News Analysis

Sunday 31 August 2014

John Downing: Kenny's toughest task now will be convincing us this is a good deal

Published 08/02/2013 | 04:00

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The lights stayed on late in Leinster House as the debate took place into the legislation to allow a deal on promissory notes. The ECB is likely to hamper Enda Kenny’s efforts to portray the deal as a victory

WITH apologies to the gospel writer Matthew, we can say: "Let this Anglo bank debt be upon our children and our children's children."

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In less biblical terms, this is about paying less interest for now and allowing the rising generations to worry about repaying the principal between 2038 and 2054. After all, Enda Kenny and his colleagues will not be asking too many of today's young children to vote for them – they will definitely never be canvassing anyone's children's children.

More immediately – from yesterday afternoon, in fact – Mr Kenny began the battle of his political career which will make or break his term as Taoiseach. The timing also strongly suggests the Taoiseach's "lucky general" tag may well be holding.

The news from Frankfurt overshadowed the total hash he made of handling the Magdalene Laundries controversy this week. Mr Kenny's terminal indecision, leading him to wait a fortnight for his next move, had enraged Labour TDs, irked his own backbenchers and delighted the opposition.

The first task now for Mr Kenny and his colleagues is to convince a sceptical Irish public that yesterday's deal from Frankfurt is in fact a good deal for Irish taxpayers. The easier part here is facing down a wall of Irish critics determinedly running the "children's children" arguments about illegal and immoral private debt being heaped on the taxpayer.

But it is also likely that the Kenny sales effort may be hampered by the European Central Bank, and leading EU governments such as Germany's, feeling obliged to downplay the terms of the Irish deal for their own political purposes. The nervous few moments before ECB president Mario Draghi's technocratic words could be decoded yesterday afternoon gave us a foretaste of this.

The second and more difficult task for Mr Kenny will be using the very slender scope afforded by this deal to ease austerity and give some spark of economic revival to a very despondent Irish population.

The minority of Irish people with money must be encouraged to spend, and the taxpayer-funded banks must be battered into lending again. The new cars that were not bought last month spoke more to this despondency than an encouraging pre-Christmas flurry in the shops.

All that said, there was a buzz about Leinster House over the past 36 hours as TDs and senators stayed through the night to push through emergency legislation ending IBRC/Anglo Irish Bank early yesterday.

Just before lunchtime, word trickled through that a deal was done in Frankfurt and government backbenchers walked with a spring in their step for the first time in a very long while.

The news brought some result to a campaign which risked becoming a "phony war" and was of two years' duration. In the February 2011 general election, Enda Kenny and his colleagues promised they could cut better deals on crippling debt.

It has been a long and difficult two years, with many apparent false dawns.

In recent weeks, Mr Kenny's and other ministers' words about how well our position was understood in EU institutions and across the capitals were beginning to grate. The Taoiseach was overloaded with sympathy and support, but very light on practical results.

More bullish statements by him, such as the one on RTE radio on January 13 when he refused to contemplate defeat, at times looked like coming back to haunt him. The increasingly strident warnings from his Labour colleagues were a further complication.

By yesterday, critics of Labour were saying that they pumped the volume in the prior knowledge of an imminent result which they could then claim was in large part due to their playing hardball. That judgment may be unduly cynical.

At all events, Labour needed this deal badly. Harking back to Eamon Gilmore's botched general election mantra, it is still "Frankfurt's way" rather than "Labour's way", but this deal is a boon for them also.

From what we know of Irish political culture, it is a safe bet that leaving debt to future generations is unlikely to cost votes in the June 2014 local council and European Parliament elections.

Both Fine Gael and Labour are now planning efforts to avoid a mauling in those polls.

Irish Independent

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