Ireland’s economy has shrunk by over 20 percent since the Celtic Tiger’s heyday. A February 25 election could see the country’s political map redrawn.
DUBLIN — Irish political punditry has long been something of an echo-chamber, so it was not much of a surprise when a tired default acronym got another airing over the past few weeks. “GUBU”, coined by the late Conor Cruise O’Brien, former UN diplomat, Irish government minister and editor of The Observer, stands for “Grotesque, Unbelievable, Bizarre and Unprecedented.”
There is nothing, however, unprecedented about its over-use, as the acronym is invariably fired out whenever something controversial or unusual takes place in Irish politics. Inevitably, GUBU is the shorthand of choice, irrespective of hyperbole or appropriateness.
The bizarre death-throes of the current government led by Brian Cowen and his party, Fianna Fáil, are as close to GUBU as Ireland has seen since the term first entered the political lexicon back in 1982 – when Ireland’s economy was spinning through another crisis.
Two weeks ago in Dublin’s Merrion Hotel, Prime Minister Brian Cowen said that he wanted to remain in his job despite ceding leadership of his party. This move came after a week in which he had staved off a leadership challenge from Foreign Minister Michéal Martin. Cowen’s attempted ministerial reshuffle – likely a diversion after revelations that he had held undeclared meetings with one of the executives at the center of Ireland’s banking collapse — enhanced the perception that Fianna Fáil was in cahoots with those most responsible for Ireland’s economic woes
Cowen has since been ousted by Martin, and as of 1 February, belatedly sought the dissolution of the current government. A parliamentary election will take place on 25 February – a vote that could see the redrawing of traditional party lines of Ireland’s politics.
Although Cowen’s Fianna Fáil has dominated Irish politics for most of the post-independence era, the severity and nature of Ireland’s economic crash has been pinned on the party, perceived to be too close to a cabal of bankers and property developers. The triumvirate is blamed for overheating Ireland’s economy with a Ponzi-esque property bubble, resulting in the former “Celtic Tiger’s” economy contracting by perhaps as much as 20 percent in the past two years.
Cowen will not even contest his parliamentary seat in the midlands constituency he has long-dominated, as his party faces obliteration at the polls
After Cowen’s resignation from the party leadership, Ireland’s Green Party announced on 23 January that it was withdrawing from government, but with the caveat that it would support an allegedly “crucial” finance bill. The measure runs to almost 300 pages and has been described as “unintelligible” to anybody bar taxation experts. However, all of Ireland’s main parties bar Sinn Féin, formed an alliance of convenience in parliament last week to ensure that the bill passed into law – a prerequisite for Ireland’s acceptance of an €85 billion bailout from the IMF and the EU.
The “bailout,” however, remains highly controversial, with the 5.8 percent interest rate on repayments seen as not just onerous, but beyond the country’s ability to repay.
Critics say that the money is intended to shore up the banks and investors, in Ireland and elsewhere, who gambled – and lost – on Ireland’s property bubble, and unfairly penalizes the taxpayer for mistakes made by others.
“Mesmerized” was how one backbench Fianna Fáil parliamentarian said he felt after Cowen’s attempted cabinet reshuffling, and the same seems to apply to the Irish in general given the tame response to two years of economic disaster.
But Ireland’s economic reversal has not yet prompted the sort of street protests seen in Greece last year, despite a litany of political gaffes and u-turns.
Not only has there been no Irish equivalent to the jailing of Bernie Madoff, the disgraced US financier, but on 21 January another senior bank executive, who was belatedly discarded after 2008, was handed a plum job as Secretary General of the Irish Red Cross.
Ireland’s almost 14 percent unemployment is a new record, when measured in absolute numbers. Ireland is also expected to cut €15 billion in public spending over the next three years after billions in cuts made already, to meet EU budget deficit requirements. The Economic and Social Research Institute in Dublin predicts that 2011 will see a record number of Irish emigrate, while research by consultancy Kavanagh-Fennell suggests that over 1500 firms went into liquidation in 2010. Indicative of the wider impact of the property collapse, the ESRI estimates that around 300,000 Irish homeowners are in “negative equity,” meaning their loan repayments exceed the value of their houses.
Fianna Fáil dipped to eight percent in an opinion poll published recently, and though Michéal Martin’s succession helped the party a bounce back to double figures, the new leader faces a massive challenge in the election campaign now underway.
With the dire economic and socioeconomic situation in mind, the party faces a historic and unprecedented wipeout in the forthcoming elections. It currently holds 71 seats out of 160 available, but could conceivably be reduced to less than 25, and coalition partner Green Party could be left with no representation at all in Ireland’s parliament.
While Fine Gael and Labour, the two main opposition parties, look like they will be the main beneficiaries, the political shifts looming could be more far-reaching than just a Fianna Fáil collapse. Some well-known economists have stated their intention to run in the election as well, amid speculation that a new technocratic center-right party, featuring well-known economists and journalists, could emerge to fill part of the void left by a vaporised Fianna Fáil.
But the left too could win big, with an outside chance that Sinn Féin and Labour could win enough support to govern, with the backing of left-leaning independents. That outcome would give Ireland its first-ever leftist administration.
But it is the largest opposition party, Fine Gael, typically Fianna Fáil’s main rival, which is the most likely beneficiary of the looming Fianna Fáil collapse. That said, the two parties are seen as similar in terms of policy, which could limit Fine Gael’s appeal come voting day.
Yesterday credit ratings agency Standard and Poor’s downgraded Ireland’s credit rating once more, after Fine Gael and Labour said they would renegotiate the bailout terms — an electioneering move made in response to Sinn Féin’s pledge to refuse the bailout outright. Fine Gael has mentioned a cap on income taxes, despite Ireland’s fiscal imbalances.
Fianna Fáil might well scent an opportunity to brand rival parties as naive and opportunistic, a chutzpah that would surely grate with voters given the cynical dismissal of those who warned that the economy was over-heating – with former PM Bertie Ahern famously counselling suicide for the few voices who predicted a crash.
But can the left capitalise? Sinn Féin took a strongly Marxist turn during the 1969-1998 “Troubles” in Northern Ireland, when it acted as the political wing of the Irish Republican Army (IRA). Spouting leftist economics seemingly stalled Sinn Féin’s rise in the Irish Republic after the 1998 peace agreement in Northern Ireland.
Now however Sinn Féin and others on the Irish left will have their best shot at overturning Ireland’s usually non-ideological voting patterns. Poster-boy Pearse Doherty is likely to lead the Sinn Féin campaign, despite the presence of party president and former IRA leader Gerry Adams, who will be making his first-ever attempt to win a seat in the Irish parliament in a constituency close to the border with Northern Ireland. (Adams is a MP for West Belfast in the British parliament, though he has refused to take his seat there)
The banking and property crises are potent weapons for ideologues seeking to discredit anything linked to free-market thinking. Even as exports increase six percent year-on-year, Ireland’s economy is otherwise in ruins.The country’s economy has shrank by 22 per cent since 2007 – a shocking number put forward in a study by the Irish Small and Medium Enterprises Association (ISME).
Simon Roughneen is an Irish journalist usually based in Southeast Asia. He was in Ireland during December and January.Show