Fianna Fail meltdown?

Fianna Fail could loose half its TDs at the next election of the vote falls below that it secured in June. So claimed Stephen Collins in yesterday’s Irish Times.

Over on O’Conall St I have been speculating about when an election might be called.

ADDS: The Sunday Tribune reports today that former Taoiseach Bertie Ahern has indicated he will stand if a snap election is called before the end of the year.

  • Comrade Stalin

    Conall,

    No harm to you, but I’d enjoy your blogs a lot more if you contributed them here rather than using Slugger to promote your own.

  • I hear what you say comrade. In fairness though I cross post to try and add something more.

    Conall

  • jim

    In Fairness Conall there is a fairly high level of posts which open with the line ” over on O’Conall st…”

  • Appreciate your views Jim.

    I was also hoping we might get some views on Fianna Fail’s propects.

  • Greenflag

    Conall

    ‘I have been speculating about when an election might be called.’

    2011 . Even later if it were possible . I just can’t envisage FF hitting the lower 20’s in a general election but the analysis at least the way the numbers work on your blog is pretty accurate .

    Worst case scenario will be low thirties IMO . With any luck by 2011 the recovery may be underway and people will remember the good old days when Bertie & Brian had their heads in the sand and would’nt have known a collectivised debt obligation from a hole in the wall or from a hedge fund derivative and both blithely assumed that the world’s leading financial experts and policy makers and national and federal regulators in Washington , Wall St and the City knew what they doing and why :(?

    But as a generally FF supporter I won’t lose any sleep if the party gets a good bating but is not totally annihalated . That would be a bridge too far . And I’m not convinced of the merits FG/LAB alternative .

  • Mick Fealty

    Indeed Conall. Bertie looks to be trying to keep to his promise to battle on to May or June 2012…

  • Mick Fealty

    Also, it seems to me the key to this is the Greens. On the face of it, they look to be dicing with death calling a national convention over NAMA.

    The calculation within FF is that the Greens are as death bound as they are in any early election (with local govt reform is a big opportunity for them to show something for their time inside the big tent).

    The Greens are the key. But even then, I would not put it past FF to effect a swift change of leadership; punt Nama and the Tax Commission reforms hard as a coherent response to the crisis, and row past this stormy water.

    Anyone going to the country as incumbents in the next year is going to get slaughtered.

  • The press also reports that the Gov will delay a final vote on the NAMA legislation until after Lisbon II. It is a perfect storm. Everywhere FF looks there is another menacing waether front from which there is no escape.

    The opposition will want to get Lisbon out of the way and then push hard for an early poll. NAMA is going to be a huge battleground in the Dail now that FG and Lab are both firmly opposed to it.

    Outside the certainty of more job losses this winter and local discontent on issues like Sligo Hospital will keep FF backbenchers very jumpy.

  • DC

    Well perfect time for an SDLP merger with FF that would put us all out of our misery and serve as justification for a previous error of judgement on the SDLP’s behalf and for FF in relation to the running of the economy.

    As for Bertie Ahern, bring out your dead, bring out your dead, and he’ll need plenty of makeup for that, without Dail expenses not sure he can a) afford it b) want to pay for it himself even if he can.

  • Mack

    I wouldn’t write off FF just yet. There are hard decisions to be taken, FG and Lab aren’t presenting a coherent alternative. There’s a lot of anger at FF, but I think those who want FG in government are likely to be suspicious of Labour and vice versa. The more time goes on, and the more FF take the hard decisions the more likely they’ll be to swing voters (particularly from FG) out of fear of the opposition.

    NAMA is a big potential ice berg though, if that (in implementation) goes wrong for them, then who knows what level of meltdown that could result in…

  • DC

    Mack it will be interesting to see if your analysis is right in terms of the mentality of Irish voters.

    Take Britain, Brown did what it took to stave off disaster, but the electorate are a stroppy lot and Brown’s almost unquestioning stance on the role and operation of banks in those credit investment markets has done for him and New Labour. Especially now as the pieces from the fall out are being pulled together by academia.

