2010s >> 2011 >> no-1280-april-2011

Irish Election result: no change

This was an election about which set of politicians was to impose austerity. The Outs got the job.

There was a text doing the rounds in Ireland a few weeks ago which tried to capture the financial issue paralysing the country. ‘American tourist goes into a hotel in a small Irish town and, requesting to view the room, leaves €100 deposit with the manger. The hotel owner runs across the road to the butchers to pay off €100 account owed, the butcher immediately goes to the pub to clear €100 bar tab, the barman goes next door to the town prostitute to pay €100 he owes her from the night before, she goes to the hotel to pay the €100 she owed in room rentals. Just as she leaves, the American tourist comes back to the reception saying he doesn’t like the room and takes his €100 back. The tourist leaves town with everyone having cleared their debts’

The story illustrates nicely what socialists have always known; that the fiscal merry-go-round of capitalism is an illusion. However it is precisely that illusion that became the centre of the debate leading up the recent general election in Ireland as the electorate became fixated by the apparent choices put before them by the main parties as to who could better manage the necessary negotiations with the EU and the IMF on the countries €85bn debt and who was best able to fill the gapping €15bn deficit in the nation’s budget.

This was the first general election since the Celtic Tiger had taken its last roar, lost all its teeth, became mangy and thin and eventually lay down and died. An economy that had enjoyed an average of 8 percent growth during the boom was found to be built on sand. After 2002 growth had been driven disproportionately by a madly over-heated property and construction sector funded by banks who believed that valuations would go up forever.

Ireland was building 75000 residential units a year, for a population of fewer than 5 million when the UK was building fewer houses than that for a population 10 times the size. We had 5-star spa Hotels opening every other day and the main cities were a forest of construction cranes. Developers were the new aristocrats, living in ostentatious luxury supported not by the proceeds of their businesses but from more and more bank borrowings.  Fianna Fail (FF), the main party of government, were complicit with their ill-conceived property tax breaks, Europe’s lowest corporation tax and a virtual absence of financial regulation. When the global banking crisis hit, the Irish house of cards fell quicker and harder than most. For the coalition government of Fianna Fail and their minority Green Party partner, most of 2010 was spent lurching from crisis to crisis whilst sorting out a bail out the EU and the IMF.

The Soldiers’ Destiny

Brian Cowan, the Taoiseach saw his ruling Fianna Fail party routed. The Party which has been in power for longer than any other since the establishment of the state saw the writing on the wall. Cowan resigned as leader in the run-up to the election and in the days that followed, his Ministers and TDs (MPs) formed a long and disreputable queue to announce that they would not be seeking re-election. They did so in the sure and certain knowledge that they were facing humiliation in the polls and so took the chance to benefit from the soon-to-be-cut severance payments to outgoing TDs, although most claimed health reasons for their decision not to stand – proof if proof was needed that this had indeed been a sick government. Their lacklustre newly-elected leader Micheal Martin bore the expression of the condemned man. His natural political arrogance however enabled him to attempt to convince the electorate that, despite the fact that he had been a long standing minister in the outgoing government, really none of the mistakes were down to him, that he had a brave new plan and the experience to deliver it. Actions though belied his words. His Party didn’t even field enough candidates to form a majority administration – a first for an outgoing governing party.

All the opposition parties could smell blood. It was clear that the parties of government were going to get a hammering. The main opposition parties Fine Gael (FG), under the leadership of Enda Kenny and the Labour Party under Eammon Gilmore knew that this was their big opportunity for power and the smaller parties such as Sein Fein could see the chance of a land grab.

The election was extraordinary if the result merely predictable. Not extraordinary in the usual boring predictable way that a disreputable government gets routed by the opposition, in the way Blair’s New Labour did to the Tories or as was done in turn to Labour last year by the shiney posh boys of Conservative/Libdems. This was different in a number of respects.

Firstly, the outgoing Fianna Fail/Green government managed to get cross-party support for the passing of a Finance Bill in the last few days of government. The need for a quickly agreed Finance Bill was a condition of the EU/IMF bailout. That the main opposition parties were complicit in letting it get passed was a result of their desperation to grab power at any cost and knowing that any delay in the passing of the bill would only delay an election being called. In doing so they enabled a Bill which ranks amongst the most vicious attack on the poor in recent memory. The cavernous budget deficit was to be brought under control to meet conditions imposed by Europe. The principle was that the gap would be closed by budget cuts and tax increases to the proportion of 60:40. The 60 percent that is to come from budget cuts will see swinging cuts to social benefits, health services, education and every conceivable social and cultural subsidy. The tax elements overwhelming hit the poor including the cynically named universal social charge set at 7 percent.

So any perspective party of government, in their indecent haste to get into power, in effect committed themselves to the fiscal and budgetary policies of the outgoing government.

