FacebookTwitterGoogle+RedditEmail

Irish Voters Will Grade Austerity

by

shutterstock_229270330

What looked like a smooth path to electoral victory for the Irish government has suddenly turned rocky, and the Fine Gael-Labour coalition is scrambling to keep its majority in the 166-seat Dail. A series of missteps by Fine Gael’s Taoiseach [prime minister] Enda Kenney, and a sharply critical report of the 2008 Irish “bailout,” has introduced an element of volatility into the Feb. 26 vote that may end in a victory by an interesting, if fragile, coalition of leftists and independents.

The center-right Fine Gael and center-left Labour Party currently hold 99 seats, but few observers see them maintaining their majority. Fine Gael has dropped from 30 percent several months ago to 26 percent today, and Labour is only polling at 9 percent. That will not translate into enough seats to control the Dail, and putting together a ruling coalition will be tricky, particularly when polls indicate that the independent bloc that has picked up 3 percent and is now the number one vote getter. In general, the independents are left or left-leaning.

The country is in the middle of an economic “boom,” but that is a relative term. Ireland is still reeling from years of European Central Bank (ECB) and International Monetary Fund (IMF) imposed austerity that doubled the rate of childhood poverty and saddled working people with onerous taxes, painful rate hikes and high unemployment. Wages have fallen 15 percent. Since 2008, almost 500,000 Irish—the majority of them young and educated—have emigrated from the country in search of jobs.

The government’s trouble began in December, when torrential rains swamped parts of the country and Kenny slow response to the disaster angered rural voters. Flood victims blamed the government for failing to invest in flood control, an infrastructure improvement that fell victim to the austerity regime.

Then the Fine Gael-Labour coalition was hit with a double whammy: a report by in-house auditors for the European Union and an Irish parliamentary study of the collapse of Irish banks from 2008 to 2010. The EU study found that the European Central Bank (ECB) had pressured the Irish government not to impose losses on “senior bondholders” and, instead, put the burden on taxpayers. According to the parliamentary study, the ECB threatened to withdraw emergency support for Irish banks—thus crashing the economy—if wealthy bondholders were forced to take losses. All of this came as news to most of the Irish.

The center-right Fianna Fail Party was in power when the great crash came in 2008, a crash that had nothing to do with government spending or debt, but was instead, the result of real estate speculation by banks and financial institutions. Irish land values jumped 800 percent, which should have warned the banks that a bubble was inflating. But the bondholders, speculators and banks did nothing because they were making enormous amounts of money. When the bubble popped, Irish taxpayers were forced to pick up the $67 billion tab.

Fianna Fail was crushed in the 2011 election, losing two-thirds of their deputies, and Fine Gael-Labour took over.

Part of the government’s problem is that for the past five years it has been saying that it had no choice but to enforce the savage austerity regime of the ECB, but it is now trying to take credit for the recent improvement of the economy.

The coalition’s mantra has been “stay the course”, good times are ahead. The term the government is using is “fiscal space,” or the estimated amount of money that will be available for investment if Ireland continued its economic recovery. According to Fine Gael that figure would be $12 billion between 2017 and 2021.

First, no one understood “fiscal space,” a term used by the IMF. Even Deputy Prime Minister Joan Burton, a Labour Party leader, called it “a new kind of ‘F’ word” and said voters hadn’t a clue what it meant. Asked to define it, Kenny said the Irish voters wouldn’t understand it, a statement that managed to insult everyone. The government subsequently knocked the figure down to $10 billion, and the opposition said it was more like $8 billion.

And while Fine Gael is taking credit for the economy, critics are pointing out that it wasn’t austerity, but a fall in world oil prices and a decline in the value of the euro that favors Ireland’s export industry, that got the economy going.

Finally Kenny muffed a question about whether Fine Gael might consider a coalition with Fianna Fail because the Labour Party was dropping in the polls and might not hold its 33 seats. This enraged Labour, and Kenny had to mend fences and pledge that Fine Gael would never go into a government with Fianna Fail.

In short, the government is looking inept, and it is taking fire for its shift from “we had no choice in applying the austerity” to “we take all the credit for the current situation.” Fintan O’Toole, the sharp-tongued columnist for the Irish Times and author of “Ship Of Fools,” chronicling the financial greed that led to the 2008 meltdown, wrote of the government, “If you had no power, you can claim no credit; if you did have power, you have to account for how unjustly you used it.”

Behind the cover of “It’s not our fault,” the government cut funds for caregivers, threw people off of National Health, cut support for the disabled, support for education, and did nothing about rising homelessness. As O’Toole points out, the improvements in the economy were because of oil prices, low interest rates and the falling euro, all “entirely outside the control of the Irish government.”

