigh have faced such a daunting in-tray. Photograph: Alan Betson

 

Micheál Martin was early for his first outing at Leaders’ Questions on Tuesday afternoon. Whether it was eagerness to get stuck into his first parliamentary outing as Taoiseach, or that he wanted to demonstrate preparedness to friend and foe alike, or whether he just thought it took longer to get from the Taoiseach’s office to the Dáil chamber: there he was, several minutes early.

The session itself – the principal parliamentary platform for holding the Government to account by the Opposition – turned out to be humdrum enough; those expecting fireworks between Martin and the Sinn Féin leader Mary Lou McDonald, newly installed as leader of the Opposition, were disappointed.

There was a bit of skirmishing between the two later in the day on a Border poll, illustrating the gulf between Fianna Fáil and Sinn Féin on Northern Ireland policy, but it was all reserved enough. The two big beasts are circling each other for now.

For all that Sinn Féin and some of its allies dispute the political (if not the legal) legitimacy of Martin’s premiership – he has been “foisted” on the Irish people, TD Imelda Munster said last weekend – you could hardly say that Martin does not seem comfortable in the job.

First touted seriously as the next Taoiseach in the late 1990s, he has been preparing for this for more than two decades. All indications are that, despite his short tenure – under the coalition agreement he moves out of the office in December 2022 – he intends to seize the opportunity with both hands.

But few incoming taoisigh have faced such a daunting in-tray. The country remains half-shut by the pandemic; a million workers and tens of thousands of businesses are reliant on Government support. The economy is shrinking rapidly, while day-to-day borrowing inflates the national debt in the other direction.

The budget deficit – the difference between public income and expenditure – could tip €30 billion this year, in a country that costs about €70 billion a year to run. If the public believes (and it does) that the previous government handled the crisis well, that is in large part because it has thrown vast amounts of money at the problem.

Few dispute that was the right thing to do; but it clearly cannot go on forever – not least because the relatively benign environment on international bond markets, where the funds required to keep this country and many others going are borrowed, cannot be guaranteed to last forever.

Even if there is no sudden deterioration in the international environment – caused by, say, a resurgence of the virus in Europe, or an escalation of US-China trade tensions prompted by a desperate Donald Trump before November’s US presidential election – continuing to pile up debt is clearly not sustainable indefinitely. As one senior mandarin says, no country wants to find out exactly how much it can borrow.

No taoiseach or minister for finance tends to talk about this sort of stuff in public. But they are briefed about it – constantly. Because everything else depends on it. Nobody in government needs reminding what it is like to run out of money.

Restoring the economy while protecting the society it funds is the principal task facing the incoming Government. It will not be achieved by great feats of politics, or by government fiat, but by the slow accretion of policy actions that finds the balance between promoting a sustainable reopening of the economy, and keeping the virus suppressed in the community.

Many of those policy actions will be unpopular – tapering welfare payments, for instance. Others might be popular – pressing for the fullest possible reopening of schools, for example – but will be fiercely resisted by special interests. And everyone will plead a special case; they always do.

If there is a big second wave, the Government will face immediate accusations that it did not protect the country sufficiently. It will then have to take steps, either local or national, to contain it. That will not be as easy as the first, widely observed, shutdown in March and April.

The Greens and Fine Gael were throwing their eyes up to heaven a lot in the first fortnight, that’s for sure. But they kept it to themselves

But Martin’s new administration doesn’t just face external challenges; it will inevitably face internal difficulties too. That the coalition took so long to put together has perhaps dulled its novelty; but this unprecedented combination will be subject to triangular tensions that will test its coherence and purpose.

The Greens’ environmental agenda terrifies the rural parts of the Fine Gael and Fianna Fáil bases. The radical wing of the Greens will chafe at the compromises that are necessary in all coalitions.

Fianna Fáil and Fine Gael will not put away a century of suspicion in a few weeks. There will be a constant battle to take credit for the good things, and deflect the blame for the bad. The latter will outnumber the former for some time.

And that’s without mentioning the internal tensions in Fianna Fáil that overshadowed the Government’s first week. Or the party’s embarrassment over Barry Cowen’s misdemeanours, and the related fallout.

The Greens and Fine Gael were throwing their eyes up to heaven a lot in the first fortnight, that’s for sure. But they kept it to themselves. The administration will try to stick together, come what may, because having entered government, it is now in everyone’s interests to make it work. A messy collapse of the Government would likely mean all three parties paying a heavy price.

Whether they can stick together depends on their internal fortitude – but also on the external circumstances, over which they have no control. The ship of government has set sail with an untested crew, unreliable charts and uncertain seaworthiness. And the storm clouds are gathering already.

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