Calling it a bailout was never a good idea as it was anything but a bailout.
The loans provided by the European Union, European Central Bank and the International Monetary Fund to the Irish Government had two main purposes: to keep the Euro currency alive and to allow Ireland to repay French and German banks and bond-holders who were owed billions by the bankrupt Irish banks. The fact that the Irish Government needed the cash to meet the wage-bill of the ridiculous numbers of public and civil servants employed by this tiny country was very much incidental. The EU/EBC/IMF had their own agenda.
But now they are gone.
Ireland has again taken control of raising its own finances and regained its ‘economic sovereignty’ amid much fanfare and self-congratulation. Ratings Agency Moody’s has added to the positive tone in Ireland by upgrading Irish 10-year debt bonds to ‘investment grade’ and as a result the cost of borrowing by the Irish Government has dropped dramatically from over 12% at the depth of the financial crisis to a much healthier 3.3% today. By comparison the US and UK borrow at about 2.8% while Germany borrows at 1.65%, Portugal at 5% and Greece at 8.5%.
Should the Irish economy recover and unemployment fall then this will be seen as a very significant turning point in recent Irish history. Fine Gael will claim the credit for steering the country through its darkest ever economic moments having implemented the Fianna Fail plan for recovery that they inherited, despite lambasting that same plan in the run up to the last General Election.
With the economy pointed in the right direction Fine Gael will expect to be rewarded by the Irish people with a second term in office. Despite being not quite half way through its five year term with the next General Election not due until 2016, the analysts in Fine Gael will surely be eyeing up the very best moment to ‘go to the people’, likely next year in 2015.
Of course a year is an eternity in politics and it is not out of the question that a fickle Irish electorate could yet punish Fine Gael for its failures, perceived or otherwise. Lack of political reform, controversial social policies and the never-ending implementation of the economics of austerity may yet come back to haunt the party.
For the time being Fine Gael are enjoying their time in office with the latest numbers from the opinion polls supporting their optimism:
Fine Gael: 30%
Fianna Fail: 26%
Sinn Fein: 16%
Labour: 12%
Others/Independents: 16%
This survey suggests a return by vast groups of voters to the more mainstream political parties and away from independents and fringe groups. Even the Labour Party managed to increase its support although it is still in a very poor position. Looking at the numbers above, surely a grand coalition of Fine Gael and Fianna Fail is only a matter of time?
by Michael Green
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Michael Green is Manager of The Information about Ireland Site
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