Irish Examiner editorial comment: FG/Labour deal - Compromise is the name of the game

POLITICS they say is the art of compromise.

So, nobody should be surprised that compromise is the central tread of the Programme for Government produced by Fine Gael and Labour.

Despite having a huge majority in Dáil Éireann, the bitter irony of being forced to wear a tailor-made strait-jacket, hand-stitched in advance by Fianna Fáil, has made compromise the inevitable outcome of negotiations during the past week.

In political terms, the formation of what is in effect a national government, combining the largest and second biggest parties in the state, meant there was no question of the programme being rejected at yesterday’s parliamentary party meetings, even though hardline Labour members would be happier on the opposition benches.

Once the honeymoon period is over it will not be easy to hold together a coalition of right and left-wing politicians, especially with Labour looking over both shoulders at a new and vociferous grouping of committed left-wingers in the Dáil.

The bottom line throughout the negotiations was that the talks were held under the looming shadow of the austerity plan imposed by the outgoing FF-Green coalition, the IMF, the European Central Bank and EU Commission, an accord which can’t be jettisoned just like that. However, the draconian nature of a deal that is forcing the taxpayer to bail out the profligate banks makes it imperative that the new Government should press Europe for a reduction of the penal interest rates.

That promises to be the first serious test of incoming Taoiseach Enda Kenny’s mettle. There should be no question of kowtowing to Europe.

In spite of loud election promises to radically overhaul the system of governance, the sense of compromise running through the programme has already resulted in yet another Irish solution to an Irish problem.

When it came down to the thorny question of doling out key ministries, so intense was the competition between Fine Gael and Labour for Finance that the solution found by negotiators was to split the department into two ministries, one covering tax and fiscal planning and the other dealing with public sector reform. Given the importance of addressing both the fiscal crisis and of overhauling the public service, the division makes sense.

Significantly, the dual operation will be overseen by a new Economic Council drawn from within cabinet. It will be made up of the Taoiseach, Tánaiste, and both relevant ministers, most likely to be Fine Gael’s Michael Noonan, who will have responsibility for finance and taxation, and Labour’s Joan Burton, expected to be appointed Minister for Public Expenditure and Reform.

Every macro-economic decision will be taken by the four members of the council. On the face of it, this is a sound initiative because it should mean greater coherence and more open communication in the day-to-day business of cabinet, qualities lacking in the last administration. Not only was the Green Party kept in the dark, when it came to bringing in the IMF it was clear a number of Fianna Fáil ministers did not know what was going on. If the members of the council get it wrong they have to carry the can, sharing culpability and accountability in a transparent and above board manner.

Further compromise is evident in the target date for reducing the deficit to 3% of GDP. Fine Gael had set 2014, as opposed to Labour’s deadline of 2016. The compromise is 2015, a date already offered by the EU.

There is also compromise in the area of public sector jobs. Fine Gael was aiming at 30,000 voluntary redundancies while the Labour wanted 18,000. Under the agreed policy, the government will seek between 18,000 and 21,000 redundancies for first two years, with scope for a further 5,000 thereafter.

In the equally controversial area of the health service, the Fine Gael plan was to privatise the system along the lines of the Dutch model. What they are now saying is they will introduce Universal Health Insurance which is acceptable to both parties. Ultimately, they will abolish the HSE over time — but certainly not overnight.

In spite of being hidebound, Fine Gael and Labour have produced some imaginative and ambitious measures. And yet, the mood music surrounding negotiations hinted at a distinct lack of aggression between the two sides. As a result, the language of the Programme for Government is predictably aspirational and woolly.

With many policy issues subject to review rather than being copper-fastened, it is hard to avoid the impression that problems are being kicked down the road, including the Universal Insurance Charge and funding of third-level education.

As always the proof of the pudding will be in the eating.

Fine Gael promised change in 100 days. A jaundiced public will need to see change to buy it.