    I dare say, even by a far stretch of the imagination, the same treatment will go for FF. Not to mention those multinational fiscal stimuli are about to run out across Europe and Britain. So come election time in Ireland counting the coppers in the pocket instead of the notes might just be all the more distasteful after so much prosperty. A bit of a drastic exaggeration, but you get the point.

    It was that anglo-american phoney credit property bubble along with that subsequent greedy banker-syndrome which will likely afflict FF’s Ireland pretty much as it has done in Britain, and America in particular.

    So, I’d be very surprised if they didn’t take a massive hit a la Labour in Britain and too with the voting in of Obama stateside to eradicate the memory of Bush’s presidency that was felt to the biggest shame (not to mention embarrassment abroad) in America’s recent history.

  • Paddy Matthews

    For what it’s worth, a piece from Déaglán de Bréadún on the Irish Times blog that stands in stark contrast to the efforts of some posters to whistle past the graveyard:

    Talking to seasoned politicians this week, two strong messages came forward, both of them surprising to a greater or lesser extent.

    The first was – and this one took your humble scribe aback – that Lisbon is a dead duck, a goner, not a hope in hell. I protested that, surely the people would vote Yes out of sheer naked fear of making the economic situation even worse.

    Nope, I was told by a highly-experienced (and pro-EU) Fianna Fáil backbencher. The farmers are voting against en bloc and don’t pay any attention to what their leaders are saying. (I should point out that the executive council of the Irish Farmers’ Association has voted unanimously to recommend a Yes to Lisbon.)

    But surely the possibility of negative economic results will deter people from voting No a second time, I suggested? Another TD, from the Labour side, said he believed there was a “death-wish” among the electorate.

    More narrowly, I discussed the likely outcome of the next election with two FF backbenchers who have been through many a battle. “Where we have two seats, we’ll come back with one; where we have three, we’ll come back with two.”

    http://www.irishtimes.com/blogs/politics/2009/08/22/stark-honesty-for-once-in-leinster-house/

  • Mick Fealty

    Collins and others have highlighted that problem with the opposition in the past. The only thing the government has in its favour is the length of its term can take it into well into 11/12. And possibly past trouble.

    Apart from the ideological split, too many of the opposition’s moves smack of opportunism rather than the reliably steady voice of the next government. They’re banking too much on public anger driving FF from government.

    But in the end Collins’ piece is mostly academic. The interesting thing about Kenny’s clean bank proposal lies the fact that it imposes penalties on bondholders, whilst Nama doesn’t. That could be the opening of realistically common ground between Labour and Fine Gael supporters. And amongst a fair swathe of Fianna Fail supporters (those who aren’t developers or related to developers)…

    The opposition must do more of that to maintain this thin wedge securely between FF and its traditional support.

  • Mick Fealty

    That’s worth a blog Paddy (you really should come on to the team!!)

  • Paddy Matthews

    Apart from the ideological split, too many of the opposition’s moves smack of opportunism rather than the reliably steady voice of the next government. They’re banking too much on public anger driving FF from government.

    Mick, I think you’re looking now at something similar to what happened to the Tories in 1992 after Black Wednesday.

    Fianna Fáil’s reputation for economic management is shot to pieces and isn’t going to come back this side of a (lengthy) spell in opposition.

    Back in September last, they guaranteed not only the deposits in the Irish banks (which would have been perfectly sensible) but also their liabilities.

    To quote Karl Whelan of UCD:

    the banks continued to deny they were facing enormous losses. This denial of reality paid off for them. By fooling our Government into believing they suffered from a short-run liquidity problem rather than a long-term solvency problem, the banks managed to receive an almost-blanket guarantee on their debts from the Irish taxpayer.

