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Column: Promissory note deal sees Fine Gael come out on top

The response to the promissory note deal has ranged from muted in the case of Fianna Fáil to outrage from Sinn Féin and the Independents – so what does this deal mean for Fine Gael, asks Gary Murphy.

Gary Murphy

THE ECONOMISTS, CELEBRITY and otherwise, complain that it’s a bad deal saddling future generations with a colossal debt that is not ours. Other voices of dissent from the noble Ballyhea protestors to the trade union movement make the same point. Private bondholder debt is now clearly sovereign debt.

There is no more vagueness around the payment of the promissory notes. There is no write down. Debt is debt which has to be paid no matter how far off the day. It’s not our debt but thanks to the bank guarantee scheme, and we still don’t know the true details of that murky night, it is.

Opposition politicians complain that the government didn’t seek a write down to which the Minister for Finance, rather sensibly, replies there was no point. It is not a particularly good negotiating strategy to have as your opening gambit a move that your opponents will simply not entertain or take seriously. In fact if that was to have been the government’s opening move then we should really despair of those leading us.

It has been made clear to the government ever since it took office in March 2011 that a write down was simply not an option. For the government to have gambled on such an approach again would surely have made getting any reasonable deal close to an impossibility.

The Response

The opposition response to the deal has ranged from muted in the case of Fianna Fáil, who will always be tainted with the fact they were the authors of the infamous bank guarantee, to outrage from Sinn Féin and the Independents. The heckles of derision howled at Micheál Martin from the government benches when he claimed in his Dáil speech that there was always going to be a deal and that the government was going to claim credit for it summed up his problem.

Having resurrected Fianna Fáil from the ashes of the 2011 general election Martin now faces an increasingly difficult political path forward as the government will crow about the deal while reminding the electorate that it was Fianna Fáil who originally saddled them with the debt that the coalition has renegotiated. Martin’s plaintive cry that the original promissory note deal was foisted upon the government that he was a senior minister of is unlikely to hold much sway with an electorate anxious for any kind of good news after years of austerity.

Sinn Féin’s strident opposition to the deal is unlikely to do it much harm in the polls. It might be fantasy economics to advocate and expect a complete write down but it clearly is good politics. Being in opposition allows such luxury positions to be taken. This is something that Fine Gael and particularly Labour have learned to their cost now that they are in government.

Feisty speech

The Tanaiste’s feisty speech in the Dáil on Thursday showed a return to the Gilmore for Taoiseach of the 2011 general election campaign. The barely disguised contempt he showed at the end for those who had jumped ship suggested he had recovered his political antennae which he seemed to have waylaid amidst the ever deepening gloom of the budgets Labour has been party to over the past two years.

Labour has been stuck in the last number of opinion polls at its core vote of about 10 per cent. It’s task now it to claw back some of the increasing floating vote that brought it to its largest ever result of over 19 per cent in 2011. Labour’s history of coming out of coalition governments with much worse results that when it entered seems likely to continue but for now the party is likely to be at least somewhat rejuvenated by this deal.

The big political winners, however, are likely to be Fine Gael. After Enda Kenny’s spectacularly disastrous performance in responding to the Magdalene Laundaries report in the Dáil on Tuesday when he was curiously out of kilter with the prevailing public mood, the Taoiseach returned with a forceful if understated performance on Thursday.

Notwithstanding the usual political jibe against Fianna Fáil his speech most likely reaffirmed the public’s view of him as a decent man trying his best in pretty intolerable circumstances. And most importantly for him, one who procured a deal that many thought he couldn’t get.

Not what they promised, but…

As he pointed out himself the deal will not sort out all our economic woes, it does saddle onerous debt on future generations, and it certainly is not what Fine Gael promised in the last general election campaign. It is, however, a damn sight better than what many of the economists and his political opponents expected he could achieve.

He has also been blessed with good judgement in his Minister for Finance Michael Noonan who has showed a steady hand throughout these past two years. Noonan might have been a terrible leader of Fine Gael but he clearly is on top of his brief and an able negotiator.

Irish politics is in an odd place. The old predictable voting patterns are gone. No one really has any idea how the next general election will turn out and there is a still a hard economic road ahead for both the government and the people.

The spectacle of our elected representatives voting yea and nay early on Thursday morning to liquidate the former Anglo Irish Bank when most of them, if they are honest, had very little idea as to what exactly they were voting for and what the outcome would be, sums up the rather surreal nature of our politics. Still as of now it is a politics which has a future.

Gary Murphy is Associate Professor of Politics and Head of the School of Law and Government at Dublin City University. For more articles by Gary Murphy click here.

Read: As it happened: Michael Noonan and Brendan Howlin on promissory note deal>

Read: TDs question lack of debate on promissory notes>

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