27 Jun 2022

Mick Mulholland’s Poltical Notebook: Dealing with bank debt

editorial image
Where does Ireland stand in terms of achieving some kind of relief on its crippling bank debt?

Where does Ireland stand in terms of achieving some kind of relief on its crippling bank debt?

It is a critical question as the political season kicks off in earnest.

The signals are, to put it mildly, confusing. There are some supportive words coming from Europe, and the Government remains upbeat on the issue.

The Taoiseach, Enda Kenny, was optimistic of a March breakthrough for the Government when he was interviewed on radio on Sunday.

“I don’t contemplate not getting a deal here,’’ he said. Fighting words indeed. But we heard strong words before, when October of last year was set as a deadline for a deal.

The Government is due to make a payment of 3.1 billion euro on March 31st. A number of Ministers have emphasised that the Government does not want to make the payment.

Indeed Minister for Communications Pat Rabbitte has said that the Government will not be paying up in any event. But it is a blunt reality that we will have to pay up unless a deal is done.

There is more at stake here than the whopping amount of money involved. The Coalition’s credibility will take a severe battering if there is no deal.

And the deal has to be substantial. Window dressing of any kind will not go down well with people battered, broken and bruised from the scale of this huge recession.

A deal on the debt will be a critical battle in The Economic War.

If we get a deal, then we will exit the bailout at the end of the year. But if there is no deal, that all-important exit is unlikely.

This would be a devastating setback for the Government and a huge psychological blow for the Irish people.

This Government will survive or fall on its performance on the economy. Other issues may be important. There are strong views on abortion, for instance, but the core achievement demanded by the Irish people is real fiscal progress.

Back in the 1950s, as people poured out of the country and some commentators wondered if the country had a future at all, Eamon de Valera could waffle on about restoring the language.

We were a broken and battered people then. Deference was everywhere. So apart from the unemployment marches in Dublin, people grimly accepted their lot.

Thousands emigrated. Some 400,000 Irish people left these shores in that energy-sapping decade of 1951 to ’61. Then came the Lemass revolution.

Some hope was restored. And now we are on the floor again.

There is a difference in public mood this time. The age of deference is dead in Ireland.

Today we do not believe that our betters, in Church, State or wherever, can hand down edicts that are humbly accepted.

Who would have thought that the power of the institutional Church could crumble to the extent that it has? Who would have thought that the confidence in politics, banking and business could all but collapse?

We are, today, a more enlightened people.

As our young people leave the country in droves, those left behind will not put up with cod or obfuscation.

And that is why the March deadline for a deal on the promissory notes is so important.

People will want to see some light at the end of this long tunnel. A return to some kind of fiscal autonomy would be a practical first step.

Waffle will not work. And the Government knows this.

The U-turns on election promises showed that the two parties in power, particularly Labour, were as capable as Fianna Fail in the so-called good the old days of engaging in auction politics to garner votes.

Voters are watching the Government closely. If it achieves significant progress on the economy, the two parties would well be returned to power.If not, then look at the recent history of Fianna Fail.

Voters used the ballot box to engage in a level of political butchery not witnessed before in this country. The same treatment would await Fine Gael and Labour.

Some Ministers are prone to calling this Coalition a national Government. It is no such thing. The gains made by Fine Gael and Labour were largely due to the hiding given to Fianna Fail by angry voters.

And, of course, there were the election promises: no cut to child benefit, no increase in third-level fees, not another cent to the bondholders. And so on and so on.

Since taking office, the Government has had an unhappy habit of reminding people of the economic wreck it inherited. People know all about that. They know it in the reality of their daily lives.

That was why Fianna Fail was hammered and Fine Gael and Labour were given a huge majority.That huge majority could disappear at the next election if there are not some real signs of economic progress.

That is why March will be a defining month for this Government.

To continue reading this article for FREE,
please kindly register and/or log in.

Registration is absolutely 100% FREE and will help us personalise your experience on our sites. You can also sign up to our carefully curated newsletter(s) to keep up to date with your latest local news!

Register / Login

Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.

Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.