should assess its solvency on the basis of an estimate of nominal economic growth âof no more than 1 per cent per year for the rest of the decadeâ.
If we do end up with nominal growth of just 1 per cent a year then we definitely will be screwed. But, given how the Irish economyâs fate is so tied to global growth, presumably all the other peripheral Eurozone nations will be screwed too.
If we are to end up defaulting, surely it would be preferable to do so collectively with a number of our euro allies than for little Ireland to be the only guinea pig in what would be a hugely risky economic experiment where nobody has a clue what will happen apart from utter âhavocâ being created? For now at least, there is little choice but to go with the EU/IMF plan. If Patrick Honohan is right â and there are no more black holes in the banks â and if the economy can grow close to the rates set out in the plan, then our interest payments (which will account for between 25 and 28 per cent of total tax revenue) should be just about manageable.
Of course, they are two pretty big âifsâ and it would be stupid to believe otherwise. But there is no potential solution to the current crisis â however alluring it might seem â that doesnât involve a whole raft of what ifs and maybes. Weâre long past the point of doing the right thing. Itâs now about taking the least wrong option.
Tighter than a too-small bathing suit on a too-long ride home from the beach? Not this coming election!
2 January 2011
T hereâs no question that the next general election will be seismic in terms of its impact on the political landscape. But for all that, there has never been an election where there has been so little doubt about the make-up of the next government.
Opinion polls only really began properly in the early 1980s, so before that point, predicting the outcome of an election was the political equivalent of pinning the tail on the donkey.
Even with access to polls, the outcome has generally remained in doubt up to polling day and often far beyond that, as various government formations were contemplated.
The three elections in eighteen months in 1981 and 1982 were very close affairs, although the November â82 campaign could be clearly seen to be slipping away from Fianna Fáil from the off. In 1987, it was felt that Fianna Fáil would win an overall majority, but that didnât happen. Ditto two years later when a totally unanticipated Fianna Fáil-PD coalition emerged. The 1992 election could have led to the formation of various governments (and ended up producing two different coalitions).
The 1997 contest was, to borrow a phrase from Dan Rather, tighter than a âtoo-small bathing suit on a too-long ride home from the beachâ. The Rainbow coalition should have won but didnât.
Fine Gael was obviously facing meltdown in the run-up to 2002, but there was doubt as to whether the next government would be a Fianna Fáil overall majority or a combination of Fianna Fáil with the PDs or the Labour Party (with most analysts plumping for the latter). Five years later most of the same analysts were predicting a Fine Gael-Labour-Green Rainbow.
But this time around is different. Unless something truly extraordinary happens between now and March (and even then it probably wouldnât matter), the next government will be made up of Fine Gael and Labour. The only questions are: how huge will their majority be? And what will the break-down of seats be between the two parties?
As of now, it looks as if they will have 100-plus seats between them and that Fine Gael will have at least a 60:40 advantage â although both these assumptions could change significantly in the course of a campaign.
But what wonât change is the enormous prize on offer for the two parties. If they play their cards right, they have the potential to be in power for at least ten years (the
If we do end up with nominal growth of just 1 per cent a year then we definitely will be screwed. But, given how the Irish economyâs fate is so tied to global growth, presumably all the other peripheral Eurozone nations will be screwed too.
If we are to end up defaulting, surely it would be preferable to do so collectively with a number of our euro allies than for little Ireland to be the only guinea pig in what would be a hugely risky economic experiment where nobody has a clue what will happen apart from utter âhavocâ being created? For now at least, there is little choice but to go with the EU/IMF plan. If Patrick Honohan is right â and there are no more black holes in the banks â and if the economy can grow close to the rates set out in the plan, then our interest payments (which will account for between 25 and 28 per cent of total tax revenue) should be just about manageable.
Of course, they are two pretty big âifsâ and it would be stupid to believe otherwise. But there is no potential solution to the current crisis â however alluring it might seem â that doesnât involve a whole raft of what ifs and maybes. Weâre long past the point of doing the right thing. Itâs now about taking the least wrong option.
Tighter than a too-small bathing suit on a too-long ride home from the beach? Not this coming election!
2 January 2011
T hereâs no question that the next general election will be seismic in terms of its impact on the political landscape. But for all that, there has never been an election where there has been so little doubt about the make-up of the next government.
Opinion polls only really began properly in the early 1980s, so before that point, predicting the outcome of an election was the political equivalent of pinning the tail on the donkey.
Even with access to polls, the outcome has generally remained in doubt up to polling day and often far beyond that, as various government formations were contemplated.
The three elections in eighteen months in 1981 and 1982 were very close affairs, although the November â82 campaign could be clearly seen to be slipping away from Fianna Fáil from the off. In 1987, it was felt that Fianna Fáil would win an overall majority, but that didnât happen. Ditto two years later when a totally unanticipated Fianna Fáil-PD coalition emerged. The 1992 election could have led to the formation of various governments (and ended up producing two different coalitions).
The 1997 contest was, to borrow a phrase from Dan Rather, tighter than a âtoo-small bathing suit on a too-long ride home from the beachâ. The Rainbow coalition should have won but didnât.
Fine Gael was obviously facing meltdown in the run-up to 2002, but there was doubt as to whether the next government would be a Fianna Fáil overall majority or a combination of Fianna Fáil with the PDs or the Labour Party (with most analysts plumping for the latter). Five years later most of the same analysts were predicting a Fine Gael-Labour-Green Rainbow.
But this time around is different. Unless something truly extraordinary happens between now and March (and even then it probably wouldnât matter), the next government will be made up of Fine Gael and Labour. The only questions are: how huge will their majority be? And what will the break-down of seats be between the two parties?
As of now, it looks as if they will have 100-plus seats between them and that Fine Gael will have at least a 60:40 advantage â although both these assumptions could change significantly in the course of a campaign.
But what wonât change is the enormous prize on offer for the two parties. If they play their cards right, they have the potential to be in power for at least ten years (the
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