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From: Irish Political Review: Editorials
Date: April, 2010
By: Editorial

Ireland: The State We're In

Cowen came to power in Ireland with an agenda of restoring the autonomy of the state, notably by freeing it from social restraints to enable it re-shape the economy as it saw fit. But it was a different agenda from that espoused by Labour Party statesman Ruairí Quinn, who last year, at the "Lemass International Forum", in a curious metaphor attacked the "blancmange where the slowest carrying caravan on the tail of social partnership is the one that's leading the speed of change" and who had previously denounced the "cloying effects of social partnership".

Cowen's ascent was certainly marked by a distancing of the state from social partnership and a resurgence of the central role of the civil service, and particularly the Department of Finance. If this had been for its own sake, as Quinn espouses, it would have represented a reactionary development of the Irish political economy, as was pointed out at the time by this journal.

As the financial crisis bit deep in late 2008 and early 2009, and the state believed the economy was facing meltdown, the Government met with the Unions to give social partnership its chance to come up with the answer. The Employers — IBEC — stood on the sidelines, effectively in support of the Congress position. The National Economic and Social Council (NESC) — the "senate of social partnership" — came up with some pious but inane solutions. The Trade Unions had sought an extension of the period of "financial adjustment" to 2016 — three years beyond the Government plan — so as to ameliorate the social cost of contracting state expenditure, and on the basis that there would be no public sector salary cuts, regardless of what was happening through market forces in the private sector.

The Trade Union position was seen by Government to be unrealistic — and the international markets were anyway unlikely to wear it — and so the Government moved to re-assert the hegemony of the state over the recovery process and stabilise the country's economic and financial viability. To date the three most effective Fine Gael leaders of the last 50 years (Fitzgerald, Dukes and John Bruton) have abandoned party to row in behind the Government strategy for patriotic reasons. They decisively undermined Fine Gael's nit-picking "alternatives" to NAMA (National Asset Management Agency) in the process.

The recovery strategy came in stages. First came the Bank Guarantee Scheme, denounced by the EU leadership but since widely replicated elsewhere; then the McCarthy Report; then a rigorous cutting of public expenditure over two Budgets; and finally NAMA. Nerves were calmed, the IMF and EU lined up to praise the Irish strategy, and Ireland was lifted from the PIGS group of states threatening to 'fail' (Portugal, Italy, Greece, Spain: the acronym was coined by an influential Financial Times columnist; originally the 'I' represented Ireland).  

The backing for the Government from the Fine Gael statesmen—as with the Tallaght Strategy of 1987—was based on an assumption by them that stabilisation and recovery could only be implemented at large-scale social cost and against the wish of Irish society.

Once again — as with Haughey in 1987, when he underpinned his recovery strategy with the institution of Social Partnership based on the European model — the Fine Gael statesmen have been proved wrong. Major cuts in public expenditure and in the public sector salary bill have this time been achieved while maintaining the substance of the welfare state created over the last decade and keeping the door open for a return to Social Partnership. In an ingenious twist, the Government has committed itself not to cut but to close the "gap" in public expenditure by €3bn in each of the next two budgets. Effectively, the more that this gap is closed by increased revenues — through a combination of the effects of a recovery in international trade and tax increases — the less will be required in actual cuts. And this leaves plenty of room for the Social Partners to bargain for, when and if they chose to re-engage with the realities of the crisis.

Workers in the public sector have largely accepted the logic of the Government position and responded to Union calls for protest with a distinct lack of enthusiasm. That the Chief of Staff of the Irish Army is no longer paid more than his counterpart in the nuclear-armed British Army, which is involved in renewed imperial missions around the globe, is regarded as a necessary rebalancing of things. Or, at a more mundane level, Irish politicians and civil servants have been reduced from their above-top EU salary levels to something approaching a saner norm. Though, mind you, there are many further "adjustments" that could be contemplated, with Hospital Consultants still luxuriating in incomes two and a half times their French or German equivalents.

But, as part of the turnaround implemented by the Cowen Government, the Department of the Taoiseach has been sidelined and a civil service leadership elite, led by (though broader than) the Department of Finance, has emerged as the Command Staff of the process.

The Government has succeeded in this strategy beyond both its own wildest dreams, as well as those of the senior state servant stratum. There has been a massive recovery in confidence in the state among civil servants and policy-makers. A coterie of senior state officials has now been gathered around the Cabinet leaders and it is effectively driving state recovery strategy in unison with the inner Cabinet leadership cadré of Cowen-Lenihan-Hanafin-Martin-O'Keeffe-Ó Cuív-Carey-Gormley.

The George Lee incident was a useful interlude, indeed a watershed in public perceptions of politics. It has led to a resurgence of belief in the public interest commitment at the heart of politics that cannot be replaced by the indulging of prima donnas from the media. The influence of the media—and particularly of media Cassandras such as Professor Lucey and Fintan O'Toole of The Irish Times, David McWilliams and others—peaked with Lee and has been falling with him.

The essential refusal by The Irish Times in the 1920s to believe that the Irish natives are other than corrupt, or incapable of running a state, has morphed into a populist or leftist liberal Oppositionism that is essentially the same thing. But balance has now been restored in the public mind over the relationship between politics and the media. The howling of media commentators, and of the middle class mobs mobilised through RTE events like the Pat Kenny TV show Frontline, are now parading their "anger" to a less receptive society.

