Enda, only a coalition government can help you sort out the mess we’re in

DEAR Enda,

After 37 years in Dáil Éireann and 12 general elections, you earned highest office. This outcome is testament to your team building of parliamentarians and party organisation since 2002. You have an excellent temperament for the onerous task ahead. Unlike many well wishers that will swarm to your office in the coming weeks, I am not seeking preferment or favours, as I am happily ensconced in the private sector.

The reason for my correspondence is to proffer alternative advice to that you will receive from those closest to you. Your campaign team, personal advisers, front bench colleagues and party apparatchiks will relish the full buzz of adrenalin of electoral success. An historic Fine Gael electoral performance will nurture plenty of political testosterone. For the public, observing politics from a distance, this is most unappealing — as evidenced by past excess Fianna Fáil tribalism. Flushed with victory, there will be an irresistible temptation to form a Fine Gael government, if possible, with new Dáil arithmetic.

Election campaigning was notable for Labour attacks on FG. As potential partners, it disappointed you to observe at every hand’s turn, they criticised FG more than FF. They aimed their entire fire power at Fine Gael’s manifesto and raised the spectre of specific budgetary hardships to be imposed by you. This adversarial approach was a two-way street, with plenty of FG retaliation of “higher tax” barbs. This resulted in no transfer pact for preferences, which may result in both parties losing seats to Fianna Fáil, Sinn Féin and Independents in latter counts on Saturday.

My fear is that FG has grossly underestimated the extent of economic and fiscal difficulties facing the next administration. There may be a view that heavy lifting of budgetary adjustment has been implemented. FF has painted a picture that the worst corrective measures have been put in place. As the global economy reverts to growth, prospects for Ireland Inc may appear enhanced. The EU/IMF bailout is felt to have been the lowest and most ignominious point of this negative drama. The present Government articulated a narrative that suggests the live register of unemployment has peaked. A profound shock awaits you inside Government Buildings.

Over recent months the two Brians and official government sources had a conspiracy of silence about the true depths of the nation’s insolvency. Alan Dukes asserts an additional €15bn of bank recapitalisation will be required for AIB, BoI and EBS. His view is that €50bn rather than €35bn will be required for the bank bailout package. He claims there is a liquidity shortfall of bank bond finance of €25bn over 10 years. There is no reason for him to fallaciously stir the pot. Comments of the resigning Anglo Irish Bank CFO, Mr Van Maarten, are even more terrifying. It is suggested the Department of Finance has concealed additional capital costs for that bank’s wind-up — kicking the can to you.

These grave developments will shape negotiating positions at the EU Council of March 24 and 25. Revised terms for the European Financial Stability Fund may yield a lower interest rate. Franco-German moves towards deeper economic integration within 17 member states of the eurozone will weaken sovereignty in peripheral states. Minimum wage levels, tax and welfare harmonisation and tighter controls on budget deficits are being sought. Angela Merkel’s CDU electoral reverses in wealthy Hamburg will lead to more hawkish attitudes. Goodwill for Ireland has been devalued. Our team has been off the pitch over recent crucial weeks. You face the blame for negative outcomes from Brussels.

Economic recovery is long awaited. Revised growth forecasts by the EU Commission for Ireland over the next three years are downwards. Our GNP is projected to contract by a further 0.3% in 2011 — the fourth cumulative year of recession. Consumer sentiment was sold previous pups that the worst was over and corners turned. Walls of personal debt confront individuals and households. Significant interest rate rises of 2%-3% in loan costs are already under way. Negative equity will turn to inability to pay. There is no quick fix here. Japan’s debt mountain is still evident two decades later, with the next generation taking on parental mortgages.

FG’s manifesto has numerous hostages to fortune. Michael Noonan’s adept eloquence glossed over harsh medicine. €6.5bn in expenditure cuts will hit frontline services. Not all public sector redundancies can be voluntary. Welfare will have to be reduced from €20.9bn. The tax base must be broadened through residential revenue and water charges. €4bn of a gaping hole lies at the heart of local government finances. After three years of austerity, FF grabbed the low hanging fruit. Further adjustment will inflict greater pain and suffering. In government there is no hiding place from specifics. You need an amended Programme for Government.

Given the depth and diversity of these challenges, it seems to be inevitable the voter volatility that tomorrow will turn on FF, will savage FG over the next few years. Even with low expectations, the public are self-centred. Unpopularity mirrors hardship. Memories are short. Politics of the hair shirt is entirely negative. Remember George Lee? FG TDs will be elected tomorrow that are unsuitable for the marathon of a political career. The strain of constituency politics will result in you having your own Joe Behans and Mattie McGraths. They may opt for the lifeboat as an Independent. Hell hath no fury like disappointed parliamentarians who feel their talents are not recognised by ministerial appointment.

We face exceptional challenges that only a de facto national government can confront. Coalition between FG and Labour can ensure five years’ stable government. A bloated majority means you won’t need to look over your shoulder at threats of errant backbenchers or by-election writs. The best way to marginalise FF, SF and Independents in opposition is to make them utterly irrelevant, being so powerless. The price of a share out of office with Labour is worth paying in terms of longevity. You can have your cake and eat it. Try joint administration. If it becomes paralysed, you can seek to go it alone, when your ministers are more experienced and savvy.

Temptation to govern alone is akin to the seduction of a mistress, rather than the mundane routine of married life. All the excitement and passion of power in a single party government won’t give the durable benefits of monogamy. Erstwhile fans, media, and floating voters can turn on you as they did Brian Cowen. You need an insurance policy of sharing the blame and burdens across FG and Labour. Your greatest ambition could be to secure two terms of office. Independent TDs are not members of government. Their agendas are insatiable. Their trust will terminate. Distance yourself from the chorus of your cheer leaders in the aftermath of FG’s biggest win. Time to be cute and cautious in constructing an FG/Labour cabinet. Good luck.

Best regards,

Ivan Yates