Enda's budget may very well be Shanghaied by China crisis
Last Tuesday, I eavesdropped on a group of TDs sipping coffee in Leinster House. As usual, the date of the election loomed large. But the talk was not the usual gossip about local politics. No mention was made of the man from Mayo. Even Micheal Martin and Gerry Adams were ignored. The latest opinion polls never featured. Instead, they spoke of Shanghai, not Shankill, of China, not Churchtown. The TDs had been spooked by the overnight stock markets. Seeing, as they do, everything in terms of their electoral fortunes, they spotted the danger. Monday's global stock market collapses had a direct bearing on the Irish economy, the election and, most importantly, the timing of their date with destiny.
Irish shares got the message the instant the Chinese market tanked on Monday. Our local index fell 5pc. As only 2pc of our exports go to China, no one was yet suggesting that plunging growth in the world's second biggest economy would suddenly blow Ireland off course, but shrewder, self-interested politicians knew that if the panic in the Chinese market was soundly based, then amber lights were flashing for 2016 Ireland. Next year could see a rapid reversal of our economic fortunes.
The TDs were muttering darkly. Six weeks before an election budget (October 13) is a rotten time for bad news. Budget Day is already planned to a tee. Growth projections for 2016 will be revised upwards in the Budget speech. Once the 2016 garden is rosy, all the electoral flowers will begin to bloom. The key to election victory lies in the 2016 growth figure, because the 2016 Budget will be built on the growth edifice. China could undermine all that. On Tuesday the foundations of the Government's election strategy were wobbling.