Bruce Arnold

Critic of Public Affairs, writing about art, theatre, music and politics

Fianna Fail Do Not Know How to Govern

The most depressing prospect of all, as we go into the unarguably difficult problems of 2009, is a political rather than an economic factor. This is that Fianna Fail does not know how to govern. It has lost the knack. It has difficulty making any decisions, and, when it does, they are either wrong, or too feeble to do any good.

They are breaking up internally over the chaotic performance of their leader Brian Cowen, surely the worst leader the party has ever had. Those who think they might be in the running to succeed him -- Micheal Martin, Noel Dempsey, Mary Hannafin, Dermot Ahern, and probably several others -- are concerned more with that possibility than with the country's problems, which seem to have paralysed them all.

And if they did care about what was wrong with the country, they would not have the courage to speak out.

Brian Cowen himself thinks Fianna Fail is full of talented people who are snapping at the heels of those in power. In a ridiculous interview last Saturday, with Fionnan Sheahan -- who, in his comment piece found it difficult to keep a straight face -- Cowen warned his Cabinet colleagues about new talent threatening. He then exonerated two of the worst -- Brian Lenihan and Mary Coughlan -- and said they were working well!

They are not working well. Brian Lenihan is making many mistakes and is not grappling with the central issue of pay, and Mary Coughlan is just making mistakes.

The crisis requires many things. Top of the agenda must be public service pay, and pay generally in the country.

The social partnership which has served us tolerably well, was always an inflationary instrument of public policy. It should now be dissolved and a pay cut of 20pc imposed.

This, though right, would take nerve and courage. Neither Cowen, nor any of those working with him, have the nerve or courage, and do not grasp this as the right approach.

Every time a minister, or a junior minister, opens his or her mouth, they fail -- with one or two exceptions -- to demonstrate basic ministerial capacity. What they say does not impress us as well-advised strategy.

Fionnan Sheahan, an excellent political editor who leads a strong team in this paper, assessed the situation impeccably in what he wrote a week ago. While I share his views about the unshakeables in Cabinet -- Hannafin, Dempsey, Dermot Ahern and Micheal Martin -- I do not expect from any of them a scintilla of criticism of Fianna Fail's catastrophic mess. There is no chink of realism.

The latest decision-making document, the Government's economic recovery plan is yet further confirmation of the comprehensive nature of the disaster that is being made of our problems. Banks, Budget timing, Budget content, the handling of the Lisbon Treaty referendum, public service reform, public service pay, all proved this point.

We have a habit of sailing with confident ignorance into things, not knowing what we have done, nor what to do when the confidence proves ill-placed. We have been through that lesson with the Health Service Executive, a decision taken rashly and costing us dearly. We have been through it with social partnership.

We went into it over the euro. When we joined we did so without any proper debate, Green Paper or White Paper. The euro was synonymous with Europe and we over-relied on it, as we did as far as the EU was concerned. By so doing we surrendered two out of three key policy instruments, exchange control policy and monetary policy. In the current crisis, with so much on which we relied collapsing around us, it is ironic to the point of being astonishing that the euro-sterling situation is being largely ignored.

The euro has done us serious damage, yet we are so wedded to it, in the misty atmosphere of our emotional relationship with Europe, that we fail to see how it has hampered our responses to economic change.

We had good times, up to 2000 -- an essentially export, investment and consumer-led boom. As Brendan Walsh and Anthony Leddin argued in a recent article, this produced gains in price competitiveness, cuts in income tax and falling interest rates. Growth rate was high, unemployment fell, new jobs were created and surpluses were recorded on both the government finances and the balance of payments.

What happened then is conspicuously part of the argument about the incapacity of Fianna Fail to govern, even adequately. The party let wage inflation spiral upward, while the appreciation of the euro against both the dollar and sterling led to massive loss of competitiveness.

Being in the euro made it impossible to rectify this and the damage was concealed behind the building boom.

No-one governed us through. Cowen was at the heart of it, and members of his team were all in power. If they were talented, they used their talents elsewhere.

The party has never really understood competitiveness and wage control; ever since Lemass it has been relying on slogan-politics such as the paradigm about a rising tide . . . and Cowen's view of his economic recovery plan is dependent on a magical transformation from somewhere, but not from ourselves.

Among other things, we need to bring back price control in some form, if only to force price reductions on imported products to reflect the change in the exchange rate between the euro and sterling. But nothing is emerging on those lines.

It was said to me recently, from within the civil service, that in the 1990s we should not have joined the euro.

Because, at the end of the day, responsible States behave responsibly. We were wrong and we have never recovered. The boom only delayed the inevitable.

Addressing a state whose elite has repeatedly demonstrated contempt for its rules and now appears to have lost its moral compass, is an even bigger problem than the public finances.

Clearly, our political elite is the biggest problem of all.