Much ruin and many regrets

The year 2010 will be remembered principally for two profound and far reaching developments in Irish politics.

The first was the application by the government to the IMF and the EU stability fund for emergency financial assistance to allow the normal operations of the state to continue next year. It was as stark an admission of failure by the government of Brian Cowen and John Gormley as it was possible to make.

The second major development of the year was a direct consequence of this failure.

The year now ending saw a historic decline in support for Fianna Fail, a decline which will become evident when the general election arrives in the first quarter of the new year.

Simply put, at the start of 2010, Fianna Fail was in second place behind Fine Gael, with a recovery in its fortunes possible, if unlikely. Today, the party is struggling to stay ahead of Sinn Fein and avoid a drop to fourth place.

This new reality in Irish politics - a destruction of a status quo eight decades old - is a truly historic development. Put simply, though Fianna Fail has dominated Irish politics since its foundation, that era is now over.

Much of politics and political debate, and the media coverage of it, is of the here-today, gone-tomorrow variety.

The passage of even a couple of weeks reveals supposedly big stories and scandals to be nothing of the sort. But events of genuine significance have peppered this past year.

Among them, when historians come to write the history of the period, these are the two things that will stand out for 2010.Their aftershocks, however, will continue to dominate politics in 2011. Never before have economics been so directly embedded in the political currents.

The arrival of the IMF in Dublin, in the unexpectedly genial shape of Ajai Chopra, was a signal moment in the economic and political cataclysm that has engulfed Ireland since 2008.

It was the moment to which all the excesses of the boom and the mistakes of the bust led; the moment when all the promises and assurances of the banks and politicians over the previous two years and more - promises of soft landings (copyright Brian Cowen), of ‘‘well-capitalised’’ banks, of turning the corner and of taking the necessary action (all copyright Brian Lenihan) - were exposed as hopelessly naive, or worse.

The announcement was made at short notice on a bitterly cold Sunday night, November 28.The shock felt by ordinary people was palpable, the humiliation for the country undeniable.

The Comical Ali-esque denials of ministers in the week leading up to the admission - the two principal exponents being now-departing ministers Noel Dempsey and Dermot Ahern - served only to fuel the public perception that the government had lost control of events.

The funereal demeanour of the Taoiseach and his ministers in the days afterwards suggested somebody or something had died. It had. The Greens’ announcement that the government had run its course, and that they would leave office in the new year, already looked inevitable in hindsight.

The deal subsequently struck with the IMF and the EU will constrain the Irish government’s ability to control its own affairs for at least the lifetime of the next government, and probably the next two administrations.

A detailed programme of oversight and reporting to external agencies will be the reality in future.

Irish governments will have to meet agreed and verified targets, or funding - the cash to keep the lights on, essentially - will be withheld.

The onetime ‘‘shining light’’ of Europe had become the spendthrift delinquent, bailed out after it ran itself into a brick wall. It was also an example of how not to govern.

As the banking reports published by Klaus Regling and Patrick Honohan in June made clear, the Irish crisis was a result of short-sighted economic policy by government and suicidal lending by banks. It was, in the devastating findings of Regling’s report, essentially homemade.

The weaknesses in the banks and doubts about Ireland’s sovereign ability to make good its guarantees led to unprecedented market pressures on Ireland throughout the autumn. By the time the Irish government admitted defeat and withdrew from the markets, the costs of borrowing had reached an eye-watering 9 per cent.

The markets were saying what the government refused to admit - not only were the banks bust, but they had bust the state too.

Even the bizarre cameo of the row over AIB staff bonuses at the end of the year served as a sort of a retrospective signpost for the whole thing.

The banks, avaricious and brazen; the government hapless and powerless, saying one thing one day, another the next.

We can’t do anything about it, the government pleaded - until suddenly, a few days later, it discovered it could.

The bankers remain convinced they will be paid.

KENNY AWAITS

Enda Kenny stands poised to take over the Taoiseach’s office.

Few would argue that he has risen in the midst of a crisis to seize it. Rather, it will fall to him because he has stayed standing, the great survivor.

Perhaps he is the most underestimated man in Irish politics.

He is certainly the most resilient. He survived the abrupt resignation of George Lee from the Dail, but despair (not too strong a word) about Kenny among his own continued to simmer until his own TDs turned on him in the desperate belief that they had to do something.

At first, the heave seemed irresistible. However, it soon became apparent that it was amateur hour.

The rebels had everything going for them, including momentum, but Richard Bruton simply waited for the prize to drop into his lap, rather than seizing it. And they reckoned without Kenny’s willingness to fight tooth and nail for the prize, his calmness under fire, his political guile. Thanks to these qualities, and to the belligerence and cuteness of Phil Hogan, his right handman, Kenny survived. Amazingly, he does not seem to have suffered lasting damage from the affair. Fine Gael ends the year on course to lead the next government - but not to dominate it.

