CRYSTAL BALL GAZING 1111 XXXIV

CRYSTAL  BALL GAZING

A favourite story of mine concerns teaching a horse to talk. The story occurs in various forms but is usually attributed to a character in Islamic folklore, Nasruddin. The story concerns a man who has offended or outraged a king and is ordered to be put to death.  He pleads for his life and tells the king that, if spared for a year he will teach the king’s horse to talk. The king accepts the offer but promises a worse death one year on if the man fails to deliver..

The man is upbraided by his friends for his foolishness. He responds:  “I have gained a year. In that year I might die. The king might die. The horse might die. The king might change his mind. And who knows….I might even teach the horse to talk.” The moral being that much can happen in a year. The corollary is that forecasting what will happencan be difficult.

Take the Irish Presidential election. By the time you read this Ireland will have a new President. The race at this stage is too close to call with seven candidates and given  our quirky  electoral system. It has been fascinating. The last two Presidents have, with style and energy, transformed a role that is largely ceremonial, raising the stakes for all candidates this time round. The attempt by Sinn Fein to supplant Fianna Fail as the major opposition force by running its strongest candidate , Martin McGuiness , has added to the contest.

Indeed  who wins is just one of the interesting aspects of the campaign. The results, including the transfers between the candidates, will be studied closely to see whether  the remarkable outcome of the general election last February was a once-off or whether it marked a sea-change in Irish politics. Together with the accompanying by-election –to  fill the seat vacated by Brian Lenihan’s death (what had been Fianna Fail’s only seat left in Dublin) – the Presidential poll gives the first opportunity to stocktake. There are signs that the Teflon coating on the new government is starting to crack as the first painful budget approaches with its room for manoeuvre circumscribed.

Certainly there is a new volatility among a large section of the Irish electorate, a willingness to be ultra – critical and to “throw the bums out” if they are perceived to have failed to deliver. In February this led to a collapse in the Fianna Fail vote, with much of its traditional support seceding along class lines, middle class to Fine Gael, working class to Labour, republicans to Sinn Fein.

Since then Fianna Fail has signally failed to recover and has seen its support decline further in the polls, culminating in its decision not to contest the Presidential election. In vain has the party leadership pointed out that the new government is doing little beyond following the Fianna Fail blueprint for economic recovery. So far the electorate has seen through that one – the programme for recovery, negotiated with EU and IMF guns to the head, would never have been necessary in the first place had Fianna Fail not wrecked the economy.

Fianna Fail now faces a challenge for its self-proclaimed Republican soul, this time in a head to head with Sinn Fein which is also stealing what is left of its populist quasi left-wing appeal. It can do nothing about it as it still tarred with the brush of economic mismanagement as well as the harsh programme of recovery. The omens do not appear good.  Already some analysts are drawing analogies with what happened in Northern Ireland, where Sinn Fein has shouldered aside the SDLP. Sinn Fein has a formidable party machine and  a hard –headed leadership. And, it should not be forgotten, two decades ago a sizeable rump of the political wing of the Official IRA began the odyssey that led to membership of a government coalition (as the Democratic Left), before eventually merging with the Labour Party, where its leading members soon rose to prominence. Could this process be about to be repeated, ceteris paribus?

Lest we forget, however, these events in Ireland have a slightly “phoney war” feel to them They are taking place against the background of the on-going  uncertainty  in the international economy  We have our own problems, and we are grappling with them. Indeed we’ve earned brownie points for being the good guys and taking our medicine within the EU,  unlike the Greeks. The current popular line is that Ireland will be well placed to take advantage of the world economic recovery, when it comes. In one form or another all the political parties buy into this line.

Whether we can deal with the debt mountain tends to be glossed over, or, in a classic example of doublethink, our debt is dismissed as being something that will be subsumed in the new arrangements to follow a realignment of the world financial situation. This may well be, but there seems little or no appreciation of, and certainly no debate on, the collateral damage for Ireland that any such realignment would entail or, indeed of the type of catastrophic global economic situation which would necessitate such a realignment.

The Left, with Sinn Fein as cheerleader in chief,  has embraced with enthusiasm the  localised alternative of a national debt default. This tends to be viewed through Micawberish spectacles, an approach reinforced, up to now, by the perceived pussyfooting approach of the EU heavy hitters to the struggles of Greece actually to implement a rolling programme of austerity.  The grim reality of what was involved for ordinary people when Argentina defaulted, or when the Russian economy collapsed, has had little airing here. What happened in a remote country far away could never happen to Ireland!  Sadly, it could.

Here again crystal ball gazing can prove difficult. The international economy may well  go into meltdown. As the cliché would have it we are now in uncharted waters. And if the world economy does collapse the next generation of economic commentators and pundits will point to the events of the last three years- since Lehman collapsed – and will conclude that the signs were there for all to see, that there was  a sequence of events almost teleological in nature which brought about the collapse. Frankly the only things  clear at the moment are that the future is a hidden book and that the major  political leaders worldwide are agreed only on their fear of the unknown and what the future may bring.

Much can happen in a year. But events move in flux and do not fit neatly into a rigid timeframe. Greece may well default over the next twelve months, but the process will have begun before and the consequences will  persist after that year. Ireland seems to have bottomed out economically in some respects but the when and how of recovery is contingent on many factors. We may get a helping hand  – Eurobonds or a common Eurozone debt have been talked about. There has even been reference to the origins of the Dollar. But political problems remain – almost as formidable as teaching a horse to talk.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s