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Thursday 23 February 2012

Ireland and the Kubler-Ross Model of Grief

Irish Policeman Ronan McNamara and presiding electoral officer Hugh O'Donnell carry the ballot box from the ferry on Inishfree Island, off the Donegal coast of Ireland.

It will not surprise you that Myles na Gopaleen had it right: The majority of the members of the Irish parliament are professional politicians, in the sense that otherwise they would not be given jobs minding mice at the crossroads. Sadly Myles does not tell us if there would be comely maidens dancing at the crossroads too but there you go.

Today's Irish election is a queer thing indeed. Many observers have commented on a surprising lack of fury given the scale of the financial burden that must be borne these next ten or more years. Yet a contest in which Fianna Fail's vote is more than halved and Ireland's greatest political party reduced to a rabble of just a couple of dozen TDs can't be said to be an election dominated by apathy.

As I suggest at Foreign Policy, Ireland has been moving slowly through the Kubler-Ross stages of grief, mourning the death of the Celtic Tiger. Denial - this can't be happening! - turned to Anger, was followed by Bargaining with the IMF and European Union which in turn fuelled Depression and, at last, perhaps, some weary Acceptance that the ship of state is stuck on the rocks and in need of major structural repairs if it is ever to float again.

Even here, however, the electorate remains wary of entrusting any party with monopoly power. Labour, which had begun the campaign with optimistic calls for Eamon Gilmore, its leader, to be considered a credible candidate for Taoiseach is now reduced to pleading for the electorate to return a "balanced" government. That is, a Fine Gael-Labour coalition.

In policy terms this is beautifully ironic: blending the Labour and Fine Gael platforms might result in a government that actually looks suspiciously like a Fianna Fail administration. Fine Gael argue that their 73% of their deficit reduction program should be paid for by spending cuts and 27% in new taxes; Labour's proposal is for a 50-50 split between cuts and taxes. A coalition agreement may produce something close to Fianna Fail's preference for a 66-33% split.

Of course there are differences between Fianna Fail and Fine Gael  - the former warn that the latter are hellbent on privatisations more radical or ambitious than anything Margaret Thatcher achieved - but their similarities are greater than their differences. It is a question of emphasis and, sometimes, style. Nor, in any case, is this current Fine Gael quite the intellectual, cosmopolitan, wonkish crew gently steered by Garret Fitzgerald.

Reducing the deficit to 3% of GDP by 2014 (or 2016) is only the beginning of the new government's problems. Much worse is the obligations owed to the IMF and ECB. Fine Gael and Labour promise to "Renegotiate" the bailout deal but what if the Germans say No? Or, as seems quite likely, demand a heavy price in return for reducing the rate of interest payable (currently 5.8%). Will any new government be able to acrifice Ireland's low rate of corporation tax? Doing so would be both a capitulation and compromise prospects for future growth. Moreover, since sovereignty has become an ssue once again, concessions on this front will exacerbate the already heavy psychological impact of the bailout. Equally, since the numbers as currently projected are based on rapid growth and recovery they might be though heroically optimistic. And £100bn is a lot of money.

There are few prizes for winning this election. Which is one reason why Fine Gael should be glad to form a coalition with Labour. Better by far to share the load and the pain than endure the burden of an overall majority. The government will become mightily unpopular pretty quickly and, as David Cameron and George Osborne could tell Enda Kenny, blaming your predecessors and pointing out the mess you inherited is a time-limited excuse subject to the law of diminishing returns.

Nevertheless, Fianna Fail's defenstration is still quite something. This is the party, remember, that has been in power for almost 60 of the past 70 years. The two institutions that dominated and defined the history of the Irish state  - the Catholic Church and Fianna Fail - are both ruined now, discredited, ignored and often despised. Yet of the two Fianna Fail's prospects are probably the brighter. The party has never known bleakness like this but the nature of the task facing the new government is such that Fianna Fail are likely, at some point, to enjoy some kind of recovery.

That's for the future however. This weekend is a time for kicking Fianna Fail and then kicking them again just in case and just for fun. The party's habitual conflation of country and party, plus the fatal consequences of its clientalist style of special favours for special interests ensure that such a kicking is well-deserved. But the satisfaction to be had, pitiless as it may be, from this bout of electoral violence can only be fleeting. Then the real and difficult stuff begins and the new boys in charge are no more likely to have the answers than the men they are replacing.

Even so, Ireland is a land transformed. The Celtic Tiger was not a myth. It did exist. That Ireland's economic miracle ended in a spectacular property boom and bust does not change the fact that from 1987 to roughly 2002 Ireland enjoyed growth and stability that really did make the place a model and the envy of its peers and would-be competitors. Learning from - and paying for - the errors and excesses of more recent times should not be allowed to wipe away that record of achievement. It offers a guide to how Ireland may eventually recover from its present dreadful predicament.

GDP has shrunk by roughly 11% in the last three years and the shame of emigration - which may be said to be to Ireland what inflation is to Germany - is back on the agenda for a generation that had grown-up without thinking that a natural, permanent feature of Irish life but Ireland remains a better, much better, place than it was 25 ears ago. Bailout and all. Ensuring that remains the case is, of course, the tricky challenge facing Enda Kenny and his colleagues. They wanted the ball and now they damn well have it. The luck of the Irish - a bizarre concept anyway, given Irish history - may not be enough and in politics, as in so much else, sometimes the only thing worse than not getting what you want is getting it.

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