Irish politics faces tough path

There are two key currents capable of undermining our recovery, says Gerard Howlin

IT REALLY depends on how old you are. The last time it happened was in the 1980s. I was a student then. The national joke was asking the last one leaving to please turn the lights off.

Gay Byrne, still holding off whippersnappers like Pat Kenny, ignited a rumpus by suggesting that we should hand the country back to the queen of England with a letter of apology for the state it was in. And the country was in a state. At its worst in 1988 about 70,000 young Irish people were emigrating. Of the 40 or so in my class only three or four stayed at home.

The politics of stagnation are not new. But the challenges and the circumstances now, are entirely different to what they were then.

This time the bust is much more complex than the indebtedness of the ’80s. It is a national fiscal crisis and banking crisis in an international crash. Chronic instability in the eurozone is both a symptom of these connected crises and the result of its own design flaws. Voting yes on May 31 will be one step towards arresting the instability of the currency. While imperative, there is no assurance it will be enough.

Irish politics faces an unprecedented challenge. There is a danger that we are only in the early stages of a generation of stagnation.

Underlying this crisis are at least two key currents capable of undermining our prospects of recovery indefinitely.

Firstly, there is a long-term accumulation of lifestyle underpinned by levels of unsustainable public expenditure. Much is made of the crisis of capitalism. But the crisis of capitalism is a crisis of European social democracy. An aging population producing fewer children cannot sustain levels of expenditure and entitlement designed to be enjoyed over a shorter lifespan and supported by a greater ratio of workers to dependents.

True Ireland has the highest EU birth rate and has sustainable levels of population replacement at 17 births per 1000. At the opposite end of life, life expectancy at birth in the EU-27 increased over the last 50 years by about 10 years. That is a staggering affirmation of rising standards of living.

But in Western Europe, it’s based on declining demographics and unaffordable social and lifestyle supports. Rising life expectancy and declining birth rates is the demographic equivalent of boom and bust.

The implications are clear. Were we never to have experienced the circumstances that made the Irish bust worse than it might have been, we would still have unsustainable levels of public expenditure.

Ireland, because of the particular circumstances of its banking crisis, is an acute but far from unique example of a wider European malaise. In the end recapitalising the banks may be easier than repopulating the continent.

The quandary for European social democracy arrived as the moment the crisis of capitalism exploded. The great achievement of the Reagan-Thatcher years was globalisation.

Globalisation had its flaws. The greatest was the inability of governments to keep pace and regulate appropriately. As the world economy globalised, so too did political power, except more slowly and less effectively. The EU has been playing catch-up since this crisis began four years ago. The fundamental problem is that politics is embedded at the national level.

The processes that might affect the right policies are at the supra-national level. The economic challenge is empowering the inter-governmental and the supra-national fast enough to keep pace with developments. The political challenge is legitimising that process. The emerging and ultimate crisis is one of democratic accountability.

It is too soon to say if this is a crisis of terminal decline for Europe or one that will inspire transformative change. The model of national politics we have became accustomed to is broken.

The innovation required now is a political reformation nationally and across the continent. Countries and local communities have to be effectively connected to decision-making. If the will is to be found to address issues of debt and of deficits, the democratic deficit will have to be plugged. Ironically the unique fact of our referendum may indicate that the crisis of accountability in Ireland, if real, is not as acute as elsewhere.


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