Ireland's difficulty is Enda's opportunity

Incoming Irish Taoiseach Enda Kenny might be forgiven a bit of hyperbole when he described the election result as a “democratic revolution”. It was nothing on the bloody scale of what has gone on in the Arab world. Yet Kenny wasn’t too far off the mark either. The scale of the weekend’s defeat of the ruling government is rare in western democracies and unheard of in Ireland where Fianna Fail has been a dominant national institution for 80 years. Everyone expected them to lose this election after the 10-year property bubble burst causing the collapse of Ireland’s banking system and national finances. But no one was game to predict how much the fury of the voters would turn defeat into annihilation. The word landslide barely does justice to what happened. (AP Photo of Enda Kenny by Peter Morrison)

In a time of major economic crisis in Ireland, incumbency stunk to high heaven. Thanks to cronyism and incompetence, Fianna Fail has dropped from 78 seats to a likely 21. Minor governing partners the Greens have been wiped off the map losing all six seats showing what happens when an environmental movement becomes just another political party. FF have plummeted from the biggest party in the land, to a precarious rural rump. They may not even be the official opposition, if the large batch of newly elected left-wing independents manage to cobble together some sort of coalition.

The disaster was most remarkable in Dublin where FF was almost completely wiped out. Outgoing Minister for Finance Brian Lenihan clung on to his seat but he was the only successful candidate as a dozen others fell. FG did well as expected but not as well as Labour and the independents; it was as the Irish Examiner said “a sharp turn to the left in the capital”.

My home town of Waterford was a microcosm of the sea change that infected Irish politics. Mostly working class Waterford would usually elect 2 FF, 1 FG and 1 Labour in a stable and predictable 4-seat constituency that covers the city and county. Seeing the way the wind was blowing, FF only put forward one candidate this time round, experienced TD Brendan Kenneally. Most people, myself included, expected Waterford to end up electing 2 FG, 1 FF and 1 Labour. But FF’s 2007 vote of 46.5 percent in 2007 collapsed to 13.9 percent in 2011. Left wing independent John Halligan (a popular former Mayor) polled 10.3 percent but overcame Kenneally on the 11th count with the help of preferences to join 2 FG and 1 Labour member. For the first time in the history of the party, FF does not have anyone in Dail Eireann from Waterford.

But if FF is receiving last rites, the result is not the death knell of Irish nationalist politics. Sinn Fein may win as many as 10 seats doubling their representation including the election of party leader Gerry Adams who topped the poll in Louth. Their successes were in the northern republican strongholds of Louth, Donegal and Cavan though they also advanced in working class areas of Dublin.

The new government is almost certainly going to be a coalition of Enda Kenny’s Fine Gael and Eamon Gilmore’s Labour Party. As J.G. Byrne put it on Twitter at the weekend, “saying bye-bye FF and hello FG bit like beating cancer only to be told you now have incurable syphilis”. Immense financial and economic issues await the incoming administration. The debt crisis is escalating out of control with the bailout of the Anglo Irish bank expected to cost €34 billion. The strings attached to the €84 billion IMF and EU bailout are severe with government spending to cut by a fifth by 2014 and taxes to rise substantially. FG and Labour have differing views how best this can be achieved though neither suggest defaulting on the debt.

Writer Ruth Dudley Edwards is pessimistic the new coalition will be much better at managing the budget than the regime it replaced. Fine Gael, she said, was no more ideological than Fianna Fail, and is similarly awash with teachers and lawyers with almost no experience of government. Labour, she said, was led and dominated by the trade unions resisting change or cuts in the bloated, secretive and inefficient public services. “It is doubtful if a look at the books will turn its leader into Nick Clegg,” she wrote for her British audience.

A likely trajectory of this government is four years of hardship, bending over to receive its punishment as bankers in Brussels and Frankfurt spank Ireland for its profligacy in the good years. Perhaps the change will act as a placebo and install a badly needed sense of confidence. If that doesn’t work, the electorate will turn on Fine Gael with the same savagery it meted out to Fianna Fail. If the nationalist or socialist parties (or perhaps a nationalist socialist party) ever get hold of the levers of power then there really will be a democratic revolution.

