Wednesday 17 December 2014

Flannery was right, the government fight back must begin

Brian Hayes

Published 30/07/2014 | 02:30

Michael Noonan
Michael Noonan

I remember Michael Noonan telling me once that Europe is a bit like the Mississippi, in that it just keeps rolling along. Decisions take time in Europe and sometimes you just have to wait and pick your moments.

As a country we've has to pick our way through the last five years with a constant re negotiation with those who bailed us out. Trying at every remove to improve terms and conditions that were badly negotiated and badly imposed at the end of 2010. That's why the latest idea to refinance part of the IMF loan, with EU agreement, is just another clever move from a Finance minister who understands better then most how the Mississippi works.

In the last 48 hours it's been good news all round and the prospect that the adjustment for the 2015 budget will be lower then € 2billion euro. But by the far the most important news for a small open economy like Ireland, is that the UK is doing really well and the Germans are at last considering wage price inflation.

A bit of inflation can a go a long way in provoking domestic demand and lifting the euro zone economy. Peter Praet, the ECB chief economist, yesterday supported Germany's bundersbank in appealing for higher wages. That's good news for us. In case you forgot ,the man responsible for managing our debt, John Corrigan of the NTMA, also told us that 90% of the amount needed to borrow this year had been achieved in the first six months, at record low rates. Not bad for a country that was insolvent four years ago.

Will any of this make any difference to the political fortunes of the government? The short answer is that if people hold their nerve and fight back, of course it will.

Since the beginning of the year the government appeared to have lost its way as political miss steps and fumbles undermined confidence. A very bad election result for both government parties in May demanded a response.

The recent reshuffle is a clear acknowledgment that mistakes have been made. The Taoiseach and newly appointed Tanaiste have now set out their stall and put in place a team capable of delivering a second term.

But changing the view of the government amongst the general public is quite another. Mid-term elections always have a habit of kicking government parties in the ballot box. As TDs start to focus on 2016, a new electoral dynamic takes over.

The electorate is still volatile and there to be convinced. The government fight back must now begin with a robust campaigning approach. That's something that Frank Flannery recently spoke about and he is absolutely right.

Three things need to happen quickly. First the stability and cohesion of the government between now and 2016 must be maintained. Staying the course and staying together, sends out a strong signal to the country .More importantly both parties must show that they want to continue the work of recovery into a second term. Whatever about campaigning as independent parties come the next election, winning a second term together has to be a strong part of this new narrative. That's best done by staying the course.

Secondly all Ministers must be prepared to defend the government and take the fight to the opposition.. Too often Ministers ran for cover as backbenchers were relied upon to fill media slots.

Thirdly if this new government are serious about winning in two years, they must be prepared to confront the opposition. Sinn Fein have literally got away with murder on their portrayal that there was some alternative to cuts in public expenditure. Inevitably as we get closer to the election the spotlight will focus on the economic credibility of both SF and Fianna Fail. That´s the Government's trump card. That credibility has been hard won at home and abroad.

The public will support difficult decisions if they see that those decision are being implemented in a competent and fair way.

Brian Hayes is MEP for Dublin.

Irish Independent

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