Failure of anti austerity narrative and the political fallout of the ‘Greek Diktat’ in Ireland?

“There is nothing so practical as a good theory…”

– Kurt Lewin (1890-1947)

So here’s the pattern. You protest that the lot who are in power are corrupt and are letting the people down, and have not asked for what they would inevitably be given, if only they had asked for it.

In the case of Greece, despite a long hard haul out from under an impossible burden, the Greek economy eventually clocked up a 2% rate. Not bad for a country with a unbearable debt ratio of nearly 200%, and painfully high youth unemployment.

In January when Syriza won power (shattering PASOK in the process) it sailed to victory on a promise it could renegotiate a deal on debt. It was widely welcomed as good common sense by some very smart economists and influential commentators.

Seven months on, and it all looks a bit different. The fundamentals were rough on Syriza. Not least because most of its debt is the responsibility of  democratically elected colleagues in other EU states, and not the original bondholders or the banks (which had been running relatively freely).

In the last week alone Ireland’s contribution has risen from a few hundred million to an estimated three billion Euros in just last week. The deal the Greek people rejected has been superseded by a far more draconian one, not least because of the flamboyant brinkmanship of the last few weeks.

So, Fintan’s teeth grinding aside what are the practical shorter term ramifications in Ireland?

Handily enough, Harry McGee has done a quick run down of the likely effects on the various supporters (and former supporters) of Syriza in Ireland. It’s an interesting exercise, but in the case of the independents and smaller parties it is hard to predict what effect foreign policy has on them directly.

In the case of Sinn Fein, the real pinch point is not its public support (despite the suspicion of a Reverse Ferret after their Ard Fheis) for Syriza’s now backfiring anti austerity strategy, but the deeper sense that their much reputed strategic vision is looking more like tactical fidgeting.

McGee probably nails it best here:

If the party [SF] continues to back Syriza it will be acknowledging – to all intents and purposes – that it in power could have done little to alter the course of history over the past few years.

If it backs away from Syriza it will be accused of back-peddling and of being Tadhg an Dá Thaobh (Tadhg of the two sides). Either way, there is not much upside.

For a party accustomed to riding many horses at the same time the latter is much less of a problem than the former.

Party strategists have been banking on the house owning C1s and C2s of Dublin, who first defected to Labour in 2011 and who subsequently have been drifting inexorably towards Sinn Fein would never go back to voting Fianna Fail after the searing effects of the property crash.

You can expect Syriza’s failure to get its way against Frankfurt to be exploited as a telling counterfactual to Ireland’s recovery both by the governing Fine Gael and Labour parties and the original villains of the piece, Fianna Fail.

Which brings me back to the header quote at the beginning. The real damage is the political failure of the anti austerity narrative.

For all the good actions recommended by macro economists and others, anti austerity has only proven practicable in the US (where swingeing public sector cuts came with the deal). A good theory is actionable. A poor one isn’t.

“Everybody experiences far more than he understands. Yet it is experience, rather than understanding, that influences behaviour….” 

– Understanding Media: The Extensions of Man, Marshall McLuhan