The message from the incoming Taoiseach, Enda Kenny, is that the decision rests with the people as to whether we have a single-party Fine Gael government, backed by some Independents, or a Fine Gael-Labour coalition. When I asked him last week which he'd prefer, Kenny left no doubt but that his clear ambition is to lead a single-party government.
You wouldn't have any ambition as a leader if you didn't say that the ultimate thing is to have a mandate from the people to put your own party in government," he said, "but I wouldn't be presumptuous about what they might do.
"I can't look beyond February 25. The people have to make the decision, and whatever the decision they are going to make, the numbers are going to have to work out."
Enda Kenny survived a determined leadership challenge last year, but now has a firm grip on Fine Gael. It is being said by his loyalists that he is an ideal chairman, who has the pragmatism, humility and lack of ego to defer to apparently more talented colleagues in the interest of good government.
Many of his perceived limitations may be just that -- a matter of perception. Some of his most subtle skills are invisible in the public domain, but at the end of the day, he has brought Fine Gael, one way or another, to the brink of single-party government for the first time in over 80 years.
That, no matter what the circumstances, is a substantial achievement and, in the tough world of politics, it is the beginning and end of everything.
Aengus Fanning: "One of the big nightmares on everybody's mind is the huge burden of debt that the country is now carrying. My belief is that we weren't masters of our own destiny in these events at all. The bank guarantee and the bailout were rushed through on the basis that the markets were opening in the morning. I believe it was pressure mainly coming from the ECB, because of the pressure from some of the banks on the continent over our debt. The guarantee was like the Versailles Treaty, it led inevitably to the bailout, where, again, we were not in control of things. Both were catastrophic. Time might prove me wrong, but do you agree with my analysis?"
Enda Kenny: "Long before this happened, Fine Gael was saying that Anglo Irish Bank should be broken up into a good bank and a bad bank. Brian Lenihan rang me on the morning of the guarantee and said we are going to have a serious problem with the banks. Fine Gael's view is that we needed a working banking system for life and commerce and business to go on. We weren't given the conditions, so the guarantee went through. Fine Gael supported that. But that period of the guarantee should have been used to restructure the bank."
AF: "You weren't given the full story."
EK: "Nor anybody else either."
AF: "To me, the negotiations were poorly handled on our side. To tell you the truth, I'd prefer to see Jack O'Connor handling our negotiations."
EK: "In terms of the bailout?"
AF: "In terms of both the guarantee and the bailout."
EK: "There needs to be a parliamentary inquiry into that, whether those who were involved will give evidence before it in an open forum I don't know, but the question is if we can ever find out what went on here?"
AF: "When a member of the Cabinet tells you that he got a call at 1am in the morning of September 30th telling him that it was a fait accompli and that most of the rest of the Cabinet were in exactly the same position, [you know] there wasn't even collective Cabinet responsibility for the bank guarantee."
EK: "On a few occasions when the government of which I was a member was rung up by the Taoiseach for what effectively were Cabinet meetings, they ring you up and say it is the Taoiseach here, it is the same as if you were at a meeting: That doesn't appear to have happened here. In respect of the ECB/IMF, where were the political negotiations in all of this? The Minister for Finance went over at 6 o'clock in the evening, presumably it was just accepted so whatever deal was put in place in some of the areas where there could have been movement, that is where politics would always play its part.
"We met Mr Chopra when he came over here and he made it perfectly clear that he would have been prepared to consider changes within the structure of that deal for a far more aggressive jobs creation programme . . . and also in respect of our programme for the more efficient delivery of public services and cutting out government waste. . . They were quite willing that you can substitute one element of this programme for another within the overall ambit. If this works out, we will go and talk to them about that. That is why I went out to Barroso to signal to him as president of the Commission that there are priorities here that we think should be dealt with in this deal. Ireland is, in many ways, the guinea pig.
"We were the first to avail of this kind of operation, Greece was in a slightly different position. So it is unfair to expect a country the size of Ireland to carry all the burden the way that this is going to fall. Now Portugal and Spain have their own problems and there are lots of options coming on the table from other European countries as to how this is going to have to be dealt with. So we informed Barroso as to what would be our priorities and this can and should be renegotiated on the understanding that it is Europe- wide, specifically as regards the interest rate and in respect of the banking structure that is here. If the European Central Bank is requiring us to sell these assets at fire-sale prices quickly, that means that the banks are going to have to be recapitalised from this €25bn at a 5.8 per cent interest rate. We have already given them €100bn. The Irish are going to be driven to the edge.
"We followed that yesterday in the invitation to the German Chancellor Angela Merkel to explain to her what our priorities would be and I have to say that she is a very strong supporter of sustainable growth and jobs and she recognises the difficulties that Ireland is in and the decisions that have been taken to date. I told her that if our party is elected to government, this is what our priorities are going to be in the immediate future. There are serious EU Council meetings coming up in March where the incoming government is going to have very little time to get itself prepared and where decisions are going to be made. We also talked about her comment that there should be a constitutional provision in some countries to have a debt rate that cannot rise above a certain level and we mentioned that we had proposed that some years ago to prevent reckless spending by governments in the future."
AF: "And what did she say about the corporation tax?"
EK: "We made it very clear that we couldn't contemplate a shift in the corporation tax rate at all or the consolidated tax base either, this would make Ireland unattractive in a lot of ways. She appreciates how fundamental that is for Ireland. These are political discussions that are going on outside any treaties that currently exist."
