Stephen Collins spells it out for the honest.


Mind you, the performance of the Opposition parties, the social partners and the various vested interest groups that influence public policy hasn’t helped either. All of them have refused to focus on the central issue, which is not the banks, bad and all as they are, but the unsustainable level of Government borrowing.

Former taoiseach John Bruton made a pertinent speech on the subject last week, pointing out that while the net liability of the banks will be a huge figure, it will be a finite one. By contrast, the gap between spending and revenue, which is running at 10 per cent of our GDP, is not a one-off figure and is inexorably multiplying the total amount we owe. “I would prefer if the energies of our lively economic ‘commentariat’ were devoted as much to how we can bridge that recurring gap as they are to the one-off banking liability,” said Bruton.

The ability of the Coalition to respond to the deteriorating situation with a coherent strategy, involving more than €3 billion in spending cuts and tax increases, and to then convince the public to accept the package, will be an enormous challenge. The Opposition parties will make it as difficult as possible for the Government. While Fine Gael and Labour accept the €3 billion figure in theory, going on previous performance they will be critical of almost every cut and tax increase that will make up the package.

Politically, they are probably right to assume the electorate wouldn’t thank them for spelling out what they would do instead, but it will make the problem even harder to solve.

That is why the sooner an election takes place the better. A new government with a decisive mandate would have a better chance of devising the kind of measures that are necessary, and of facing down the range of vested interests that will inevitably mobilise in response.

The difficulty is that unless the electorate is educated about the kind of choices that lie ahead, any alternative government could quickly find itself mired in confrontation with groups which have a naive belief that the country’s problems will be conjured away once Fianna Fáil is out of office.

The really worrying thing is that that belief might even be shared by many Labour and Fine Gael TDs. While it is difficult to predict precisely when the election will take place, it is hard to see the Dáil running full term until the summer of 2012, given the pressure of political and economic events.