    (http://www.irishtimes.com/newspaper/opinion/2009/0813/1224252497177.html)

    Having been codded by the banks (apart entirely from the rotting corpse of Anglo-Irish into which €4bn of taxpayer’s money has been transfused so far) they’re now proposing to take non-performing loans off the banks and into the loving arms of NAMA. To quote Whelan again:

    With Nama apparently determined to put an optimistic spin on all loan purchases, viewing them through the rose-tinted spectacles of “long-term economic value”, the incentive for the participating banks has been to maintain that loans … are good and to then sell them to Nama for far more than they will ever repay.

    However, the ordinary citizens of this country who will pay for this fiasco either through taxes or through the loss or deterioration of public services won’t be told which properties NAMA is taking over or what rate of discount will be applied. “Commercial sensitivities”, don’t you know…

    Quite simply, it would be difficult for the opposition to come up with something more hazardous for the long-term future of this state.

    And in the meantime, public expenditure cuts will be brought in that will hit the weakest in this society, but will also disproportionally hit the sectors that have traditionally been most loyal to FF – rural voters, pensioners, the urban working and lower-middle classes. Mind you, the size of those cuts will be dwarfed by the amounts being gambled on NAMA.

    But either way, Fianna Fáil will be obliterated next time round. Getting much above 25% will be a relatively good day for them.

    And Bertie would be wiser to call it a day whenever the election comes. Because if the reaction to his brother in the by-election is anything to go by, the electorate of Dublin Central have seen through him.

  • Paddy Matthews

    And in addition, the words of Michael Casey (a former Central Bank economist and IMF board member, so not a bleeding-heart liberal):

    A huge amount of Government spending is going, or will go, into bailing out the banks. Nama, the National Asset Management Agency, is likely to pay too much for the bad assets of the banks. If they don’t do this they will have to inject more capital into the banks; this may or may not lead to nationalisation. Taxpayers are likely to suffer for years even though shareholders will benefit from recovering bank profitability.

    Although most welfare recipients do not pay taxes, any reduction in their benefits could be seen as a contribution to the coffers of banks. A PR genius could not spin this any other way. It comes across as obscene: the poor subsidising the rich. It must be the worst nightmare of spindoctors.

    To make matters worse, one bank, Irish Life and Permanent (ILP), has been allowed to increase its mortgage rate by a half percentage point even though this is in direct opposition to monetary policy as formulated by the ECB. Instead of cutting its margins like every other firm in the country is having to do, ILP are increasing their margins by using their dominant market position. Having caused unprecedented damage to the country, banks like ILP are not showing any remorse but are ready and willing to exploit their customers all over again. And there is a deafening silence from the Central Bank and the consumer side of the Financial Regulator.

    McCarthy seems to be about right in his estimate of the cuts needed. But there is a wide body of opinion which will not accept this, especially in the light of the banking system bailout. The implications for civil unrest should not be discounted. At some stage the economic merits will have to be balanced against the wider social costs.

    http://www.irishtimes.com/newspaper/opinion/2009/0819/1224252863291.html

  • Paddy Matthews

    Mack:

    There are hard decisions to be taken

    “Hard decisions” will not be accepted from the same people who led us into this mess and seem to have learnt little or nothing from it.

  • DC

    And to cap it off, the likes of Michael McDowell and the PDs are off the scene now, as far as my tuppanies go, he did most of the unpopular stuff as justice minister when in the old coalition.

    So it’s pretty much FF with a slice of the natural Greens to take the pummelling, the suckers like PDs and McDowells are long gone. The old left socialist songs like “they’re sending back babies to hell at McDowell’s command” remain in the previous term. (Sad to see the PDs fold and McDowell go especially for his SF/Adams jibes.)

  • Deaglan’s piece is very interesting.
    If proven true it puts FF in an even bigger quagmire. Does the party follow its vote back into conservative, inward looking politics or do they seek in some way to preserve the positive aspets of what has been achieved over the past fifteen years.

