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James Downey: Cabinet support for zombie banks is devoid of any logic


OWNERS of domestic pets are sometimes said to come to resemble the animals they cherish. In the relationship between Fianna Fail and the Greens, it's the other way round.

The Greens lost the argument with their coalition partners over the arrangements for the inquiry into the banking collapse. But you wouldn't know that from listening to John Gormley. He has defended the outcome of the argument eloquently, or at any rate volubly. He sounded like . . . like . . . well, exactly like a Fianna Fail minister.

Now it isn't my intention here to go into the arrangements, the timescale, the questions that must be asked and answered, or the likely outcome. This and other newspapers have done all that at greater length and with much greater expertise. I want to ask just one question.

Where is the logic in the plans for Anglo Irish Bank?

The Government, it seems, plans to keep this institution in business at unknown, but certainly vast, cost to the taxpayers. Apparently it believes that at some future date Anglo can earn its keep.

I don't know what evidence it has to this effect. I don't know if it sees Anglo in its former role as a lending machine for property developers or a retail institution like the good old building societies, or something else. And I don't know whether it would cost more, or less, or much the same to let Anglo go to the wall.

But presumably it has some reason for keeping this bank alive. If so, it should tell us the reason.

Or maybe the banking inquiry will tell us the reason? I am not clear on whether this will come within the inquiry's remit. On the evidence of the judicial tribunals, the Great and Good who will do the investigating may spread their net very widely and cover matters that are not directly within their remit.

If, however, the inquiry sticks closely to its brief, it looks likely that it will tell us a great many things that we already know, and few if any things that we don't know. And that will suit the Government very well.

Not only because, with any luck, the proceedings will spin out beyond the date of the next general election -- though the opposition parties have quite rightly made this point. The longer the process, the more inconclusive the result, the harder for any alternative government to change course; and the easier for Fianna Fail to come close to pulling off a trick of which they became masters under the reign of Bertie Ahern.

I have written more than once about their ability to make the political and economic cycles coincide to their advantage. Pat Leahy, in his excellent recent book on Fianna Fail in power, aptly called it "squeezing" them together. I think the squeeze is on again.

To be sure, they can't make an election take place during a boom for which they claim credit. There isn't any boom, and there isn't going to be any boom. Even the most optimistic forecasts, which we saw this week, predict no such thing. They talk of two years of 5pc growth, followed by a period of "boring" 3pc growth.

Most of us would say, if this is boredom let's have it. We would be delighted with 3pc, to say nothing of 5pc: so delighted that we could forget, or be prepared to ignore, the low base from which the growth takes place, the terrible knocks we have suffered already, and the further knocks that will hit us before the growth happens.

True, the public anger, based on the unpleasant experiences of just about every citizen, is such that no matter how long the present government lasts, even if it survives, Bertie-style, until the very end of its term, Fianna Fail can hardly expect to win a general election. But they may just manage to hold it at a time when things are visibly getting better. And some of the more far-sighted among them have looked beyond the election.

Several months ago, a former minister painted an intriguing scenario for me. He envisaged a series of events in which a Fine Gael-Labour coalition takes office, only to be replaced speedily by a Fianna Fail government, which in turn falls with equal speed. "Like the early 1980s," he commented cheerfully.

Heaven save us from a repeat of the 1980s! But could it happen? Yes, unless Fine Gael and Labour can resolve their differences (at present seemingly formidable, but perhaps they look more formidable than they really are) and unless the forecasts come true, enabling them, instead of Fianna Fail, to profit from a favourable turn in the economic cycle.

In the meantime, almost everything seems to be going according to the Fianna Fail plan, if you can call it a plan.

The banking system, with or without Anglo, starts working again. Lending resumes. The construction industry revives. A new housing bubble comes into prospect. Never mind about the 300,000 unoccupied dwellings. Never mind that we have no money to employ people to repair the impassable back roads.

Another housing mania is the last thing we need. We need to keep the multinationals here, and to listen to their concerns about the education system, the neglect of maths and science. We need to compete in high technology, above all in innovation. We need to keep the best and brightest of our young people at home, instead of exporting them.

For a very long time, Irish emigration consisted of enormous numbers of the semi-literate, along with a few highly educated people, doctors for example. Now it is largely graduates who flee after the taxpayers subsidise their education, as they subsidise almost everything else.

These problems will not go away, no matter who holds office and no matter whether we succeed in working our way back to growth and stability.

And the Greens will not go away. Their less-than-happy experiences as a "party of government" do not necessarily doom them to follow all the other fringe parties into oblivion.

Granted, the precedents are strongly against them. A quarter of a century ago, the birth of the Progressive Democrats was greeted with fervour. Their lingering death was scarcely noticed.

But in one massively important respect, they differ radically from all the others. Whatever anybody may think about climate change, the environment will remain a central issue in Irish, European and world politics. Another quarter of a century on, there will still be some kind of Green Party. But it had better be tougher, more focused, more credible and more sceptical. For unless we discount most of Irish political history since independence, there will still be a Fianna Fail party, too.


Irish Independent