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Economic recovery still the only yardstick by which voters measure Coalition success

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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.

Connacht Tribune

Labour’s awakenings will take time to reap any real reward

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Passing of the baton...Michael D Higgins with his successor Derek Nolan at the Galway West count at Leisureland.

World of Politics with Harry McGee

The film Awakenings was based on the experience of the psychiatrist Oliver Sacks with patients who had contracted a disease called encephalitis lethargica during and shortly after World War I.

Thousands contracted it around the world. How they got it has remained a mystery but it could have been connected to the Spanish Flu outbreak at the time.

It essentially left them in a catatonic state, sleeping, unmoving, like zombies for decades. By the time Sacks came across a group of them in New York, they were all residents of an institution called the Beth Abrams Home for the Incurable.

That did not leave much to the imagination. Some of these people had been essentially sleeping for over 40 years.

He experimented with a drug called L-dopa, which had been used successfully for the treatment of Parkinson’s Disease.

The effect was extraordinary; the drug was like an electric shock that jolted the patients back to life and to sentient existence.

The ‘miracle’ had its drawbacks, however. After a while, it became difficult to control the patients as they became increasingly manic. Ultimately a tough decision was taken to withdraw the drug and the patients relapsed into their catatonic states.

All of that is a bit of a stretched way of saying ‘flash in the pan’, but life sometimes teaches us that success can be very temporary indeed.

There is a long pattern in Irish politics, for example, of a winner in a by-election going on to win a seat in the subsequent general election. However, less than six months after winning a by-election in Wexford, Malcolm Byrne of Fianna Fáil got turfed out in the general election.

Look at it the other way. Sinn Féin were the big losers of the 2019 local elections but turned the ship around completely less than nine months later. The lesson to be learned is success or failure is never a permanent phenomenon in politics.

For more, read this week’s Connacht Tribune.

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Connacht Tribune

Changing political landscape fast becoming Double Dutch

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Big winner...Ivan Bacik after her by-election victory.

World of Politics with Harry McGee

Holland is so used to enduring a perennial political log-jam – where every election just digs you deeper and deeper into a rut – that they’ve actually come up with their own name for it.

It’s called Dutchification – when society has become so urbanised, and globalised, and fragmented, and lacking cohesion, that no party, or parties, can expect to win any more.

The former RTÉ journalist Peter Cluskey wrote a very interesting article last week about this continued electoral limbo they have in Holland, where he’s been based for many years.

And truth be told, the same is happening here; the day of overall majorities is long gone.

We have gone from having two large parties to having three medium sized ones (and with the demise of Fianna Fáil it could even by two medium sized ones, or one large and one medium).

The reality is that it will be difficult for the foreseeable future for any two parties to form a coalition, and it could be difficult for any three parties to do the same.

The old fealties to the three long-established parties have been blown out of the water.

The biggest pool of voters now has no permanent loyalty. They are the floaters.

And there is a growing ‘none of the above’ contingent too, possibly spurred on by the cynicism, empty populism and downright lies, of social media.

They will vote for a party that opposes the government. And once that party they support goes into government, they immediately withdraw their support for it. Short of coming up for an elixir that guarantees everlasting joyous life, these voters will never support a party in government.

I know it sounds cynical but if you talk to enough people around the country – as I always try to do – the person with a deeply cynical disposition and a hate of politicians is no longer a rarity.

Sinn Féin is the growing party at the moment and – from this vantage point – looks like it will be in government for the next spin.

For more, read this week’s Connacht Tribune.

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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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Connacht Tribune

Toughest of first years for the three at the top

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Tough year...Coalition leaders Eamon Ryan, Tanaiste Leo Varadkar and Taoiseach Micheal Martin.

World of Politics with Harry McGee

Just a year ago, we got a new Government. It contained two parties who had separately led governments throughout the history of the State but had come together for the first time. Then there were the Greens. It was formed during a once-in-a-lifetime crisis, caused by a Coronavirus pandemic. It came after an election of huge churn where the first time no single party won over 50 seats or, indeed, 40 seats. Seven of the Ministers were new to Government and two were recently-elected TDs.

Almost all of the collective effort in the past year has gone into addressing the enormous challenges of Covid-19. It has meant unprecedented levels of spending, of support, has led to extended lockdowns, huge percentages of people without employments, and whole sectors shut down for 15 months and counting.

Every new government has teething problems. Given those additional challenges, this coalition was not going to be an exception. Many of the Ministers had lousy starts and looked out of their depths, or out of sorts.

The administration of late is on a more even keel but the big challenges lie ahead when the huge financial supports currently in place begin to be dismantled.

I interviewed Eamon Ryan last week. He does not do negative. Most others would see the jagged internal Green Party rows and squabbling as a huge drag; the bitter divisions detracting from the achievement; the reputation of both Ryan and deputy leader Catherine Martin being damaged in the process.

Not for Ryan. While he acknowledges there will difficulties this is the prism through which he viewed the Greens’ first year in government and its response to Covid.

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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