In any case, the country is still deeply in debt and, while the jobless rate is no longer 15 percent, it is still just below 10 percent.

The Dail is a motley affair, with a host of small parties and a bloc of independents. Currently Fine Gael has 66 seats and Labour 33. The center-right Fianna Fail (that inched up slightly in recent polls) has 21, and the leftist Sinn Fein has 14. The latter dropped three points in the poll from 20 percent to 17 percent. Other left parties include the Social Democrats, the Anti-Austerity Party, and there is a mix of mainly leftists in the independent bloc. The centrist Greens are showing some growth, as is the small rightist Renva Party.

Right now various stripes of the left hold 41 seats, a figure that is likely to go up in the coming elections. To control the Dail requires 80 seats, but if the independents do well, Sinn Fein holds its own, and Labour jumps ship, an anti-austerity coalition is possible.

In the end it may be a hung parliament, with no bloc of parties able to cobble together an effective government. Kenny may double cross Labour and join with Fianna Fail. But whoever takes over, the policies of austerity have been deeply discredited during this election and anyone who tries to “stay the course” is in for stormy weather.

Screen Shot 2016-02-19 at 10.18.51 AM

More articles by:

Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com 

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
June 23, 2017
Friday - Sunday
Jeffrey St. Clair
Democrats in the Dead Zone
Gary Leupp
Trump, Qatar and the Danger of Total Confusion
Andrew Levine
The “Democracies” We Deserve
Jeffrey St. Clair - Joshua Frank
The FBI’s “Operation Backfire” and the Case of Briana Waters
Joseph G. Ramsey
Savage Calculations: On the Exoneration of Philando Castille’s killer
John Wight
Trump’s Attack on Cuba
Brian Cloughley
Moving Closer to Doom
David Rosen
The Sex Offender: the 21st Century Witch
John Feffer
All Signs Point to Trump’s Coming War With Iran
Jennifer L. Lieberman
What’s Really New About the Gig Economy?
Pete Dolack
Analyzing the Failures of Syriza
Mike Whitney
Putin Tries to Avoid a Wider War With the US
Gregory Barrett
“Realpolitik” in Berlin: Merkel Fawns Over Kissinger
Louis Yako
The Road to Understanding Syria Goes Through Iraq
Graham Peebles
Grenfell Tower: A Disaster Waiting to Happen
Ezra Rosser
The Poverty State of Mind and the State’s Obligations to the Poor
Ron Jacobs
Andrew Jackson and the American Psyche
Pepe Escobar
Fear and Loathing on the Afghan Silk Road
Andre Vltchek
Why I Reject Western Courts and Justice
Lawrence Davidson
On Hidden Cultural Corruptors
REZA FIYOUZAT
Useless Idiots or Useful Collaborators?
Missy Comley Beattie
The Poor Need Not Apply
Joseph Natoli
What to Wonder Now
Thomas Knapp
The Castile Doctrine: Cops Without Consequences
Nyla Ali Khan
Borders Versus Memory
Binoy Kampmark
Death on the Road: Memory in Tim Winton’s Shrine
Sam Pizzigati
Companies Can Either Make Things or Make CEOs Rich
Tony McKenna
The Oily Politics of Unity: Owen Smith as Shadow Northern Ireland Secretary
Nizar Visram
If North Korea Didn’t Exist US Would Create It
Jill Richardson
Trump on Cuba: If Obama Did It, It’s Bad
Olivia Alperstein
Our President’s Word Wars
Clark T. Scott
Parallel in Significance
Richard Klin
Prog Rock: Pomp and Circumstance
Charles R. Larson
Review: Malin Persson Giolito’s “Quicksand”
June 22, 2017
Jason Hirthler
Invisible Empire Beneath the Radar, Above Suspicion
Ken Levy
Sorry, But It’s Entirely the Right’s Fault
John Laforge
Fukushima’s Radiation Will Poison Food “for Decades,” Study Finds
Ann Garrison
Jeremy Corbyn, the Labour Party, and the UK’s Socialist Surge
Phillip Doe
Big Oil in the Rocky Mountain State: the Overwhelming Tawdriness of Government in Colorado
Howard Lisnoff
The Spiritual Death of Ongoing War
Stephen Cooper
Civilized, Constitution-Loving Californians Will Continue Capital Punishment Fight
Bruno Rodríguez Parrilla
Cuba Will Not Bow to Trump’s Threats
Ramzy Baroud
Israel vs. the United Nations: The Nikki Haley Doctrine
Tyler Wilch
The Political Theology of US Drone Warfare
Colin Todhunter
A Grain of Truth: RCEP and the Corporate Hijack of Indian Agriculture
FacebookTwitterGoogle+RedditEmail