The Unions throughout, while talking class war, have recently made it clear that they are available for a renewed Partnership process, one that no longer will require as a pre-condition—in the short term at least—a reversal of last year's salary cuts. And the Government is responding with (conditionally) open arms. The beginnings of a process is underway towards an agreement on a transformation strategy for the public service (based on the 2008 OECD Report Transforming Ireland's Public Services), which goes way beyond the moderate but still substantial "modernisation" achieved through two rounds of benchmarking.

There are also preliminary talks about a follow-up full Social Partnership arrangement. But the turn-about has been decisive. The NESC (National Economic & Social Council) has been pared back to its essential role, with the add-ons of the NESF (National Economic Social Forum), along with Peter Cassells' "Centre for Partnership" abolished without a whimper. In addition the once mighty FÁS (training) organisation has been destroyed, with its Social Partnership Board disbanded and a Ministerially-appointed replacement board appointed, devoid of a single Trade Union representative. The legislation required for this was passed by a sullen Dáil, — without a murmur of protest from (New?) Labour. But if a Partnership deal is reconstructed, it will represent little more than a social contextualising of the recovery process (a good thing in itself) — rather than the driving force of it, which is located at the centre of Government. This is the fault of the Social Partners, not the Government. If they had come up with a credible answer to the crisis, the role would have been theirs for the taking.

The latest triumph by the Government, in its recovery from its 20% poll ratings at the height of the much invoked "public anger", is the reshuffle announced on 23rd March. Brian Lenihan remains at the helm of Finance as long as his health allows, an act not without an echo of the self-sacrificing spirit of the GPO of 1916, and noted that way by the public.  Mary Hanafin's move from Social and Family Affairs to Arts, Sports and Culture is not a demotion. Since January's "diaspora" gathering at Farmleigh on the economic potential of the arts and "creative industries", this issue has moved to the centre of Government strategy. As Bill Gates told Hanafin, what Microsoft needed was not computer engineers but creative people, and this area is regarded as having huge employment and enterprise potential into the future — a perspective boosted by the five recent Academy Award nominations for technical creativity to graduates of Ballyfermot College of Further Education.

The re-arrangement of the Education, Skills, Employment and Social Protection portfolios also signifies some dynamism and an imaginative restructuring of public services, and is in line with the central employment and enterprise aspects of the recovery strategy which are now about to be rolled out.

This magazine consistently expresses the hope that the Fine Gael and Labour parties develop a substantial politics of opposition and potential Government, but they continue to disappoint. In response to the re-shuffle, Leo Varadkar, FG frontbench spokesman on Enterprise, attacked Cowen with a remarkable paraphrasing of a 1988 US presidential election jibe: "Taoiseach, You're no Seán Lemass. You're no Jack Lynch and you're no John Bruton. You're a Garret FitzGerald. You've tripled the national debt, you've effectively destroyed the country …. So enjoy writing your boring articles in The Irish Times in a few years' time"(The Irish Times, 24th March). Thus is Garret's refusal to endorse FG's economic 'alternative' resented among the Blueshirts!
And the American analogies continued with Labour, with Gilmore surveying the re-arranged Cabinet with the weak imitation of an Obama flourish "This is not what real Change looks like!"

Rather than emerging as a credible alternative, Fine Gael/Labour seem ever more trapped in their traditional role, "fruitlessly waiting", as The Irish Times put it at the start of the year, "for a devastating tribunal disclosure which would propel them into office", rather than using "their time in waiting to consider their policies for government" (2nd January 2010). The evidence is that they remain content in the role of offering an occasional rest for the natural party of Government while it gets on with the job.


Ireland: The State We're In. Editorial
Brother England & Gallipoli. Editorial
David Cameron's UCUNF. Tom Doherty
Readers' Letters: The 'Square Peg' Responds. Dennis Kennedy; Sinn Fein And Gallipoli. Wilson John Haire
Garret, Greeks And Germans. Jack Lane
Two Poems. Investing In Death. Nightie Night. Wilson John Haire
Shorts from the Long Fellow (The Media Agenda; Democracy Is The Problem! Electoral Reform; The Print Media; Ryanair And Hangar 6; Ryanair's Real Motivation?; Retail Madness
Connolly's Rebel Song At Imperial War Museum. Manus O'Riordan (report)
A Founder Of The State. Professor Cathal MacSwiney Brugha
Bill Sharkey. James Daly (Funeral Oration)
Casement Events. Ted O'Sullivan
The Spy Who Grew Up With The Bold. Manus O'Riordan (John Betjeman, Part 2)
Barack Hussein Obama & The IRA. Seán McGouran
DIBlues 2: Tom Barry. Jack Lane
Religion And Nationality
. Roy Johnston
Gallipoli Cost Us More Than Soldiers. Dr. Pat Walsh (report of article and letter)
And The Band Played Waltzing Matilda. Eric Bogle (extract from song)
Es Ahora. Julianne Herlihy (The Peter Hart Syndrome; Kenya, The Mau Mau And Britain; Sky TV And Disaster News; African Aid)
Biteback: British Honours? (Report of letters: Niall Meehan; Tom Cooper)
BICO On Wikipedia. Editorial
Labour Resolution. Northern Ireland Constituency Council (report)
Does It Stack Up? Michael Stack (Stroke Politics; Scam Artists; Nama
Israeli Diamonds Are Not Forever! Daniel Teegan
Ibec Wrong On Public Sector Numbers. Manus O'Riordan
Labour Comment, edited by Pat Maloney: Moment Of Destiny?