AF: "One of the areas I am most concerned about is the consumer economy. Every main street is pockmarked with closed businesses."
EK: "Unspoken and unseen . . . and the man who will come out to you at the door and say 'I am after losing €300,000 on bank shares' and I am 67 and I have no chance of recovery' and you never hear of that. He never made a mistake in his life except to put his money into what he considered blue-chip shares and it is all gone and some of those people are absolutely distraught. And every small town you go through, there are places for rent or for sale and in some cases becoming dilapidated. It is all about confidence to keep your tax rates down."
AF: "We are now entering the fourth year of the domestic recession and I know a lot of people who, the first year, the second year, thought it was a cycle, and they'd see it through and they did all the right things like good business people. Now there is, since the bailout and the four-year plan, a notion that €6bn is [being] taken out of the economy in 2011, so they are now seeing something a bit more ominous, this is more than the ordinary business cycle."
EK: "[Alan] Dukes made a statement there last week that he thought there might be another €15bn required, a bigger black hole than was originally estimated. Now the banks' stress test for solvency/liquidity will be finished by the end of March so that will become available here as part of the European picture very quickly. If anything has come out of the IMF coming in here, it is not only our loss of sovereignty, it is also truth in the sense . . . of how bad the situation is. When these stress tests are done on the banks, we will know what the story actually is.
"This is where our activity in the indigenous sector is absolutely critical. That is why the jobs budget we would focus on is part of that . . . we need to translate this programme into reality in Castleisland or Castleblaney or wherever.
"We have also looked at the question of putting €100m micro-funding for getting people back to work. In any village where you can get a couple of jobs, things start to move quickly. I actually think the public service has become demoralised. Anything bordering on a challenge was hived off to consultants for more reports and a change of government brings a change of motivation and it's funny how people's confidence can start to rise quickly even though there is the difficulty up ahead."
AF: "When the chips fall after the election, suppose Fine Gael needs four seats for an overall majority, would your preference be for going into coalition with Labour for a large overall majority or forming a single-party government with the help of Independents."
EK: "You wouldn't have any ambition as a leader if you didn't say that the ultimate thing that you would like is to be able to have a mandate from the people to put your own party in government. But I wouldn't be presumptuous about what they might do. I can't look beyond the 25th of February, the people have to make the decision and whatever the decision they are going to make, the numbers are going to have to work out.
"To be absolutely honest with you, it is something I haven't turned a thought to. What I do feel happening is that when I try to explain our five-point programme to people, they say 'I didn't know that is what you were talking about, I haven't seen this before, other than woolly promises'.
"There is nothing in this that can't be delivered. It is with a bit of excitement you are saying to the people -- it is your choice. The last election there were no choices because Fine Gael had joined with the Labour Party in a common platform on tax, economics and health etc. Now they have a real choice."
AF: "A coalition with Labour would entail some compromise -- Labour is 50/50 between cuts and tax; you are 73/27 in favour of cuts."
EK: "The difficulties that lie ahead are going to require courage and fairness and a demonstration that you are serious, and that requires stability and a strong government that has a mandate. Under no circumstances do you want a situation where an election is held and there is something fragile put together."
AF: "What do you say to homeowners in negative equity?"
EK: "We made a conscious decision for those who are in employment that the mortgage interest relief would be raised to 30 per cent, which affects about a quarter of a million people and would be worth about €160 a month on a mortgage of €400,000.
"Now we would end mortgage interest relief in 2011, it was due to end in 2013 anyway. But any houses that are being bought now are being bought at very much lower prices than between 2004 and 2008 which is the period in which we feel are the most vulnerable people and couples out there. And there are a range of other measures out there that you take for others so the roof is not going to be taken from above their heads."
AF: "I thought you did very well in the debate, there was an idea floating about you wouldn't be out there in these debates."
EK: "When you are doing a tour around the county every day, they do these doorsteps and they are going to ask whatever questions they are going to ask. As [a politician in] a country where there is an avid interest in politics, I was quite happy to take part."
AF: "One of your skills is your ability to communicate with the ordinary people."
EK: "I have never lost that . . . it was always about people and this thing about dramatic changes in how the Cabinet works, I have a very strong view that if you are going to be taking political decisions that are going to affect people, you have to be elected. I have a fundamental difficulty about bringing people in from the
outside and giving them Cabinet responsibility. I would see an opportunity for the Taoiseach of the day having an advisory group, pro bono, if they want to give me their view on job creation, business, social implications, then fine. But you can have access to all that experience without making someone a member of Cabinet, or Minister for Industry & Enterprise simply because you are a big businessman.
"The way that the Dail and the government has been run, or not run, leaves an awful lot to be desired. Irish people will respond when they see the thing working again and the reason it is not working is that it has not been let work. As the Father of the last Dail, it is with a sense of expectation that I look forward to this election actually doing something for this country. The sense of frustration with politics is as deep as it is in business."
AF: "There is a sense that politics has failed us."
EK: "The language has to change to reflect what is happenings behind the doors and on the streets in our towns."
AF: "But the message I am getting from you is that between now and Friday, the choice is the people's. If they want to give you an overwhelming mandate, it is their choice, if they don't, you might have to go into coalition with Labour and maybe compromise some of those objectives -- that is their choice as well."
EK: "I will continue to sell the message as strong as I can that at this time of unprecedented economic challenge, what this country needs is a stable government with a strong mandate. The Fine Gael party has that right in its soul."