Another extraordinary feature of the run up to the election was the level of public anger and disillusionment at party politics and the lack of belief that any of the parties provided a plausible alternative. This became reflected in the unprecedented number of independents who stood. Indeed, there was a point in the early days of campaigning that it even appeared that there may have been a coalition of independents into a brave new political party. That was not to be but it was to prove the strongest ever showing for independents, winning almost 3 times as many seats than in the last general election.

New faces, same policy

The lack of faith by the electorate in a plausible opposition was evidenced by the respective leaders. The most positive thing that the collective media were able to say of FG leader Enda Kenny after each of the televised leadership debates was that he hadn’t messed up. Kenny, who is now Taoiseach, is a man untroubled by deep thought. He appeals, as does his party, to rural catholic Ireland, boasting recently that he ‘ate his dinner in the middle of the day’; a nod to his farming constituents. The Labour party Leader, Eammon Gilmore, in all his pompous self importance, was a man determined to lead his party into government at any cost; principle was a small price to pay. The Labour Party knew this was their big chance but they also calculated correctly that their only real hope of achieving that, was as a minority coalition partner to the right of centre FG party. Such a potential ethical dilemma troubled them little so, not only did they facilitate the passing of the pernicious Finance Bill but it was clear that they were having coalition negotiations with FG from the earliest days of the election.

A more principled Labour Party may have seen the obvious anger and desperation of a country which might have welcomed a more radical Labour alternative. It’s not like the peril of minority coalition wasn’t obvious to them. The minority Green partner in the outgoing coalition had in recent month become a national laughing stock and got their just deserts in the election in which they lost every single seat – obliterated! And Labour must also have looked across the water at the pathetic spectacle of the Liberal Democrats writing their political obituary for a term in office.

Labour’s lack of edge was truly stunning. Gilmore’s apparent outrage at the fiscal irresponsibility of the last government has been exposed as only skin deep. Labour’s election stance was different by imperceptible degrees. They made major principles out of the smallest detail such as the timeframe over which the deficit was to be managed, the proportionality of cuts versus tax increases or the extent of public sector reform. What they demonstrated was that their intent, just like FF and FG, was to run the system in the interest of the capitalist class. No proposal on a wealth tax or an immediate cessation of the tax breaks for the wealthy. Indeed it is remarkable that not one party, let alone Labour, proposed an increase in the disproportionately low Corporation Tax in Ireland. At 12.5 percent it is significantly below the rest of Europe (UK 21-28 percent) and is the principle driver of foreign direct investment into the country. Even a small increase in that tax would make a significant contribution to the deficit but all of the parties bought into the threats of the business community of a mass exodus of overseas investment. It is an empty threat and that all of the parties bought it exposes both their spineless self interest and basic economic ignorance. The idea that Google, Intel, HP et al would unwind €100’s million of investment and infrastructure to avoid a few percent of increase is an empty threat.

Neither has either the main opposition parties proposed any risk to the International Bond Holders who funded the Irish Banks in their drunken gorge fest. When the Irish government bailed out these criminally irresponsible banks, it made sure there was fair play in protecting not just the life savings of Mr and Mrs Murphy but also the bond investments of international capital. That commitment to these wealthy hedge funds and their like is to be protected in the next government paid for by the Irish people through savage cuts.

Themselves alone

The only sizable party which tried to articulate anything resembling an alternate voice was the reformed terrorists of Sinn Fein (SF). It was however a very feeble attempt at being radical as their illiteracy in even bourgeois economics was exposed. Their leader Gerry Adams, who gave up his UK parliamentary seat to stand in the republican heartland of Co Louth, showed just how much of a one issue politician he is, as he struggled with the basics of economics, social policy and even cultural life South of the border. His incredulous continued denial of having been a former member of the IRA did not trouble his hard-line supporters who voted him in. It has however fastened his reputation as a fraud.

Five “far left” TDs were elected under the umbrella of the United Left Alliance, an election pact between Irish sections of Militant and the SWP. It will be instructive to see whether or not they use their seats to act as a megaphone for socialism or simply to press for reforms (actually, we know the answer). The others are a complete rag bag ranging from right wing euro-sceptics to traditional rural conservatives who solely deliver ‘favours’ to their constituents in the expectation of being re-elected.

The result has been quite extraordinary as shown (see chart). The effect however will prove to be very much less extraordinary. FG and Labour spent 10 days in talks agreeing a coalition and programme for government. The media have welcomed this programme uncritically ignoring the fact that it reflects for the most part the conditions as imposed by the IMF and the terms of the Finance Bill, passed by the outgoing government.

What is a cast iron certainty is the Irish working class face many years of the most severe punishment for the unbridled free market sins of capitalism. What is also certain is that the new government will pay the price of taking on the job as whipping boy for the system.




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