  • Don’t know how anyone can presume to know what “spin”, optimistic or otherwise that Nama will put on property values. Many of the staff aren’t even in place yet. One thing to remember is that most asset managers will be primarily concerned with their track record of how they grow their funds under management. These people are likely to take a pretty cold-eyed sober view of valuations, otherwise their own investment performance will suffer later. It’s curious how many commentators are anxious to damn these people before they are even appointed.

  • Greenflag

    Paddy Matthews,

    re Karl Whelan’s comment above i.e

    ‘By fooling our Government into believing they suffered from a short-run liquidity problem rather than a long-term solvency problem, the banks managed to receive an almost-blanket guarantee on their debts from the Irish taxpayer’

    Not just ‘our government ‘ PM but governments in the UK , USA etc . Of course Irish voters are not looking any further than home to find scapegoats . The implication is logical . If our Government is easily fooled then so must the electorate be who voted them in ?.

    ‘Having caused unprecedented damage to the country, banks like ILP are not showing any remorse but are ready and willing to exploit their customers all over again.’

    What else would you expect ?. They have to get their money somewhere and guess where the line (so far ) of least resistance is ? It may take civil disturbance outside ‘bank premises’ for politicians to sit up and take notice . I read that in the USA some chap in the NE name of Marx (no joke ) has been leading public demonstrations outside the homes of some well known bankers in an effort to get said banks to reduce the ‘squeeze ‘ on hard pressed mortgage holders . Apparently this direct action is working much more effectively than all the ‘nice verbal and written agreements between the present administration and the banks representatives .

    ‘And there is a deafening silence from the Central Bank and the consumer side of the Financial Regulator.’

    Again this is not just the response in Ireland . The ‘financial regulators ‘ across most of the anglophone world have been ‘fooled’ for most of the past decade and even further back by the manufacturers of ‘paper ‘ assets such as CDO’s . Elected governments in Washington DC, London and Dublin and elsewhere have ‘collaborated ‘ to the point of self abnegation with the money men of Wall St and the City etc . The ‘risen’ people took the lords of finance and politics at their word and clambered aboard the lemming express and now that express has come to a shuddering halt inches from the precipice. The ‘people’ are also not without blame (but it might not be politic to tell them too loudly 😉

    Those passengers not strapped firmly into their seats i.e those without sufficient financial assets are being ejected from the express by the natural physical force of momentum being brought to a sudden stop.

    Oddly enough the biggest economy in the EU i.e Germany goes to the polls at the end of September and Angela Merkel’s CDU looks set for victory via a coalition not with the SPD (German Labour ) but the FDP (German Liberals). They’ll be re-elected for many reasons but chiefly because Merkel exudes a management competence and cool which inspires confidence . Of course it probably helps that Merkel by profession was a physicist and Germany has avoided the property bubble burst which has devastated the USA /Ireland and the UK .

    We had better stick with the Euro 🙂

  • Mack

    Paddy Matthews

    “Hard decisions” will not be accepted from the same people who led us into this mess and seem to have learnt little or nothing from it.

    That’s a fair point. In the end that will be a bigger factor than the problems I suspect afflict some of those who share the FF/FG analysis wrt to the fiscal crises. FF will undoubtedly lose more votes through anger, than it can gain through reasoned fear of the opposition. The scale of that differential will determine the scale of the collapse and whether or not it amounts to a meltdown or something more recoverable.

    DC

    I don’t doubt they will lose the next election, I’ve just heard people sticking up for them in conversation (or more accurately scaremongering about the opposition) recently, something that wouldn’t have happened 6 months or a year ago.

  • Mack

    Paddy Matthews

    Mick, I think you’re looking now at something similar to what happened to the Tories in 1992 after Black Wednesday.

    Paddy, that might be an instructive example. The Tories actually won the 1992 election – despite enduring a recession and a property bust that kicked off 3 years earlier. It wasn’t until 1997 when Labour moved to the centre and found a charismatic leader who offered Britain a coherent and credible alternative that the Tories imploded.

