Wednesday 7 December 2016

Maeve Dineen: Cost of electoral promises will be measured at EU summit

Maeve Dineen

Published 21/02/2011 | 05:00

Shaped by the deepest recession in living memory, dominated so far by rows over IMF interest rates and which party's economic plans will cost families the most, the battle for political power in Ireland in 2011 is living proof that elections are still won and lost on the economy.

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But for all the change that this country wants and needs, this has been a conventional election campaign in many ways. The usual posters hanging from every lamp post, the mud-slinging about stealth taxes, the usual posturing about who is the better nationalist and the usual easy promises to save money by tackling fraud and the like are part and parcel of this and previous elections.

Despite the fact that the IMF/EU are dictating the country's every financial move, the main political parties continue to dot all the i's and cross all the t's in their whimsical plans for fixing the public finances.

Just one of the many misnomers being touted by the political parties is their intention to use money from the much-raided National Pension Reserve Fund (NPRF) to support the creation of (tick the appropriate box): 1. Jobs; 2. A new bank; 3. Better insulation for homes.

Not once have any of the parties mentioned that any money taken from the NPRF for capital expenditure will be added to the national deficit -- a deficit that ironically they have all committed to reducing by €9bn over four or six years.

The only hope is that rather than breaking the mould, this is the last of the old-style fantasy elections that have brought this country to its knees. Both Fine Gael and Labour have agreed with the IMF's demands and accepted that they must create some sort of council of fiscal responsibility to end the fairy tales we have been spun over the last number of elections and while parties have been in power.

It is completely unacceptable that, at this pivotal juncture in our nation's history, we are still being asked to vote for the sort of uncosted election plans we're being presented with at the moment.

It's worth remembering that poor planning and poor costing got us into this situation in the first place. It is idle to believe that the same failings can get us out of this mess.

Ask a straightforward economic question to any of our politicians and there isn't a coherent answer. There can only be one reason for this: the scale of the crisis we find ourselves in isn't appreciated or understood by our politicians, and that is what's most worrying.

Perhaps this matters most with Fine Gael, the party that will either constitute the next government or at least be the dominant partner. It has made a better job than its rivals of costing its plans but there is still scant detail about growth assumptions, how the party will achieve its savings through public sector reform and its plans for the health service.

The next government -- and its finance minister -- will have to hit the ground running. A critical EU summit takes place in March and by the end of that month we must sign off on our first-quarter IMF targets while at the same sorting out the final tally for losses and capital requirements at the Irish banks.

Much rides on this summit.

When FG/Labour insist they can renegotiate the EU/IMF interest rate and save our 12.5pc corporation tax, you need to know that they are perpetrating the most dastardly trick in politics: telling the truth. They really do not have a Plan B.

When they speak of their determination to tell the president of the European Central bank Jean-Claude Trichet what to do, they absolutely mean it -- but do they really know what they are dealing with or what is coming down the tracks?

For months, markets and policy-makers from Wall Street to Frankfurt have been begging EU leaders to do something -- anything -- to address the short-term needs of struggling, debt-laden countries on the periphery of the eurozone.

Instead, Europe's presidents and prime ministers have proposed plan after plan to deal with the continent's problems.

The European Union is not the place to get anything done quickly, but something will have to happen at the March summit. It has to if Portugal is to be saved from a bailout and further contagion is to prevented.

This will be no photocall for Kenny. This will be the real deal and will show us very early on what the new government can really achieve and what was just wishful thinking.

Irish Independent

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