Coalition parties need to show signs of greenshoots to justify optimism

Date Published: 02-Jan-2013

We know this much from history – the recession won’t last forever.

But what history cannot really tell us is how long more it will last. There are too many variables. The Irish economy is dependent (hugely) on what’s happening elsewhere – in Britain; in Europe and throughout the world. Trying to figure it all out is like doing a 10,000 piece jigsaw depicting a cloudless blue sky.

However, it doesn’t take a Nobel Prize in economics to figure out that a lot of it depends on growth and recovery – in the EU and US economies – and no dramatic slow-down in China or in any of the other emerging economies. And the other factor is debt; that the world has enough collateral to cover the gargantuan pile of past, present and future debt that has been racked up.

I interviewed Tánaiste Eamon Gilmore just before Christmas. He was keen to share his parting shots at Labour’s last parliamentary party meeting earlier that week. He told the party’s (remaining) TDs and Senators that 2013 would be a signal year, that it would be when Labour Party TDs would need to start thinking about a post-recession Ireland.

The implications (and optimism) were clear – after six years of hardship 2014 would see all the metrics that were going up now start going down (unemployment; social welfare budget; mortgage distress cases, interest rates on sovereign debt) and all the metrics that were going down going up (growth, jobs, house purchases, retail and manufacturing sales).

It’s true that the portents are better now than they were a couple of years ago. If the Government’s confidence is well placed and it does get a deal on bank debt, that will certainly allow Ireland to cycle its own bike in 2014 (albeit with stabilisers supplied by the EU to prevent any dangerous wobbles in the initial phases).

There is always the uncertainty, though – is glas iad na cnoic i bhfad i gcéin. And so many things can go wrong between now and the beginning of 2014 that it would be foolhardy to predict a return to some kind of promised land.

What we are interested in is looking at it from the political perspective. And from the Labour Party point of view, Gilmore needs to be right; it will need to show real and tangible signs of a recovery from recession by the end of the year. And that makes this year so crucial.

Even a cursory trip through modern political history will tell you that successful coalition arrangements are rare and that, more often than not, they come at a price.

That price, at its most basic, is that both parties will suffer. The General Election that puts them into power normally represents the high water mark for a coalition, electorally. In the vast majority of cases, it is the smaller coalition partner which acts as the mudguard, taking all the dirt and weathering that comes with a somewhat unnatural alliance with another party with a different philosophy and different personalities. Look at the Greens and the PDs here and the Liberal Democrats in the UK.

When they came into power Labour portrayed this arrangement as a kind of national government to bring the country out of crisis. It also made a big play of the fact that it was a much larger smaller party than is normally the case and it held more sway.

But the fact of the matter is that Fine Gael still has ten ministries and Labour has five. And that two to one ratio of seats has so far been matched with the same ratio of influence. Fine Gael has been seen as the dominant party in the public perception… and that has been reflected in the opinion polls.

Nobody ever said it was going to be easy and the first two years in power for the new Government have been amongst the most difficulty in the history of the State. Both parties made grandiose and promises that couldn’t be fulfilled.

In addition to that, there is a element of Labour’s support, on the left of the party, which believes the party has undermined its own principles in government. And so both have suffered; the smaller party to a greater degree.

Read Harry McGee’s full column in this week’s Connacht Tribune.