News Politics

Wednesday 21 August 2019

John Downing: 'Central Bank wobble raises questions about Leo's loyalty to Paschal'


Tea run: Paschal Donohoe supporting Leo Varadkar in his campaign for Taoiseach in 2017. Photo: Naoise Culhane
Tea run: Paschal Donohoe supporting Leo Varadkar in his campaign for Taoiseach in 2017. Photo: Naoise Culhane
John Downing

John Downing

Twelve days and counting between now and Dáil holidays. And Leo Varadkar has had one eye on those Leinster House gates for some time.

He certainly will not be sorry to see June going off the calendar in two days' time because it has been a pretty gruelling month for himself and his Cabinet colleagues. The row over the appointment of Central Bank governor designate Gabriel Makhlouf can be deemed "unfortunate" given the appointment timing and controversial news about him coming out in New Zealand soon after.

Finance Minister Paschal Donohoe said news of Mr Makhlouf's poor handling of the leaking of government information would not change the Irish decision to give him the job. Mr Donohoe effectively said if it backfired, he would take his own share of blame. But the Taoiseach's comments on the issue were far less clear-cut - suggesting the new bank boss should make a statement about the controversy.

The fallout from the other side of the globe could yet have repercussions for the Government. It looks as if the tin hat on a series of tough events.

Those comments may of themselves raise questions about the Taoiseach's loyalty to a potential rival for his own job, who passed up the chance two years ago, and even helped launch a successful leadership campaign by Mr Varadkar.

June woes began with local and European election inquests. The outcome was not bad for Fine Gael as a party of government, with an overall gain of 20 council seats, and a stellar European Parliament outcome with five seats won due to the high calibre of candidates, like Seán Kelly and Mairead McGuinness. But the result was marred by ill-judged predictions of gaining 50 council seats at the outset, and the knowledge that up to 50 other seats were lost by very narrow margins.

Cue the Taoiseach's admission that the "Maria Bailey factor" was being raised on the doorsteps to Fine Gael canvassers in many parts of the country. The issue is now the subject of an internal inquiry led by a barrister. But it dovetailed with ongoing stories of "compensation culture" feeding insurance premiums, which in turn cost jobs and hit community activities like local summer festivals.

Fianna Fáil had a poor Euro election, but stayed ahead of Fine Gael in the locals - seen as a truer portent of upcoming Dáil contests. Perhaps of greater concern is Fianna Fáil's revival in Dublin and its subsequent ability to forge council alliances with the Greens, Labour, Social Democrats and Independents.

True, local alliances are easier to make than national ones. But in a scenario where Fine Gael and Fianna Fáil may again be only a few Dáil seats apart next time, the ability to do coalition deals will very probably decide who gets the keys to Government Buildings.

June was also all about the economy with predictions of another annual hefty health spending over-run; further budget problems with the new children's hospital budget; a simmering row about home-help waiting lists; and a potentially bitter pay dispute by 10,000 health support staff.

The Government got a big yellow card from the Irish Fiscal Advisory Council that spending over-runs were again a threat. Mr Donohoe signalled two potential Budget plans for October 8 next - one if there is a reasonable Brexit and the other for a doomsday no-deal Brexit.

There was better news of continuing Brexit solidarity with Ireland at an EU leaders' summit on June 20. But there were also many unanswered questions about the need for food and animal health checks at the Irish Border if there is a no-deal Brexit. The Taoiseach said there must be "more conversations" about this.

Mr Varadkar will hope for better political weather in July. But much will depend on the winds from London.

Irish Independent

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