Political World
Economic recovery still the only yardstick by which voters measure Coalition success
World of Politics with Harry McGee – harrymcgee@gmail.com
It might have been Bill Clinton who made the phrase famous – but it was his mercurial strategist James Carville who thought it up. “It’s the economy, stupid” was so powerful a catchphrase that it propelled the Governor of Arkansas into the White House.
Since then the four words have been ransacked and pillaged to death by journalists, commentators, pundits and by politicians. It doesn’t make them any less true.
This Government – or its major party at least – will be returned to power if the economy gathers sufficient momentum between now and Easter 1916.
People vote with their pockets. When it comes to general elections, the citizen tends to vote for the party it trusts most with handling the economy, securing the future, and not squandering taxpayers’ money.
Which brings us to the two arguments surrounding the announcement by the Government last week that it was going to exit the bailout without seeking a contingency credit line from the new EU bailout fund.
There is a political argument and an economic one – they are not mutually exclusive but they can be dealt with separately.
The first argument has been economic and it’s been a kind of academic one. The Government will stand on its own two feet, without the steadying hand of the Troika, because the National Treasury Management Agency has some €24 billion in reserve.
The reason it has that kind of cash in the kitty is because it borrowed it, at market rates, somewhere north of the current rate of 3.5 per cent for ten-year bonds.
So that borrowed money has come at a cost – an extra €1 billion a year. It could be that the total borrowing requirements between now and the end of 2016 could be €52 billion – that’s €34 billion to cover repayments and interests on loans and a further €18 billion to cover the gap between what the State spends each year and the revenue it takes in through taxes, charges and excises. It would mean the State would have to borrow an additional €30bn at a rate of 3.5 per cent.
If the Government had availed of the fall-back funding mechanism – an insurance policy in a sense where it doesn’t have to draw down the emergency funding unless things get very ropey – the interest rate available would have been less, at around three per cent.
And even though there is small print and terms and conditions apply, it would have meant the cost for the Government – and the taxpayer – might have been considerably less.
There was no shame in it, said Fianna Fáil. It didn’t mean another bailout package, they said – but, politically, that’s precisely what it would have meant.
Sinn Féin has been describing the contingency fund for months as a “second bailout”. Technically, the party was not correct in that portrayal but it was not incorrect fully either.
In any way, no matter how the Government would have presented it it would have been hard for it to parry the accusations that far from taking the country out of economic bondage, it was willingly taking us all in for a second spin on the merry-go-round.
And so the Government’s argument was grounded on the second consideration, which was a wholly political one. Sure, it might prove to be more expensive to exit with a ‘clean break’ but politically, the decision (as the credit card advert goes) is priceless.
I was a guest on Vincent Browne’s programme the other night and he kept on returning to the theme that it would have been cheaper for us to stay in a quasi programme.
For more, read this week’s Connacht Tribune.
World of Politics with Harry McGee
Academically, politics is described as a science. But in the real world, it’s more of an art – and one of the big decisions a Government has to make is to decide when to call an election.
Will they see out the full term, or will they go early – either to mitigate the damage they will ship, or to secure a victory before things go awry, or the economy takes a dip, or some kind of controversy erupts?
Timing is everything.
And there’s a bit of art to that – not to mention a lot of luck. If you call it early and win big, you’re a genius. If you call it early and lose, you are the political version of the village fool.
Charlie Haughey was a poor judge of the public mood. Twice he called snap elections and on both occasions they backfired. Haughey succeeded Jack Lynch as Taoiseach in late 1979 and did not – technically – have his own mandate. He tried to remedy that by calling an election in 1981. But it recoiled. Ray MacSharry warned him not to hold it during the H Block hunger strikes when republican prisoners were dying each day. He did not listen to the advice and found himself out of office.
After his return to power in 1987, Haughey tired of presiding over a minority government that kept on losing votes in the Oireachtas (the opposition won nine private members motions).
So he called a snap general election and it backfired. Fianna Fáil lost seats and had to broker a coalition deal with the Progressive Democrats and his long-standing political adversary Dessie O’Malley.
For more, read this week’s Connacht Tribune.
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World of Politics with Harry McGee
I was cycling down Mount Street in Dublin on Tuesday. It’s a wide esplanade that links the Grand Canal with Merrion Square. The street is a mixture of fine Georgian buildings and modern office blocks.
About half-way down is the office of the International Protection Office, which deals with asylum seekers who have arrived in the country.
Needless to say, the office has been overwhelmed in the past year. Besides an estimated 80,000 refugees who have arrived from Ukraine, there have been about 20,000 people from other parts of the world who have arrived into Dublin (mostly) claiming asylum.
The numbers peaked around Christmas, but they have been falling a little. In January, more than 1,300 people arrived seeking asylum but the numbers fell back to 831 and 858, in February and March respectively.
They are still huge numbers in a historical context.
So back to my cycle on Tuesday. I knew that some asylum seekers were camping outside the International Protection Office, but I was taken aback by how many. There were six tents lined up on the pavement directly outside. Then on the ramp that led down to the basement carpark on the side of the building, there were about another 20 tents.
It looked like what it was, a refugee camp in the middle of Dublin’s business district. If you pan out from Mount Street, you will find tents here and there in nearby streets and alleys. There were a good few tents in an alleyway off Sandwith Street about 500 metres away.
For more, read this week’s Connacht Tribune.
Connacht Tribune Digital Edition App
Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.
Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite HERE.
Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
World of Politics with Harry McGee
God that was a dramatic and historic weekend in England, wasn’t it? So much excitement, so much change, so much hype, so much out with the old and in with the new, and what looks like the coronation of a new leader. Yes, the local elections in Britain were something else weren’t they!
Apologies for not going on about King Charles III but the contract I signed when I became a lifelong republican forbids me to discuss the topic!
I know the British local elections sound a bit boring by comparison, but the results were stunning.
The Conservatives lost nearly 1,000 seats, the British Labour Party gained almost 500 and both the Lib Dems (with 350 gains) and the Greens (gaining over 200) also had amazing days at the polls.
It was Labour’s best day since 2002 but its victory was only partial. The Greens and the Lib Dems actually made gains at the expense of Labour in more affluent areas, and in parts of Britain where there were high numbers of graduates.
It was in the Red Wall constituencies in the North of England where the Labour recovery was strongest. These are working class constituencies with pockets of deprivation where people voted for the Labour Party forever. But all of those constituencies voted for Brexit and then voted for the Tories in the next general election. Labour is now winning back some of those votes.
Local elections are classified as second-tier elections which essentially means – from a national perspective – they are not life-or-death affairs, and not everything turns on them. Of course, it’s really important to have good local representation. But they are not an amazing weather vane for who rules the country.
For more, read this week’s Connacht Tribune.
Connacht Tribune Digital Edition App
Download the Connacht Tribune Digital Edition App to access to Galway’s best-selling newspaper.
Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
Or purchase the Digital Edition for PC, Mac or Laptop from Pagesuite HERE.
Get the Connacht Tribune Live app
The Connacht Tribune Live app is the home of everything that is happening in Galway City and county. It’s completely FREE and features all the latest news, sport and information on what’s on in your area. Click HERE to download it for iPhone and iPad from Apple’s App Store, or HERE to get the Android Version from Google Play.
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