In Fianna Fail, the coup never even materialised. From the very start of the year, Cowen’s backbenchers grumbled and conspired. ‘‘Communications failings’’ was the phrase most commonly used about him, as if the government’s and the country’s problems could be solved by smiling more during interviews and speaking in English.

Mind you, it wouldn’t have done any harm.

The decline of Fianna Fail was led from the front by its leader, for whom 2010 was truly an annus horribilis. It supplied the nation with a moment that seems destined to be as frozen in time as the Taoiseach’s response to the crisis: his disastrous Morning Ireland interview in Galway a few hours after the party finished.

The party was finished in more ways than one.

Until the full realisation of the failure of the government’s response to the banks’ self-immolation, Brian Lenihan seemed the man most likely to replace Cowen. Certainly, the man himself didn’t say anything to backbenchers which would disrupt their belief that he could be an electoral messiah.

His personal fortitude in his battle against cancer - revealed a year ago - has been immense and exemplary.

His banking policy, however, has been a series of disasters. Perhaps the banks were unsalvageable from the beginning of the crisis. If they were, the wide-ranging bank guarantee of 2008 was the biggest policy mistake that any Irish government has ever made. At the last count, the cost of paying Anglo-Irish Bank’s debts will be some [euro]35 billion. It’s not clear if this will be enough. Its chairman, Alan Dukes, isn’t sure.

More than anything, more even than his continued declarations that Ireland had ‘‘turned the corner’’ or that the recovery had begun, it was the unravelling of the banking policy that has so damaged Lenihan’s credibility this past year.

A year ago, he was the man touted as the one possible saviour of the government and perhaps the country. Now he sounds exactly the same as the others. A leadership contest in Fianna Fail will certainly come, perhaps before the election, if not afterwards. Lenihan and Micheal Martin are the two names which most TDs consider to be in the frame. In reality, there may not be much left to lead.

Unusually, a rash of resignations began the year. George Lee went.

The least likely minister to resign because of an ethics violation - Trevor Sargent - was forced to resign because of an ethics violation.

Then there was Willie O’Dea, who made slanderous allegations about a Sinn Fein councillor and then mistakenly swore an affidavit denying the comments.

Fortunately for O’Dea, the reporter had the minister’s comments on tape, so he was able to avoid misleading the court and a possible miscarriage of justice. Nonetheless, the Greens insisted that he go.

A minor reshuffle ensured, which demonstrated the increasing leverage of the smaller party - Ciaran Cuffe and Mary White were both made junior ministers, leaving four ministers, one ex-minister and Paul Gogarty making up the Greens’ Dail ranks.

An even bigger clutch of retirements closed the year.

Dermot Ahern and Noel Dempsey announced that they would not contest their seats, while a succession of TDs - including Beverly Flynn, the ‘‘class act’’ once tipped for high office by her father - chose to avoid the ordeal that the general election will surely bring.

LABOUR RESURGENT

As Fianna Fail candidates bow out, Labour Party leader Eamon Gilmore searches frantically for runners. Labour is playing catch-up with its increased support, trying to find candidates to capitalise on the possibility of winning additional seats in, well, pretty much everywhere.

Labour closed the year with a poor few weeks and a hit in the polls, but that shouldn’t mask the fact that 2010 was a breakthrough year for the party - a year when Gilmore looked like the leader of the opposition and when Labour firmly overtook Fianna Fail to become the second most popular party.

Labour’s surge was built on its aggressive and often populist criticism of the government, on its opposition to the bank guarantee in 2008, and on the personal appeal and performances of Gilmore. His charge of “economic treason” against Brian Cowen in the Dail in March was one of the highly-charged political moments of the year.

The Taoiseach, who understands that, in politics, words are weapons, visibly winced.

In some polls, Labour was the number one party, and the intoxicating prospect of a Labour-led government and a Labour Taoiseach became a realistic one.

That possibility has now receded somewhat, but the forthcoming election still presents an historic opportunity for Labour. Gilmore still has the attention of many voters, though he has yet to figure out how to bring them home.

Labour is challenged on the right by Fine Gael, and on the left by a resurgent Sinn Fein, for which 2010 suggested at last that the economic crisis could be the catalyst that moved the party beyond the margins of politics in the Republic.

Two people are crucial to Sinn Fein in this endeavour, Gerry Adams and Pearse Doherty. Both made significant impacts on Irish politics in late 2010, Doherty with his victory in the Donegal South West by-election and Adams with his declaration that he would contest the next general election in Louth.

Of the two, the arrival of Doherty may prove to be the more significant in the long run. Adams is still there because the party has not found anyone to replace him, or to champion the party in the Republic. However real the prospect of Mary Lou McDonald doing so, it has been fatally undermined by her own electoral defeats.

But Doherty could be the real deal. The coming year may tell whether he is merely an effective spokesman, or whether there is real substance and responsibility behind the political abilities.

Urgent Appeal