Something must be done but nobody wants to do it


ANALYSIS:THE DÁIL returns today for the Nama debate with TDs of all parties acutely aware that the next 100 days will dictate the shape of Irish politics for a long time to come, writes STEPHEN COLLINS

If the Fianna Fáil-Green Party Coalition can survive the Lisbon referendum, the Nama Bill and the budget, it is likely to remain in power for at least another year and possibly two. There is no knowing what will happen over that period to shape the landscape of the next election campaign.

However, if the Government falls at any one of the hurdles, a Fine Gael-Labour coalition will almost inevitably take office before the end of the year. Enda Kenny and Eamon Gilmore will then have to deal with the bitter reality for which they have done very little to prepare the electorate.

There is a guarded optimism across the political spectrum that the Irish people will ratify the Lisbon Treaty on October 2nd and that issue, at least, should soon be off the agenda. Nama is a different proposition.

It may be a bit clearer after today when Brian Lenihan announces the overall figure in Government bonds to be paid over to the banks but some uncertainty will remain about the changes still being sought by the Greens at the committee stage of the Bill next month.

Even if the Coalition gets over Nama and the review of the Programme for government, it will have to face the biggest hurdle of all in the budget. The very scale of that obstacle could well prove an incentive for the Greens to get out over Nama or the review before the budget if they are overwhelmed by the budget.

The sombre prospects ahead were emphasised by Taoiseach Brian Cowen at the start of the two-day Fianna Fáil parliamentary party meeting at Hodson Bay on the shores of Lough Ree, where he warned his TDs and Senators that he would not shirk the stark realities facing his Government in the days and weeks ahead.

Whether his backbenchers got the message is a moot point. While most of them spoke at some stage during the “think-in”, a number warned the Minister for Finance against making the kind of cuts in public spending that are likely to provoke strong public opposition.

Even those who accepted the need for deep cuts argued for a sensitive approach in the budget.

It seems that many backbenchers are an accurate reflection of the continuing public mood of denial about the kind of decisions that have to be made. In broad terms they accept the need for substantial cuts in public spending but they don’t want to accept any of the individual spending cuts recommended in the McCarthy report.

During his pep talk the Taoiseach said: “This country is borrowing almost €400 million a week. That cannot continue.” The message was fine but, going by accounts of the meeting, which was held behind closed doors, it seems many TDs didn’t quite get it. They still seem to think that public spending can be slashed in some painless fashion that won’t be noticed. A number of them spoke of the need for a political approach to the budget spending cuts as if pain can actually be avoided.

The mood of the meeting convinced some of the senior figures in the party that the implementation of the detailed recommendations in the McCarthy report will simply prove impossible to sell to the backbenches, never mind the public.

The alternative is to adopt a strategy focused on a few big cuts that will deliver the €3 billion in savings required by Brian Lenihan for next year rather than fight a line by line battle over the 1,000 cuts recommended by McCarthy.

“The only way to deal with this is to cut public sector pay across the board and probably do the same with welfare payments. There will be war, of course, but at least we will face a straightforward battle and not a whole range of debilitating skirmishes that will ultimately leave us weaker politically and probably not get the job done anyway,” said one Minister.

The indications are that the parliamentary party doesn’t really have the stomach for the big bang approach but then again it doesn’t want the incremental approach either.

“Cutting welfare is just out of the question,” said one TD.

“It goes to the heart of what this party is about and we won’t do it,” he added, but didn’t have any alternative to suggest.

That, in a nutshell, is the problem facing Fianna Fáil and facing the country. Everybody can agree that something drastic needs to be done but nobody wants to do it.

Many in Fianna Fáil would simply love to be in opposition and let Fine Gael and Labour deal with the mess but the only way that can happen is if there is an election. While that would inevitably be very bad for the party now, it could be far worse in a year or two.

Brian Cowen tried to rally his troops by telling them that the longer action to rectify the public finances was deferred, the longer would the recovery be delayed.

He is clearly hoping that if the budget obstacle can be surmounted, the early stages of the recovery will have begun to kick in by late next year and his Government will benefit from having been seen to have acted in the national interest.

The other side of the coin is that a deeply unpopular budget will simply further erode Fianna Fáil’s standing over the coming year and the election when it finally comes will see a meltdown of both Coalition parties.

The best-case scenario for the Opposition is that Fianna Fáil and the Greens do all the dirty work over the next year or two and then hand over a recovering economy to a Fine Gael-Labour coalition, but things might not pan out that easily for them.

One way or another, the next 100 days will be critical.

Stephen Collins is Political Editor of The Irish Times