Fianna Fail meltdown fears over IMF arrival
But Cowen rejects opposition calls to quit
SHELL-SHOCKED Fianna Fail ministers and TDs last night admitted they feared the arrival of the International Monetary Fund (IMF) has put the future of the party in jeopardy and pushed as many as 40 deputies past the point of rescue in the next General Election.
The damage to Taoiseach Brian Cowen’s waning credibility by his bizarre denials of any bailout has convinced some party figures that Fianna Fail “couldn’t possibly go into an election with him as leader”. And squabbling within the Cabinet has raised doubts over the Government’s ability to pass the Budget without opposition support – particularly from Fine Gael.
Fianna Fail sources revealed there had been a “collapse of morale”, and they predicted the damage to the party could take an entire generation to repair. Where Fianna Fail figures used to believe the party would recover before the election, there are now genuine concerns of a loss of 40 seats in an unprecedented voter backlash.
Such is the extent of despair within the ranks that previously loyal TDs are now considering retiring at the next General Election to avoid the feared cull in Fianna Fail seats at the ballot box. Mr Cowen yesterday dismissed calls for his resignation as government numbercrunchers finalised a drastic plan for €15bn savings.
After the first day of formal bailout talks in Dublin, a 150- page, four-year rescue package was being put to the test by an emergency IMF mission from Brussels and Washington. But as the IMF and European Union delegation inspected the State's financial black hole, Mr Cowen faced deepening anger from the opposition – and from within the ranks of his own party. “The Government has a job to do here.
We have a four-year plan that we are finalising, which we are required to do,” Mr Cowen said. The draconian 2014 Budget road map is expected to be published on Monday or Tuesday, with significant reforms to the tax system and new levies in property and water on the cards along with plans to cut social welfare payments. But ministers have taken a hard line with the sacred cow of corporation tax and insisted the low 12.5pc rate is non-negotiable.
The sale or putting up as collateral of semi-state assets may be on the table in the talks with the IMF, which will continue over the weekend. This development would mean the ESB, Bord Gais or the licence for the National Lottery being sold off. It came as AIB's dependence on last-resort central bank money shot up by more than €10bn in the last four-and-ahalf months, as €12bn of the bank's deposits walked.
The figures, revealed yesterday, mean Ireland's three quoted banks have upped their reliance on central bank funds by more than €30bn since June, according to analysis from stockbrokers Davy's. Meanwhile, one government minister believes anybody but Mr Cowen will have to lead Fianna Fail into a general election; while another spoke of “raw anger” and disillusion in the party.
And Fianna Fail’s chances of winning the Donegal South- West by election are being written off completely by senior figures within the party. Furthermore, Mr Cowen’s prospects in a general election campaign are not looked upon favourably either by many in the party – but the current crisis means there’s no heave in sight. “You couldn’t possibly go in to an election with him as leader.
His performance on the six o’clock news was worse than the ‘Morning Ireland’ interview. He was incoherent, testy and ill at ease. Pretty much any of them – Ahern, Lenihan, Hanafin, Martin, whichever – would be better than what we’ve got,” a minister said. Mr Cowen is, however, in no immediate danger of losing the leadership of Fianna Fail and the Government – with the bailout, four-year plan and Budget all to be resolved before Christmas.
A junior minister said there was “raw anger, fright and fear” in Fianna Fail over the devastating blow the IMF’s arrival has dealt to the party. “People are really rattled and disillusioned at this stage. What has really annoyed people is the three days of lies. Morale has absolutely collapsed.
There’s no sense so far of any major heave as they are just shocked. But people are asking, is there a future for the party? If we do (have a future), it’ll be 15 to 20 years before we’re back,” the source said. Meanwhile, Labour may not be the only beneficiary from Fianna Fail’s expected decline as there is a growing view that hard-left politicians will also garner support.
And there is a belief within both Fianna Fail and Fine Gael that a swing toward the hardleft groups of Sinn Fein, socialists and independents could elect anything up to 20 TDs – rather than all the gains going to the Labour Party.