ANALYSIS:The pending reshuffle gives both Coalition parties breathing space before facing some very difficult decisions, writes STEPHEN COLLINS
SPECULATION ABOUT a Cabinet reshuffle has come as a welcome relief for a Government wounded by the trauma of losing two ministers in the space of a week. The current media focus on who is likely to be promoted or demoted in the reshuffle has diverted attention from the strains between the Coalition parties and the problems ahead that could drive another wedge between them. For that small mercy both parties are grateful.
The pending reshuffle also has the advantage of helping discipline in Fianna Fáil, with Ministers and TDs likely to be on their best behaviour to protect their current status or to put themselves in line for promotion. Bertie Ahern had a habit of spinning out ministerial changes for months in order to keep his TDs on their toes, but Brian Cowen doesn’t have the luxury of time.
He is expected to do it sometime over the next few weeks, with the Green Party conference, on the last weekend of March, his deadline. By that stage, Green members will need to know whether there are any changes in the portfolios of their two Cabinet Ministers and they will certainly want to know the identity of their new Minister of State.
Trevor Sargent’s quick departure last Tuesday may have cauterised the deep wound suffered by the Greens, but the pain will be felt by the party for a long time to come. The circumstances in which the first leader of the party came to lose ministerial office has fuelled suspicions about their Coalition partners which, no matter how unfounded, will continue to fester.
Party leader John Gormley was in a highly emotional state in the immediate aftermath of Sargent’s resignation. While he later moved decisively to settle his party down, the episode was an indication of how quickly a real crisis could destabilise the Coalition.
On the Fianna Fáil side, the Taoiseach attempted to rally his party with a passionate speech at the Fianna Fáil national executive meeting on Thursday night. He called for unity of purpose in the organisation, and urged members to go out and sell the Government’s policies now that there was a clear strategy in place.
Unfortunately for the party, the verbal brawl at the meeting involving outspoken national executive member Jerry Beades, and Minister for Transport Noel Dempsey, obscured the Taoiseach’s message. The fact that Beades is regarded in the party as a maverick didn’t stop his intervention generating a great deal of media coverage.
Almost all Fianna Fáil TDs regarded the media attention given to the Beades row as utterly disproportionate, but it is a reflection of what happens to a government when it is on the back foot. That is a problem which both Coalition parties will have to contend with in the months ahead when they face into genuinely difficult problems.
One of those issues will be the recapitalisation of the banks and, in particular, the strategy adopted towards Anglo Irish Bank. While there is a reluctant public acceptance of the need to keep AIB and Bank of Ireland going, whatever the cost to the taxpayer, there is genuine anger and bewilderment at the prospect of further vast sums of money going into Anglo Irish Bank.
Fine Gael leader Enda Kenny has been hammering away at this point in the Dáil in recent times, and clearly regards Anglo Irish as the Achilles heel of the Government’s banking strategy. One of his Senators, Eugene Regan, has begun a campaign to highlight alleged links between the Taoiseach and the disgraced developers’ bank.
Regan, dubbed “the assassin” by Fianna Fáil opponents in the Seanad for the way he highlighted Bertie Ahern’s personal finances and Willie O’Dea’s false affidavit, has now trained his sights on the Taoiseach. He has called on Cowen to make a statement about his handling of the Dublin Docklands Development Authority when he was minister for finance, and about his relationship with Sean FitzPatrick, the boss of Anglo Irish. “He [Cowen] had responsibility for increasing the cap on borrowing which allowed the authority to enter into the disastrous deal on the Glass Bottle site, leaving it with a deficit of €213 million. The then taoiseach-in-waiting held a private meeting with Mr FitzPatrick and the directors of Anglo Irish Bank. This was not included in the public engagements list,” Regan told the Seanad.
The decision yesterday of the European Commission to approve Nama has cleared the way for the Government to proceed with its banking strategy. That was only the first hurdle, and the recapitalisation of the banks could involve a succession of even more difficult ones in the months ahead.
As bad as the banking crisis is, it is only one of the challenges facing the Government. Getting the public finances under control and bringing exchequer borrowing back down anywhere close to 3 per cent of GDP by 2014 will pose huge political difficulties.
Minister for Finance Brian Lenihan last night pointed again to the scale of the task, and repeated the necessity for resolute action this year and in the years ahead. While €4 billion of spending cuts in last December’s budget may not have been as politically destabilising as some people expected, the fact that the Coalition will have to repeat the dose twice more before the next election, if it runs its full term, sends shivers down the spines of Government TDs.
For the moment, TDs in both Coalition parties should enjoy the respite that the impending reshuffle gives them, because yet more really difficult political and economic decisions are not too far away.