Sunday 26 January 2020

Paul Moran: Fear and loathing prevail as many feel we are some way from the nadir

We can find people to blame but few to pin our hopes on as our confidence crumbles

Paul Moran

Looking at the broader narrative of results from this latest Millward Brown Lansdowne Opinion Poll, there is a palpable sense of fear and loathing at what has happened -- and what is still to come.

At a macro level, we feel that the economy has continued its downward spiral -- nearly six in 10 (57 per cent) feel we are in a weaker position than a year ago, compared with just 15pc who feel we are stronger (notwithstanding what official figures say, driven by export-fuelled growth).

Primary blame for our predicament lies squarely at the door of the previous Government (39 per cent) and the banks (35 per cent). Interestingly, given the ire created by promissory notes and their ultimate destination, just 17pc ascribe any blame to foreign banks/institutions, and we see ourselves as being largely a benign influence in contributing to the crash -- just one in eight (12pc) feel we had a hand in our current economic difficulties.

So where does this leave us? Our faith in the institutions entrusted to remedy the mess has been shaken to the core. Half are dissatisfied with the work of Nama so far, with a further one in four believing Nama will hinder a property market recovery.

In terms of redress, it seems we have given up the battle. Just 18pc believe those in the banking sector who are found to be in breach of financial regulations will ever see the inside of a courtroom -- 77pc are more sceptical.

When asked about the terms of the bailout, there is a strong sense that we can only resuscitate the economy by renegotiating for a better deal on our borrowings -- 61 per cent agree this is the way forward.

Yet we feel this will be a futile gesture. Less than three in 10 (28pc) believe that the Government will be successful. So is this a commentary on the negotiation skills of our Government?

Looking at how we view the motivations of the troika, it is more likely that we have come to accept we are in no position to negotiate. Just one in five feel the troika have Ireland's best interests at heart, compared with nearly half feeling that the impetus of the bailout is to appease the concerns of the financial community, presumably at our expense.

The pre-electioneering catchphrases of "It's Frankfurt's way or Labour's way" and "Not one red cent" (to the banks) ring increasingly hollow.

And yet for all our pain so far, a deep sense of pessimism persists when asked of the likelihood of a second bailout. We echo Leo Varadkar's musing last year about the possibility of a second bailout, with 65 per cent believing we will need one. Just 13pc toe the official government line that we won't.

Given these results, and the deepening distrust between our paymasters and ourselves, it is understandable that the upcoming referendum on the fiscal compact is causing jitters in many circles. Referendums by their very nature can be volatile, but given the economic backdrop for this one, the fiscal compact will be hard fought, and emotionally divisive.

Never before has a plebiscite on Europe been fought in such circumstances. We are staring into an abyss, and yet we have little faith in our would-be redeemers.

Nearly two-thirds of us believe the proposed fiscal compact is more to protect the interests of larger European countries. Regardless of the result of the upcoming referendum, it seems we are resigned to be in a position of weakness within Europe.

Having the Bundestag leak our Budget in November, and again letting slip details on our economic outlook this week, doesn't instill confidence and must surely have been met with seething fury in Government Buildings.

This malaise to the European project, as the Government plans for the upcoming referendum, is reflected in voting intentions. Whilst still early in the campaign (indeed this poll began the day the referendum was called), it is clear that the battle ahead will be hard fought and bitter.

When we combine the answers of how people will vote (some were asked this question before the announcement was made, and others after the event), 37pc say they will vote in favour, compared with 26pc against.

However, illustrating the importance of the communications war ahead, one in five (21pc) say it depends. Government strategists in particular will be weighing up the benefits of a carrot or stick approach. Whilst we have been chastened over the past couple of years, there is one area where we remain defiant -- our corporation tax rate remains sacrosanct. Some 74pc feel that the 12.5 per cent rate of tax should not be increased in any circumstance.

Interestingly, on domestic taxation policy, we are slightly less polar -- we are divided as to the best, or worst, way to reduce the deficit through taxation.

The economic arguments for maintaining our corporate rate are well documented, but it may well also be that corporation tax is seen as our last remaining symbol of economic independence.

The fact it irks Monsieur Sarkozy in particular just adds to the sense of defiance.

The devastating effects of the downturn have manifested themselves in a myriad of ways. A majority (67pc) fear for their standard of living this year. However, more harrowing is that over half (57pc) are worried about paying their bills; 29pc fear for their job; and most stark of all, nearly one in five (18pc) are fearful of losing their homes.

Our spectre of our traditional economic pressure valve looms large -- one in three families have suffered emigration since the downturn began, and a further 35pc expect to do so in the future.

Whether we have reached the nadir in these turbulent times is open for debate, and "green shoots" is a phrase we lost from our lexicon a long time ago.

The coming months could be the most treacherous period so far, but may well become the defining moment of this crisis.

Paul Moran is an associate director with Millward Brown Lansdowne

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