Ireland Votes but Irish Eyes Are Not Smiling; Country Near Bankruptcy

The Irish go to the polls on Friday (some of the remote islands have already voted) in elections that are all but certain to bring the Fine Gael Party led by Enda Kenny to power. The Fianna Fail Party that has been in power for 14 years is set to receive the worst political drubbing in its history.

Enda Kenny
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Enda Kenny

Fianna Fail presided over Ireland’s boom to bust. It was the party that had to negotiate a disgraceful bailout by the IMF and the European Union, whose terms presage years of continued austerity and suffering for Irish citizens, with the daunting prospect that the sacrifice may not prove enough to restore Ireland’s solvency.

Despite a spirited performance by Micheál Martin, the Fianna Fail leader, in the last televised debate this week, the party will be fortunate to come away with 20 seats in the 166 member Irish Dail. Its previous worst score all-time was 44 seats nearly 80 years ago.

Percentage-wise. the party had never fallen before below 39%, but  it is currently polling at 16%. Fine Gael has been surging in the polls since the start of the elections and is now polling between 37 to 40%. This percentage is magnified by the Irish electoral system of proportional representation with a single transferable vote. The system works to the advantage of the major parties and and since Fine Fail will not only collapse as the party of first preference but also as 2nd best,  Fine Gael has an outside chance of securing a majority. This will probably not materialize, however.

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Fiianna Fail is not the only party to be disappointed by the latest polls. To a lesser extent this holds true for Ireland’s Labour Party and its leader Eamon Gilmore. For a brief period after the dimensions of Ireland’s financial crisis became evident, Labour polled  in the low 30s and was the most popular party.  Labour tended to reason that voters, having repudiated the center-right Fianna Fail, would not turn to a similar rival, but this has not been the case.

Gilmour with his party under 20% has been forced to switch gears and persuade the voters to vote for Labour to ensure that it will be the junior coalition partner and a balance to Fine Gael. Fine Gael could still theoretically form a coalition with independent members of Parliament who are popular locally, but  the Fine Gael party believes that a coalition with Labour, while necessitating bridging some policy differences, will provide stability.

Ireland’s proportional representation system divides the country into 43 constituencies of 3 to 5 members.

Kenny has already promised that all his ministers will stay at their posts and learn the job during the first hundred days and not go back to their constituencies. He is committed to renegotiating the terms of the bailout and particularly the 6% interest rate that Ireland will have to return on her loans. The Irish consider this exorbitant and self-defeating.

Ireland will have to increase taxation in order to rescue its insolvent banks while cutting benefits simultaneously. Some of Ireland’s’s most talented people will be trying their fortune in Australia, Canada and even Britain, also in financial crisis but comparatively better off. Given these constraints, the pessimists cannot see the financial math adding up and fear that Ireland will be driven into bankruptcy.

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Kenny’s hopes for renegotiating the deal may have indirectly sustained a setback as a result of the German state elections in Hamburg  last Sunday. The ruling Christian Democratic Party of Chancellor Angela Merkel took a severe beating. This result, prompted by local factors, ran counter to national polls that pointed to a substantial margin in favor of the Christian Democrats over their main social Democratic rival.

However, there are 6 more state elections on the way and if the Christian Democrats lose most of them they will also lose their majority in the Bundesrat, the upper house. Merkel, who can make or break a renegotiation deal, will be rendered a lame-duck. The most unpopular position for her to take is a another substantial in,jection of German money to bail out countries whom the Germans consider to have been fiscally irresponsible. Merkel is left with little wiggle room and Irish eyes are not smiling.


Source material can be found at this site.

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