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Column Faction fights are sapping confidence in FG and Labour

The coalition partners appear more concerned with playing tug-of-war with each other than creating a new form of politics, writes Green Party leader Eamon Ryan.

IF I WAS to give the Government a new year resolution, it would be for each Minister to serve all the people, all the time, rather than getting caught up in faction fights where both parties measures their own gains by how much the other side of the cabinet table is seen to lose. Fine Gael and Labour have been heading down that road for the last few months, which is why I think confidence in the Government is slipping. Both sides seem more intent on pulling the blanket of favourable publicity over to their side of the coalition bed, rather than creating new and efficient ways of working in Government.

The fact that Labour has been seen to have lost out in the recent tug-of-war over the budget is a problem all of their own making. Their Party Chairman might think it all went wrong in the deeds that were done in the last two years, but the seeds of their difficulties were sown in their loose words in previous years.

In opposition, they played the economic crisis for every rise they could get in an opinion poll. In the last election they dealt up false promises that they could never uphold. Now they don’t even have the usual excuse of saying that the figures are worse than they had expected. At the moment of greatest peril the last Government opened the books to the opposition in a vain attempt to set up a national administration and keep the IMF away, but neither Labour or Fine Gael showed any interest in that offer.

Rings untrue

Their line that everything has changed since their arrival in Government still rings untrue because everyone can see that they are following the economic policies that were set in place by their predecessors, who undertook two thirds of the necessary adjustment. Taxes were raised, for the most part in a progressive way, cuts were made in a really hard way and we started cleaning up our banking system in an up-front sort of way.

The Irish people have shown a remarkable resilience in that hard process and in fairness Labour and Fine Gael have implemented two years of the four year plan, bringing us half of the remaining distance to a balanced budget. If they hold their nerve for the next year or two and the rest of the world does not fall apart, then there is a real chance we might get our economic situation back under control. The biggest risks will arise if their internal rivalry gets completely out of hand or if the European Central Bank fails to act on the words of the European leaders last June to look again at how our public debt covering the capital hole in our banking system is managed.

Beware of self-congratulation

In their book, This Time is Different, Carmen Reinhart and Kenneth Rogoff say that the greatest policy insight from similar crises in the past is to be wary of premature self-congratulation and complacency. As they say:

Several debt crises involving default or near-default occurred on the heels of countries’ ratings upgrades, joining the OECD and being generally portrayed as the poster children of the international community.

I don’t think anyone here sees ourselves as that ‘poster child’. Unemployment is too high and forced emigration too strong a scar in our collective consciousness for anyone to engage in self congratulation. However, the risk of us slipping up at the very end of this difficult process is very real.

The European Central Bank needs to act fast and fairly so that the payment of the promissory note due in March is put into a more sustainable time frame. It is not the time for fetishistic definitions as to what is or is not monetary financing. Nor is it the time to mix the issue of changing debt terms with the changes that are also needed to the loopholes that exist in corporate tax law. Our tax rules do need to change but that should be done as part of a wider international agreement. It makes no sense to use the economic dilemma in one country as a lever to force a unilateral change, which might only cripple the country further and leave the same loopholes in place in other locations.

Let’s get it right

The prize if Ireland manages an exit from our programme would accrue to everyone in the euro zone. A sense would grow that our Union is stronger than the markets had believed, which would bring down the cost of debt repayments for a range of different countries. The European political system could help that process by acknowledging that it made the crisis worse by being slow, timid and uncertain in the way that peripheral countries were dealt with over the last five years.

It is now time to manage the crisis in a more constructive rather than vindictive way. We have a historic opportunity to get it right and that is something we should not lose. It is not that Ireland needs to be treated as a special case but that in dealing with our immediate problem we make the case for being determined and being united and being strong.

The Irish political system also showed all sort of failings in allowing the country get into trouble in the first place but I will be proud if collectively we can get our people out of that fix. The two parties in Government need to put aside their differences and start showing some real leadership by adhering to that common goal for the year to come.

Eamon Ryan is the leader of the Green Party, and served as Minister for Communications in the Fianna Fáil-Green government from 2007 to 2011. You can follow him on Twitter at @EamonRyan.

Column: Sharing power is bad for the health of junior coalition partners>

Read: Column: Want a debt deal? Then let’s pressure the German MPs opposing it>

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