    Do the same conditions exist in Ireland today? Do you know what you’re going to get from a FG/Lab coalition? There are 2 very clearly defined problems (fiscal crises, banking crises) with 3 different sets of solutions.

  • Paddy Matthews

    The Tories actually won the 1992 election

    Black Wednesday came after the 1992 election.

  • Mack

    Paddy –

    Ah, you’re right. Support for the Tories plummeted after Black Wednesday and didn’t recover until recently, predating Blair by 2 years. Bang goes that theory.

    If your analogy holds though, that would imply support for FF has already hit a floor with a drop of only between 5/7% (Euro/local)?

  • Paddy Matthews

    If your analogy holds though, that would imply support for FF has already hit a floor with a drop of only between 5/7% (Euro/local)?

    They had 42% of the vote at the general election.

    They have about 24% now.

    They lost a quarter of their county council seats in June from an already low base.

  • Mack

    True. They had around 41% of the vote in the general election in 2002 and got around 32% in the 2004 local elections, and 29% in the Euros.

    They got 25% in the locals and 24% in the Euros in 2009. Comparing like with like the falls aren’t particularly spectacular, but they may be regarded as unsuitable for government now – which would imply massive falls at the next general election. But will that be the case?

    The commission on taxation has called for a halt on income tax rises – Ireland’s income tax structure means that working-class and lower middle class workers pay very low rates of tax (if any at all). Labour would rather raise taxes than make cuts. Public sector workers might be inclined to vote Labour, but FG are if anything even more strident on Public Sector reform than FF (they may reverse the pension levy, but at what expense – privatisation?)

  • DC

    Greenflag,

    ‘They’ll be re-elected for many reasons but chiefly because Merkel exudes a management competence and cool which inspires confidence . Of course it probably helps that Merkel by profession was a physicist and Germany has avoided the property bubble burst which has devastated the USA /Ireland and the UK .’

    The SDP leader is uncharismatic and bureaucratic in approach (kinda like voting for Brown); Merkel is set for another victory, but she has been highly evasive on being seen to make those big decisions. Coalitions are good for somethings, like the PDs were to FF.

    Apparently the CDU are putting up posters with candidates with big/bigger cleavages, saying they have more to offer:

    http://www.spiegel.de/international/bild-644257-5467.html

    Frankly it would be off-putting to me¬

  • Greenflag

    Cleavage explanatory if not excuse

    Lengsfeld, who is running for a seat in the German Bundestag, said she needed to come up with an eye-catching poster for the Sept. 27 federal election because she is campaigning in the deeply left-wing Berlin constituency of Kreuzberg-Friedrichshain, where the CDU got just 12.4 percent of the vote in the last election four years ago.

    She said the poster had attracted 17,000 visitors to her election campaign Web site in a single day. Many of the critical comments posted on her blog came from men accusing her of sexism. One poster, who identified himself as Daniel Baltar, wrote: “Have you gone completely mad? You have declared yourself insane with such posters — and politically disqualified yourself.”

    In the unlikely event the lady wins the seat in Kreuzberg I suppose we can look forward to the Tories foisting female candidates with pole dancing skills in palces like Gateshead and Scunthorpe eh ? But not in South Belfast well not yet 😉

    I don’t even want to think about Mary Harney’s possible re-election strategies 😉

  • DC

    Hang on Greenflag is that not what Berlusconi is trying in Italy!

    It’s all a matter of taste but if you’re going to cut your cloth like that then the Berlusconi way seems more appealing than say the Merkels and Lengfelds of this world.

  • Greenflag

    ”Berlusconi way seems more appealing than say the Merkels ‘

    I find Merkel much more appealing than Berlusconi.

    Chaps a cad -a media mogul megalomaniac but I hear he organises parties that would put Emperor Nero’s and Caligula’s in the shade .

    ‘It’s all a matter of taste’

    That’s right . Some people found Sarah Palin tasteful. I did’nt . It was the way she told them .