Friday 15 November 2019

Leo's aspirations, Trump's tax, an EU comeback and hard borders...

Catherine Byrne, Minister of State for Health, chats with Taoiseach Leo Varadkar at the ‘Reducing Harm, Supporting Recovery’ Conference at Dublin Castle. Photo: Steve Humphreys
Catherine Byrne, Minister of State for Health, chats with Taoiseach Leo Varadkar at the ‘Reducing Harm, Supporting Recovery’ Conference at Dublin Castle. Photo: Steve Humphreys
Dan O'Brien

Dan O'Brien

The slowing down of the news cycle around this time of year is often called the silly season. The media in high summer can sometimes be silly. But the break can also be an opportunity for mid-year stocktaking, and a chance to peer through the haze of events to see what is really important. As the summer wind-down kicks in and we enter the second half of the year, here are my five big takeaways from 2017 so far, and what they mean for the rest of the year and beyond.

1. Leo doesn't know where he wants to go

Leo Varadkar ran a brilliantly ruthless campaign to clinch the biggest prize in Irish politics. His victory, and the manner in which he achieved it, demonstrated organisational ability, a capacity to choose the right people to have around him and clarity of purpose.

But now he has the prize, it is not clear what he wants to do with it, how he hopes to change the country for the better and what his priorities will be. Aspirational slogans, such as "the Republic of opportunity", are certainly useful in underpinning a narrative around a vision, but they are only a foundation. Mr Varadkar and his people will need to do plenty of brainstorming over the coming weeks if he is to shape the political agenda from the autumn onwards.

If the new Taoiseach can come up with a series of new and appealing objectives to pursue, and he can persuade the Independents and Fianna Fáil to come on board, he will have his product. Selling it will be the next objective.

The announcement last week that he is establishing a strategic communications unit is potentially of some significance. The manner in which governments in Ireland have communicated their message has usually been woefully amateurish compared to other countries. While some people automatically dismiss any efforts by governments to explain themselves as spin (and they often are), communicating effectively is vital in all walks of life. As political leaders need to communicate with so many different audiences, it is more central to their chances of success than most other areas of endeavour. If the Varadkar administration can get across more effectively whatever messages it has to communicate it will stand a better chance of succeeding, and being seen to succeed.

2. There is decent momentum in the economy

The economy continues to perform well, if not as well as "the fastest growing economy in Europe" label might suggest. When one looks across the dashboard of economic indicators, most of them are pointing to solid expansion. That is the case across the economy's different sectors and across the regions of the country.

The economy is now entering its sixth consecutive year of expansion. There is enough momentum to ensure growth will continue into 2018, about as far into the future as forecasters can see with accuracy.

Among the weakest economic indicators is the rate at which the Exchequer's coffers are swelling. During periods of high economic growth, governments usually have an embarrassment of riches. That is not the case now, with total revenues growing in low single figures. This weakness, combined with domestic and European fiscal rules, means that Budget 2018 will not be a give-away. Few if any voters will feel a meaningful difference in their personal finances as a result of it. With wage growth among the weakest indicators - it is still low and showing little sign of picking up - the gap between what people hear about the economy and (most) people's personal financial situation won't narrow much in 2017.

3. Trump hasn't been so bad

Looking at the wider political context in the world, things are a lot better now than they looked as 2017 began. For all the sound and the fury in the media, Donald Trump has been much less damaging to the stability of the world than he promised to be, so far at least. While he has proved to be as unprepared for the role of president as he appeared before taking office, and his ineptitude and unpredictability have created something of a global power vacuum, there has been more continuity than change in America's role in the world during the Trump presidency thus far.

On the policies which matter most, and most directly to Ireland, little has happened. The corporation tax reform he promised, and which could be very damaging to Ireland if enacted, has not yet been drafted and even if the White House puts a plan to Congress, it is far from guaranteed to make it into law, as the collapse of healthcare reform this week showed. Mr Trump continues to talk about putting up barriers to imports, but goods and services flow across the Atlantic with as much hindrance as they did before he took office. Nor has he attempted to bully American companies based in Ireland to move jobs home.

So far, so not so bad.

4. Europe is making a comeback

Consumer confidence across Europe is at its highest level in 17 years. The EU-wide economy is growing. So are all 28 countries in the bloc. There has never been more people at work in the bloc.

With the economy picking up after almost a decade in the doldrums, the continent has a spring in its step. Even the French have parked their declinist obsessions and are looking to the future positively under a new leader whose honeymoon continues.

The normalisation of economics and politics has given the continent's leaders some breathing space to look beyond successive crises. A growing number are talking about "deepening Europe". That could involve changing the EU's quasi constitution. For Ireland, that raises the spectre of a referendum. Irish politicos are shuddering at the prospect.

5. Brexit is as bad as ever

In 20 months from now, a hard Border could conceivably appear overnight on this island. Alternatively, the whole Brexit project could be abandoned. Many outcomes between those two extremes remain possible. That is the case despite more than a year having passed since the British voted to leave the EU. As things stand, it may be the new year before matters become clearer.

Irish Independent

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