The people have spoken - but what did they say?

Michael Burke: The first clear message of the 2011 election was a rejection of Fianna Fáil, receiving just 17.4% of the first preference vote – also of over 24% of the entire electorate. Given that the unlamented PDs had also been effectively absorbed by FF, and the Greens (who stayed just long enough to help through a draconian budget, but not a weak climate change bill) were also obliterated, there was effectively 30% of the electorate in motion.

Fine Gael was not the main, or even the primary, beneficiary of that dramatic break with FF, receiving just 8.8% of that 30% compared to the 2007 election. The primary beneficiary was Labour, up 9.3%. But the main beneficiary was a generic Left, comprising Labour, Sinn Féin, a majority of the ‘Independents’ and the smaller socialist parties. The combined FF/FG/Green/PD vote in 2007 was 76.3%. That fell to 55.3% in 2011. The combined Labour/Sinn Féin/socialist vote rose from 17.6% to approximately 43% (depending on how many you assign to the Left from among the Independents’ vote).

So, there was a sharp turn towards the Left, but not an outright victory for it. 43% is not 50%.

The key issue was clearly the economy, and the election was held against the backdrop of the recent arrival of the EU/IMF representatives in Ireland, to dictate terms of the bailout of the EU banks. Given that FF was the main architect of the response to the economic crisis and presided over the arrival of the raiding party, then voters were clearly rejecting more of the same. A key aspect of the campaign, and probable determinant of the outcome, was the parties’ attitude towards the terms of that bailout and the further imposition of cuts in public spending to underwrite it. (In another post, the issue of the viability of that programme will be addressed).

In that regard, every single party that stood in the campaign, bar the outgoing coalition partners, argued that that they would at least ‘renegotiate’ the bailout deal. Both FG and Labour spokespeople argued that point repeatedly in the course of the campaign, with Enda Kenny in particular promoting his party’s ties with EU counterparts as the best way to achieve a renegotiation.

Now, it appears from the weekend reports of the EU summit that no such renegotiation is currently possible. Under attack over the 12.5% corporate tax rate, the new Taoiseach and his team seem on the defensive. In any event, the suggested quid-pro-quo of a 1% reduction on the EU portion of the bailout funds would yield a saving of only €450mn per annum. While this is not nothing, it is overwhelmed by the public spending cuts and the bank bailout, the latest installment of €10bn likely to be paid before the month is out.

This payout highlights a clear anomaly in the outcome of the election and the intransigence of the EU leaders, some of whom seem more concerned with their own future tied to the outcome of regional elections or with bombing Libya. Yet, at the election, more than 75% of the population voted for parties or individuals who stood on a platform of renegotiating the deal. The voters of have spoken – but the EU refuses to listen.

Therefore the only reasonable response is to make the same case in a more forceful way. There should be a referendum on the bailout of EU banks by Irish taxpayers, with a rejection obliging a full renegotiation. Then perhaps the EU will listen.

Posted in: Banking and finance • Europe • Politics

Tagged with: EU/IMF fund • Bailouts • Programme for Government