Soldiers without destiny: Fianna Fail set for Irish election massacre

Age old certainties in Irish politics are about to end on Friday week. Fianna Fail has been the dominant force and the largest party in Dáil Éireann at every general election since 1932. They have have ruled the country for all but 19 of the past 79 years. The party’s leaders and members have become wedded to power and have developed a born to rule mentality over the years. With the aid of coalitions, Fianna Fail has formed government for last 14 years. But all that is about to change on 25 February. Irish voters are angry and are about to deliver a shellacking to the soldiers of destiny. (photo by infomatique)

Junior coalition partners the Greens can also expect to be punished as incumbent parties take the blame for the fall of the Celtic Tiger economy over the last three years. The question is only whether the main opposition Fine Gael will win outright or more likely form a coalition with the Labour Party. The two parties joined together when the voters booted Fianna Fail out of office in 1973, 1981 and 1982. But in none of those elections was Fianna Fail hammered in a way expected on Friday week.

If the latest opinion polls are any guide, Fianna Fail with 17 percent of the vote could end up winning with as few as 25 seats in the 166 seat parliament (26 with the sitting ceann comhairle (speaker) Seamus Kirk who is automatically reelected). Fine Gael on the other hand with twice as much support are favoured to take around 71 seats but could win as many as 80 putting them within striking distance of an unprecedented outright victory.

More realistically they will rely on Eamon Gilmore’s Labour to form a new Government. Some polls have shown Labour as the most popular party and Gilmore’s own profile has occasionally made him the most popular politician in the country. It is almost impossible for them to shrug off their mantle as junior coalition partners and it is difficult to see them becoming the largest party. But they will break another record, as they take more seats than Fianna Fail for the first time since de Valera first took FF to the ballot box in the 1920s.

The parallels with the 1973 election are most stark. By that time Fianna Fail had been in power for 16 years. Under the leadership of economic guru Dr T.K. Whitaker, Ireland had risen out of post war penury during the sixties as standards of living and education rose. Innovative marketing launched the country as a world tourist destination and attractive taxation measures brought foreign capital to Irish shores. But with entry into the EEC, the collapse of the Bretton-Woods agreement and the looming oil crisis, old Irish certainties were changing. Despite (or perhaps because of) the IRA Arms Crisis, Fianna Fail actually increased their vote in that election but lost power 73 seats to 68. Four years of Coalition austerity packages later, the voters forgave Fianna Fail and they won a landslide victory in 1977.

Since Fianna Fail last regained power in 1997, they have also presided over many boom years, perhaps the best yet. Successive tribunals found large-scale corruption was endemic, but voters didn’t punish this behaviour because they were doing well. Personal wealth exploded over the life of the Celtic Tiger, at its peak five years before and after the millennium. But risk taking also increased exponentially. Debts rose to match growing exports. By July 2008, the Irish Independent calculated the average household was borrowing €158 for every €100 earned. In the good times, which were just ending as that article was written, that didn’t matter. Equity was rising rapidly to match the debt and bankers were happy to allow their clients cheap credit to gamble on what seemed like unloseable odds. The banks themselves were equally reckless so weren’t in a position to call the kettle black.

But when the 2007 credit crunch on subprime mortgages became the 2008 Global Financial Crisis, everything suddenly turned toxic. The lines of credit that had sustained a long building boom suddenly dried up. With creditors calling in loans, previous paper-wealth disappeared in a moment as property prices collapsed. Consumer confidence was shot to pieces and nobody was buying.

This was probably bad enough to cost any government its job, but the Irish Government compounded its mistakes with its handling of the financial crisis. Initially their promise to keep the financial institutions solvent was deemed a successful ploy to stop a run on the banks. But when the extent of the debt they had guaranteed for was revealed, it was obvious the Irish were in too deep. Rescue packages from the IMF and the European Central Bank came as they always do – with strings attached. Austerity was the order of the day, leaving average voters with a bad taste in their mouths. Why should they suffer for the excesses of the moneyed class?

It’s tempting to think that history will repeat itself in the way it did after 1973. The new FG/Labour government will be forced to continue austerity programs of the old government and will probably add a few of their own. The Minister for Finance will once again become the Minister for Hardship. But there are obvious differences from 1973 too. In 1973 FF were narrowly beaten, this time they will be smashed to pieces. This time too it may take longer for personal finances to recover to their 2000 highs, if ever.

Professor of Economics at University College Dublin Morgan Kelly predicts the crisis will mean the end of Fianna Fail / Fine Gael civil war politics and the rise of hard right parties looking for someone to blame. Sinn Fein may also provide an attractive nationalist alternative to voters that is not laden in xenophobia. No one knows what they really stand for beyond the Taiwanese impossibility of getting a 32-county republic. But Fianna Fail survived that handicap for 80 years so there is no reason that might not work for Sinn Fein too.