Friday 24 March 2017

Sam Smyth: Huge battle on economic front puts policy gap in perspective

Sam Smyth

TRYING to sell a coalition deal to Labour Party members emboldened by record election gains may well be a harder nut to crack than agreeing a programme for government.

Most Fine Gael frontbenchers believe a deal can be sealed in jig time -- but their opposite numbers in Labour are more reticent to share a ministerial Mercedes.

The issues that had them slugging it out on the campaign trail have become more manageable, according to sources in both parties. Fine Gael says differences over the Croke Park Agreement can be resolved.

And the new reality in the EU that the interest rates on the bailout must fall takes the sting out of the spending cuts-versus-tax argument for reducing the budget deficit.

During the election campaign, Eamon Gilmore said any reduction in child benefit was a deal-breaker. But Fine Gael believes there can be compromise on social welfare.

Public sector reform, water charges, differences on pensions can all be sorted out by an attitude of "where there's a will, there's a way", a senior Fine Gaeler said last night.

There are other differences, of course, but when the State is fighting for its economic sovereignty, what seemed like enormous differences a month ago can be more easily resolved.

Even as votes are being recounted, the pain of the election has been anaesthetised by the prospect of power.

Enda Kenny's trips to meet German Chancellor Angela Merkel and European Commission president Jose Manuel Barroso to stress the problems caused by the punitive interest rates paid dividends.

Mr Barroso assured Mr Kenny and his party that the EU elite would be following the election campaign closely -- and from that they realised interest rates had to be cut.

And while it doesn't sort out the banks, it will make sharing office easier for the government partners. The banks threaten further calamity in the coming weeks, but dealing with it will not cause a major rift between the coalition partners.

Michael Noonan will lead Alan Shatter and Phil Hogan to meet Brendan Howlin, Joan Burton and Pat Rabbitte to negotiate a coalition.

The first big hurdle will be allocating cabinet seats: Labour wants six seats with Fine Gael taking nine; Fine Gael wants 10 seats with Labour taking five. The smart money is on Fine Gael's 70-something seats shouting louder than the Labour Party's 30-something seats.

The Rainbow Coalition in the 1990s came up with the 'Super Junior', where a minister of state can attend cabinet. And an imaginative distribution of the spoils of winning an election will ease other tensions.

The leadership of the Labour Party is no less enthusiastic than Fine Gael about a coalition -- just more anxious that their members don't get the idea that FG has outsmarted them. It appears more of a presentation and public relations difficulty than an insurmountable problem concerning core values.

Forensic examination reveals more get-out clauses in the fine print of both parties' manifestos than non-negotiable core principles.

Both parties will admit privately that many of the differences they paraded so publicly in the campaign had more to do with getting elected than drawing lines in the sand.

A deal is expected to be put to a special conference of the Labour Party for approval in Dublin on Sunday.

Irish Independent

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