Political posturing order of day as FG and FF position themselves for autumn election
Real surprise is how closely aligned Government has become with SF
Since Leo Varadkar took over as Taoiseach from Enda Kenny last May he has taken a more assertive nationalist line in public than his predecessor. And that line is clearly paying off with the public. Photograph: Alan Betson
Political posturing is now the order of the day as Fine Gael and Fianna Fáil manoeuvre for position in anticipation of an election before the end of this year when their confidence and supply arrangement runs out.
In a strange reversal of roles Fine Gael is now wearing the green jersey, playing hardball with the British and the unionists, and gaining short-term popularity as a result.
Meanwhile, Fianna Fáil, the party which refused to bow to populist demands at the height of the financial crisis and burn the bondholders, has adopted the rhetoric of its critics as the final act of the banking crisis unfolds.
It would be wise to take the stated position of both parties with a grain of salt as they are clearly lining up for the election contest which many TDs believe will take place in the autumn, either shortly before or after the budget.
Since Leo Varadkar took over as Taoiseach from Enda Kenny last May he has taken a more assertive nationalist line in public than his predecessor, both on the Brexit issue and on the interminable efforts to get the powersharing executive restored in Northern Ireland.
That line is clearly paying off with the public as successive opinion polls have demonstrated. Whether it has achieved much in practice is another thing entirely.
The commitment of the European Union and the British to avoid a return to a hard border depends on the UK remaining in the customs union or something that is no different from it in practice.
There is still no clarity about whether or not this will happen and it will ultimately depend on the dynamics of British politics. The only certainty is that if the British do sever ties with the customs union a hard border will return.
The future governance of Northern Ireland is also up in the air following the last minute collapse of the latest talks. Varadkar and British prime minister Theresa May were obviously convinced that a deal was on the point of being done. Otherwise they would not have travelled to Belfast last week.
The failure to reach a deal has left them with a dilemma. The British regard direct rule from Westminster or yet another election in the North as the way forward. The Democratic Unionist Party (DUP) on which May depends for power in Westminster favours direct rule at this stage.
However, the Irish Government and Sinn Féin want to trigger a British-Irish Intergovernmental Conference which will give Dublin the kind of input into the running of the North it had in the decade following the Anglo-Irish Agreement of 1985.
While the two governments and the parties all claim there is still hope for the talks, they will only succeed if there is a fundamental rethink by both Sinn Féin and the DUP and that appears highly unlikely. So stalemate looks set to last for the foreseeable future and the danger of the Government’s nationalist rhetoric is that it will simply fuel tribal passions.
There are some fundamental questions about whether the taxpayer should subsidise all of those in default, including borrowers who have made no attempt to repay their loans
The real surprise is how closely aligned the Fine Gael-led Government has become with Sinn Féin. That has led to growing speculation about the previously unthinkable – a coalition between those two parties after the next election.
Meanwhile, Fianna Fáil has taken to bashing the banks as a handy way of boosting its popularity. It has announced plans to publish legislation aimed at preventing the banks offloading non-performing mortgage loans.
Blame the banks
On the face of it this is a sure fire winner, with the public who naturally blame the banks for the financial crisis, even though the causes of the crash went much wider and included the Fianna Fáil government of the day.
The problem with Fianna Fáil’s latest tack is that the bank as the centre of the latest row, Permanent TSB, is 75 per cent owned by the taxpayer, while AIB is also still in majority State ownership.
The banks are being pressurised by the European Central Bank to do something about the continuing scale of their non-performing loans and if they don’t take action they will be penalised.
The PTSB has a particularly bad problem with 28 per cent of its loans classified as non-performing. According to the bank some of its borrowers have not engaged with it for seven years and on average loans are more than 3½ years in arrears.
There are some fundamental questions about whether the taxpayer should subsidise all of those in default, including borrowers who have made no attempt to repay their loans, but such questions do not fit the political narrative.
Fianna Fáil finance spokesman Michael McGrath is planning to move his legislation during his party’s private member’s time next week. Given the Dáil arithmetic, he will almost certainly get it passed at second stage for consideration by committee.
The Government is clearly aware of the bad publicity that would be generated from opposing the Bill and the Taoiseach only had honeyed words on the matter when it was raised with him by Micheál Martin on Tuesday.
The likely outcome is that the problem will be kicked into the long grass and the banks and their borrowers will be left in limbo as the parties court cheap popularity.