Nice vote a test of Ahern’s leadership

WE must hope Bertie Ahern and his colleagues are enjoying their break because they will have to hit the ground running when they get back to work at the end of this month.

It is not often that a newly elected Government faces an electoral test just four months after the general election. But that is Mr Ahern's situation as he prepares to re-run the EU Nice Treaty referendum in October. The experience of June 2001 will have taught him he could lose this, country plunging himself and the entire country into a difficult situation.

Everyone in this Government knows that they are likely to be extremely unpopular very soon now. Demands on the public purse continue to grow and tax revenues are depleted. All the indicators are that the Government must cut spending.

But the people have expectations and promises have been made to many sectors. Not least of these was an explicit promise from Finance Minister Charlie McCreevy just four days ahead of polling last May that there would be neither open nor clandestine cutbacks. The Benchmarking report on public service pay must be honoured, taking up in excess of another 1 billion of scarce resources. The dentists are on the industrial warpath as are the junior doctors and it could well cost the taxpayer to restore peace.

We have noted in this column in the past that the bulk of voters who turned out on May 17 last were well aware that the country was heading for decidedly tighter times. A big factor in their decision to opt for the status quo was a feeling that the main alternative, a Fine Gael-led coalition, would not help guide them through a trickier economic situation.

In other words, the voters discounted much of the election rhetoric on both sides and made up their own minds. That assessment is borne out by FF's almost passive strategy of ensuring they did not lose the election rather than aggressively going out to win it.

That pre-election voter realisation will help offset potential damage from here on from Fine Gael and Labour repeating their message that the Government was more than economical with the truth before May 17. But one wonders how long that shock absorber will last.

That doubt is augmented by Charlie McCreevy's need to finally tackle the rate of increase in public spending, something that was politically unthinkable in the last two years as an election loomed.

In the seven months to end of July 2002 public spending grew by 21.9%. Since the equivalent figure for the same period in 2001 was a 22% increase, it is clear that Charlie must try harder to meet this year's target of a 15% public spending increase. This in turn is part of a definite strategy to move to single digit increases by 2005.

The plain-speaking Kildareman insists that he will also return a small surplus for this year. Others, including the ESRI, project a deficit of near enough 1bn. So he has some work to do if he is again to confound the number crunchers.

Part of his strategy to balance the books is to pass some of the cost of services from the Exchequer to the service user. Thus we have seen an 18% fee increase by the VHI granted in the blink of an eye.

Then we saw the extraordinary decision to increase college student registration fees by 69% roughly equivalent to 15 times the rate of inflation. In the past week we have learnt that the colleges had sought something like 7% or 1.5 times the inflation rate.

This trend of on-passing charges may well gather momentum, most immediately we see signs of it in relation to the cost of FÁS courses.

Messrs Ahern and McCreevy have grounds for arguing that what they are about is not 'cutbacks' per se but a slowdown in spending. But most people are as interested in these semantic arguments about cutbacks versus spending adjustments as they were in listening to Fine Gael's pre-election contentions that the FF-PD coalition had squandered the boom. We all know prices rarely stand still and, more importantly, we are a people with expectations.

The likelihood is that feelings of discontent will grow. Several senior ministers concede privately that they expect a punishing time from September to Christmas.

That would be no great harm in the normal course of events when their next electoral test would be the local and European elections in June 2004.

But, with an important vote slap in the middle of this winter of turmoil, it is a different story.

Mr Ahern recognised this from the start by appointing his most robust political debater, Wicklow TD Dick Roche, as Minister of State for European Affairs.

Mr Roche has already been busy these past five weeks seeking to exploit the distinct political differences in the No to Nice camp, an alliance which stretches left to right and back again, from Joe Higgins to Dana, and from the Mother And Child Campaign to the Green Party.

But the Taoiseach learned in Nice mark I that he needs to do more than show up foibles in the No camp. He needs an aggressive and thorough campaign of a type which only FF loyalists can deliver. And there is some doubt about how many of these loyalists will turn out for the fight, especially given some of their own internal misgivings about the EU project, and the certainty that they will face recriminations about cutbacks on the doorsteps.

Again, Mr Ahern appears to have foreseen this difficulty by putting a direct onus on each FF TD to be seen to drive localised Nice campaigns. It remains to be seen how far this can trickle down.

When that is considered, this Nice campaign may be more a test of Mr Ahern's Fianna Fail leadership than of his standing as Taoiseach.