23 Nov 2010

Combining political shambles with economic disaster

Utter shambles. That’s the news from Dublin.

To be able to combine economic collapse, with a seeming political collapse, takes a special sort of genius.

I arrived in Dublin expecting to report on Ireland’s gritted teeth acceptance of forced tough medicine. By lunchtime, all bets were off as the collapse of the governing coalition was pre-announced for eight weeks time, in the middle of delicate negotiations over a bailout for Ireland.

To this outsider, Ireland is a nation looking for someone to blame – for natural justice – and not just the protesters from Sinn Fein who broke through police lines into the courtyard of the Government Buildings.

Across Dublin at the GPO,  the historical beating heart of Irish self-determination, locals were beginning to sense that their fate was no longer entirely in this nation’s hands, but also in that of the EU, IMF and European Central Bank.

Dubliners there told me that the bailout was simultaneously “treason and a disgrace” and also “a relief now that someone – not our politicians – were in charge”. One passer-by even lamented the exit from sterling.

“People feel misled and betrayed”, is an understatement. But it is an utterly shocking statement from a member of the Cabinet that signed the application for a euro rescue on Sunday. He says his Green Party will stay in place to push through the Budget, and the troika negotiations.

John Gormley said: “We can no longer participate in government after we have completed those tasks, and I’ve outlined the tasks this morning: passing the budget, the four year plan and discussions with the EU. We do that in the national interest. After that we can longer participate in government.”

Irish leader Brian Cowen was only given a few minutes notice of this unexpected bombshell, but it reflects a growing backlash against him in Ireland for his role fuelling Ireland’s credit bubble, and the secretive bailout talks – he came under fire last night from veteran journalist Vincent Browne whilst announcing the rescue.

As Browne harangued him: “In regard to those questions you’ve evaded: you’re a liability, nobody believes you, you are the guy most responsible for the chaos…don’t you owe it to the Irish people to get out now…” – so rumours swirled Dublin that he was “going to the Park” to resign.

The Irish leader has met his ministers yesterday. In order for the IMF and EU rescue to pass, he will have to muster the votes for controversial Budget policies including a 10% cut to welfare, a one euro cut in the minimum wage, tens of thousands of job cuts, and perhaps a VAT rise. Difficult enough, even without a general election in eight weeks.

His defiance at the dramatic 7pm statement on the steps of his residence was impressive. He is counting on the opposition party abstaining, as there are enough independent MPs that are getting cold feet. Fianna Fail parliamentary party meet tomorrow to vote. Mr Cowen could lose his party leadership.

But this is all rather unpredictable. Whoever heard of an IMF structural adjustment policy being negotiated in the middle of an election campaign. Yes, it sounds very democratic. But it is fraught with peril.

And this is not just about Ireland, stock markets across Europe were down as fears spread beyond the Emerald Isle.
If you do get to this wonderful city, you will undoubtedly go to the GPO. There is a surprising sight: a shard of steel 130 metres high, that basically comes from nowhere.

In the birthplace of the Irish republic, this new monument, not to Ireland’s independence but seemingly the size of its financial mismanagement. And atop which you might find some of this country’s politicians if my conversations are representatives. And its everybody’s problem.