Cowen’s cure may be worse than the disease – it’s time we decided

DID you happen to see the Heineken Cup final (albeit on Sky)? There was a defining moment in the second half.

Both Biarritz and Toulouse were evenly matched, except in the scrum. Repeatedly, Biarritz were driven backwards, irrespective of who had the put-in, invariably conceding a penalty. After a goal-line incident, Biarritz had the choice of its own scrum or a 22-metre drop-out.

Co-commentator Stuart Barnes was shocked as they opted to kick possession away instead of suffering another scrum. This symbolised an admission of weakness. The moment reminded me of Brian Cowen in the Dáil last week. A head of steam has built up with opposition demands for the by-elections to be held. Next month will mark a year’s deferral of the Donegal South West by-election, when Pat the Cope Gallagher was re-elected as an MEP.

The resignation of George Lee and retirement of Martin Cullen from politics have resulted in three original Fianna Fáil seats (including Seamus Brennan’s in South Dublin) being vacant. The ministerial PR juggernaut reminds us we have turned yet another corner and that, really, Cowen isn’t to blame for all our economic woes. Their belief in their own assertions rings hollow in their refusal to face the electorate. Even the Údarás na Gaeltachta poll this year has been deferred.

The prospects of the Government retaining these seats are problematic. Inside word in Waterford is hurler Tony Browne may stand for Fianna Fáil. His high profile and lack of political pedigree means he can side-step a lot of flak as a newcomer. Labour seems to be in some disarray. The sitting TD, Brian O’Shea, would like one of the three city councillors to stand. Labour headquarters would like to draft in the sitting Mayor of Waterford, independent John Halligan. He could do very well, even as an independent.

O’Shea may fear for his future prospects in a general election. Halligan’s problem is that his appeal is limited to the city. Fine Gael has high hopes for the youthful Senator Paudie Coffey, based in Portlaw. The likely scenario is FF versus the rest. The sum of the parts of the rest should transfer to defeat FF.

In Donegal South West, the FF standard bearer will be Senator Brian O Domhnaill. He is a credible candidate. The results of the last general election with Gallagher and Coughlan indicate FF has a chance of success. Fine Gael has selected Cllr Barry O’Neill. Cllr Frank McBrearty runs for Labour. The strongest opposition candidate is likely to be Sinn Féin’s Senator Pearse Doherty. My deep-throat FF friends advise the Achilles heel of the Fianna Fáil campaign here is Pat the Cope. Apparently, he was never close to Cowen and is not enamoured with O Domhnaill. His high profile pension travails won’t have helped his mood. If he doesn’t pull his weight, the combined opposition vote could elect Doherty.

In Dublin South, Senator Maria Corrigan is likely to get the nod ahead of defeated candidate Shay Brennan. FG is still licking its wounds over the Lee fiasco. Everything seems ready-made for Senator Alex White to be victorious. He has laboured on the ground as a councillor and senator. He would have won but for the George Lee tsunami. He is local, likeable and looks an assured winner.

In all three constituencies the Green party will not be a relevant factor.

Some Government sources, in dismissing the requirement to hold these contests, have suggested the method of filling Dáil vacancies should be reformed. The abolition of by-elections has been advocated. Various options have been advanced: filling the seat by co-option; selecting the next remaining candidate from the results of the last general election, or the system in Malta where they go back over the ballot papers of the person causing the vacancy to see what their next preference was.

All these are removed from reality. These undemocratic attempts to avoid the people’s verdict should be resisted with a fixed time limit for the holding of all such contests.

The present Dáil arithmetic indicates the Government has a majority of five. There is the possibility of the restoration of the whip to independent TD Finian McGrath. The loss of these three seats could make the Government more vulnerable to individual Fianna Fáil TDs defecting on a local issue. Three defeats would undermine their democratic mandate, coming after the disastrous Euro and local elections.

The Government’s exclusive political strategy is to cling on until June 2012. This is paralysing our politics. The Greens seem to have concluded they are on a one-way ticket, won’t have a return flight into the next Dáil, and so want the pleasure of power to last.

One of the most striking features of government from within is the extent to which the entire public service management and apparatus perceive themselves and act as part of the incumbent government. Senior civil servants, bosses of state organisations and political appointees to boards are fiercely loyal to their contemporary political masters.

They do not speak out of turn, embarrass or undermine government credibility. This is especially so with 13 years of continuous power. It is this context that troubles me most in analysing the latest missive from UCD’s professor of economics, Morgan Kelly.

He advances an updated analysis of the state guarantee of September 2008, subsequent bank bailout and NAMA. He calculates the ultimate net losses arising out of our financial services sector. He works through the impairment of all bad loans. He estimates the final loss on €100bn property loans will be a minimum of one-third.

THE €35bn of business loans will be subject to a 20% loss, while the €140bn of mortgage loans and €20bn of personal lending is likely to yield a minimum default of 5%. He concludes that €50bn (best case scenario), or more probably €70bn, will be lost by Irish banks across their entire loan book. The way our bank guarantee is structured, this will be added to our national debt, so that by 2012 it will amount to 115% of GDP – the worst in the Euro zone.

His colourful, stark language describes the Irish economy as bleeding with gunshot wounds. His ultimate conclusion is: the state support for banking will sink our sovereign finances; it is not a question of whether Ireland will go bust, but when, and we should now actively negotiate with bank bondholders to restructure these banking liabilities.

The response from the Department of Finance was even more worrying than the original assertions. Alarmingly, they did not dispute his figures. Instead, they went for the alibis of what superb people Matthew Elderfield and Patrick Honohan were, relying on their credibility and credentials to reassure us all.

Who are we to believe? Could it be that the cornerstone of Cowen’s strategy – their response to the financial crisis – may be even more flawed than the mistakes made during the boom?

No one in the wider circle of government machinery is going to bell the cat. They are all cheerleaders for NAMA and the ‘no alternative’ script. These ‘soft landing’ merchants accepted that mantra without question. It’s time the people spoke.

More in this section


Select your favourite newsletters and get the best of Irish Examiner delivered to your inbox

Execution Time: 0.201 s