Merchants of gloom think we're still living in the past
Ireland is better placed today to weather current political crises, says Willie O'Dea
Sunday July 20 2008
It is no harm to reflect on how any one of the Irish Governments from the Eighties would have been overwhelmed with gratitude to be confronted with the problems we face today rather than the ones they had.
When I entered the Dail in February 1982 the two biggest political issues besetting the country were the perilous state of the economy and the ongoing violence in the North.
The future looked particularly dismal on the economic front. There was zero economic growth and record levels of deficit spending (8.5 per cent at one stage). We were cursed with huge levels of long-term unemployment and mass forced emigration.
In Northern Ireland the future looked equally bleak. The hunger strikes had just ended the year before and there was no sign of political agreement.
Violence in Northern Ireland continued to dominate the nightly news. In 1982 there were two major atrocities, with 11 British soldiers killed in IRA bomb attacks in Regent's Park and Hyde Park Barracks in London, and 17 people killed by an INLA bomb at the Dropping Well Bar in Derry.
My purpose in referring back to the Eighties is not to understate or underestimate the size of the challenges facing us. The difficulties we face on the economic front and in addressing the consequences of our 'No' vote to Lisbon are considerable.
They will require considered and sustained responses -- but dealing with them successfully is well within our capacity.
As I have stated here before, managing the developing political situation arising from the Lisbon Treaty result is going to take all our negotiation and diplomatic skills and the store of goodwill we have developed over our 35 years of EU membership.
It is also going to take time.
The visit of President Sarkozy tomorrow is an important early step in that process. He comes here as the Government starts its examination of the consequences and the way ahead.
As we have seen over the past weeks there is no shortage of trite views as to how things may proceed. However, none of them stands up to any scrutiny.
While some may express how they would wish things to be, the fact is that no one has come to any informed conclusions as to how the situation will evolve. We are still at the early stages.
It is important that we all listen to what is being said and not jump to ad-hoc assumptions.
While we need to take time on Lisbon, we do not have that facility when dealing with fallout of the world economic slump. That is why the right corrective action is being taken now.
Despite the negative short-term forecast, the growth and progress of the past decade means our economy is robust and ready to emerge from the current difficulties in solid shape.
The downturn is certainly not unique to us. It is worldwide -- and it is affecting everyone.
The situation with our two major trading partners -- the UK and the USA -- is particularly bleak. In fact, the fall in the value of the dollar and sterling, against the euro, has been the major factor in the erosion of Ireland's competitiveness.
In Germany, unemployment has risen and retail sales have fallen for three months in a row. In Portugal, GDP fell in two of the last three quarters. Denmark is in recession, while the property markets in both France and Spain are enduring turbulent times.
As I have stated, here is a good analogy for the problem facing the economy at present: it is like the fate of a shop beside a large factory.
When the factory starts laying off staff and cutting back on production it has a knock-on effect for the shopkeeper's household.
Notwithstanding the shopkeeper's ingenuity, they cannot start budgeting for second holidays or shop improvements until the factory picks up. The factory does not look like it will start taking on more staff and picking up production for another year or so.
The coming months will be difficult. Saying that we have faced worse is meagre consolation in the face of increasing oil and food prices. But there is an important difference.
Back in the Eighties there was no sign of hope. Today, we know that the saving and controls we are making now will yield benefits for the years ahead.
Willie O'Dea is Minister for Defence and Fianna Fail TD for Limerick East
- Willie O'Dea
