For 80 years, one party dominated Ireland's political scene and greased the country's economic wheels. In Friday's election, they'll take the blame for driving the Celtic Tiger into a ditch.
Revolutions are not confined to North Africa these days. In Ireland, too, there’s a whiff of rebellion in the air. It’s a revolution of the ballot box, a peaceful, political affair, but a major turning point nonetheless.
When Ireland votes on Friday, Feb. 25, its people will almost certainly topple the party that has governed their country for most of its existence as a sovereign state. That’s one consequence of a banking bust that made a mockery of the Irish economic “miracle” that had transformed the country’s reputation abroad and sense of itself at home.
The Fianna Fail party — or the “Soldiers of Destiny” when translated from Gaelic to English — are marching nervously toward disaster. The final campaign poll published on Feb. 23 placed Fine Gael at 38 percent of the electorate, Labour at 20 percent, and Fianna Fail at a humiliating 14 percent. Fine Gael’s leader, Enda Kenny, is a racing certainty to lead the new government.
For richer or poorer, in sickness and in health, Fianna Fail has been the natural party of government. Socially conservative and keenly nationalist (branding itself the “Republican Party” in a country where that term has acute patriotic resonance), Fianna Fail has frequently conflated party with country. Its brand of clientalist politics has been uncannily well-suited to a country as tightly knit as Ireland: Nearly everyone in Ireland qualified as a connected special interest for whom the party had performed favors. As the party of small businessmen and the aspirational lower-middle classes alike, Fianna Fail has been in power for nearly 60 of the past 80 years. In that way, the party’s political successes and failures are synonymous with modern Ireland’s: Fianna Fail presided over the best and the worst of times.
The Celtic Tiger economic boom era belongs to both categories. The first phase, in the 1990s, saw rapid growth based on a combination of prudent financial management, domestic investment, productivity gains, and the availability of large numbers of well-educated young domestic (and later, international) workers. The second stage was a property boom and bubble fueled by cheap and easy credit. The first stage of the Celtic Tiger’s existence was real; the gains of the second horribly illusory. GDP has fallen 11 percent in the past three years, and unemployment more than doubled to 13.3 percent last year.
In the boom years — and as the “boom just got boomier” as then-Prime Minister Bertie Ahern once memorably put it in 2006 — the electorate was happy to accept the cronyism endemic to Fianna Fail’s brand of casino capitalism. That was before the crash, of course; ever since the bubble burst, the voters have been bent on revenge. The banking bust was bad enough, but the government’s decision to extend its banking guarantee from depositors to bondholders might just be the single-most calamitous decision in the history of the state.
It seems Fianna Fail will be reduced to a rump of no more than 25 members of the Dail, the Irish parliament. It might lose every single one of its representatives from Dublin, and even many of its rural strongholds are seriously threatened. The sole glimmer of hope for Fianna Fail is the possibility that the polls may underestimate its support: It might be that Fianna Fail is suffering from an Irish version of the Bradley effect, in which voters conceal their true preferences from pollsters. Admitting to a preference for Fianna Fail is now such a shameful confession that voters might confine expressions of support to the privacy of the ballot box. It is not a matter for polite society or polite conversation.
Even so, the bond of trust between Ireland’s largest political party and the Irish people has been changed forever. The country has, these past three years, been moving slowly through the Kübler-Ross stages of grief, mourning the death of the Celtic Tiger. Denial — this can’t be happening! — turned to Anger, was followed by Bargaining with the IMF and European Union. This in turn fueled Depression and, at last, some weary Acceptance that the ship of state is stuck on the rocks and in need of major structural repairs if it is ever to float again.
Even here, however, the electorate remains wary of entrusting any party again with monopoly power. Labour, which had begun the campaign with optimistic calls for Eamon Gilmore, its leader, to be considered a credible candidate for taoiseach (prime minister) is now reduced to pleading for the electorate to return a “balanced” government. That is, a Fine Gael-Labour coalition.
In policy terms, this is pregnant with irony: A merger of the Labour and Fine Gael platforms might result in a government that actually looks quite like a Fianna Fail administration. Fine Gael argues that 73 percent of its deficit reduction program should be paid for by spending cuts and 27 percent in new taxes; Labour’s proposal is for a 50-50 split between cuts and taxes. A coalition agreement may produce something close to Fianna Fail’s preference for a 67-33 percent split.
If the Irish electorate hasn’t yet grasped the unintended consequences of normal coalition politics, it may be because it is still stunned by the fiscal apocalypse that has overwhelmed the country. The numbers are eye-popping: A country of just 4 million people is now in hock to the International Monetary Fund and the European Central Bank to the tune of $120 billion, some $30,000 for every man, woman, and child — and that’s before accrued interest.
None of the party leaders have been able to say how this money will or can be repaid. Every political conversation in Ireland these days comes back to one thing: Will Ireland default? Even Fianna Fail, the architects of the much-decried EU-IMF deal that “saved” Ireland say they want to renegotiate the agreement, securing a reduction in the 5.8 percent rate of interest payable on the loans.
Meanwhile, as part of the bailout agreement, Ireland’s budget deficit is supposed to be reduced to 3 percent of GDP by 2014. That will demand a combination of enormous debt payments and sharp reductions in government spending — an unattractive proposition, and a paradoxical one, in that no one knows where the money for the debt payments will come from. Only economic growth can rescue poor Hibernia from her current predicament, but the debt repayment schedule assumes future growth that no economist can justify.
Ultimately, the alternative is simply too gloomy to contemplate: a lost decade that will scar an entire generation, many of whose members are already scouting prospects in other countries far across the world. According to the Dublin-based Economic and Social Research Institute, mass emigration is to Ireland as inflation is to Germany — a traumatic public memory that still scars the collective consciousness — and the shame of migration spawned by dismal domestic economic prospects is, for the first time in 20 years, back as an issue of pressing (and depressing) importance.
Despite this, the legacy of Ireland’s new openness to the rest of the world has endured. The institutions that dominated Irish life — the Catholic Church and Fianna Fail — have been discredited or disgraced, and there is little appetite to replace their towering authority. Ireland is a different country now: more tolerant, more open, and more liberal — in almost every respect. Just one example of this? Sixty-one percent of voters now say they support same-sex marriage, and just 27 percent oppose state recognition of gay marriages. This is an all-but-unthinkable transformation in a country in which contraception was illegal before 1980.
The economic cycle turns and turns, but the shift in Irish attitudes is permanent. Because the new government is certain to become unpopular, Fianna Fail may not be finished forever, but the terms of its relationship with the people have been changed forever.
The question now turns to how Ireland can begin to work again. But however badly Ireland wants to maintain its status as a respectable European economy, there are no easy answers available. Enda Kenny and his Fine Gael party, the favorites in Friday’s election, say they have a five-point plan to restore trust in the public finances and boost the economy — but they will need more than bullet points and platitudes if they’re to be successful. The boom’s final legacy is an election that offers no rewards to either its victors or the vanquished.
Alex Massie writes for the Spectator, the Times, and other publications.
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