Junior coalition partners the Greens can also expect to be punished as incumbent parties take the blame for the fall of the Celtic Tiger economy over the last three years. The question is only whether the main opposition Fine Gael will win outright or more likely form a coalition with the Labour Party. The two parties joined together when the voters booted Fianna Fail out of office in 1973, 1981 and 1982. But in none of those elections was Fianna Fail hammered in a way expected on Friday week.If the latest opinion polls are any guide, Fianna Fail with 17 percent of the vote could end up winning with as few as 25 seats in the 166 seat parliament (26 with the sitting ceann comhairle (speaker) Seamus Kirk who is automatically reelected). Fine Gael on the other hand with twice as much support are favoured to take around 71 seats but could win as many as 80 putting them within striking distance of an unprecedented outright victory.
More realistically they will rely on Eamon Gilmore’s Labour to form a new Government. Some polls have shown Labour as the most popular party and Gilmore’s own profile has occasionally made him the most popular politician in the country. It is almost impossible for them to shrug off their mantle as junior coalition partners and it is difficult to see them becoming the largest party. But they will break another record, as they take more seats than Fianna Fail for the first time since de Valera first took FF to the ballot box in the 1920s.
The parallels with the 1973 election are most stark. By that time Fianna Fail had been in power for 16 years. Under the leadership of economic guru Dr T.K. Whitaker, Ireland had risen out of post-war penury during the sixties as standards of living and education rose. Innovative marketing launched the country as a world tourist destination and attractive taxation measures brought foreign capital to Irish shores. But with entry into the EEC, the collapse of the Bretton-Woods agreement and the looming oil crisis, old Irish certainties were changing. Despite the IRA Arms Crisis, Fianna Fail increased their vote in that election but lost power 73 seats to 68. Four years of Coalition austerity packages later, the voters forgave Fianna Fail and they won a landslide victory in 1977.
Since Fianna Fail last regained power in 1997, they have also presided over many boom years, perhaps the best yet. Successive tribunals found large-scale corruption was endemic, but voters didn’t punish them because they were doing well. Personal wealth exploded over the life of the Celtic Tiger, at its peak five years before and after the millennium. But risk taking also increased exponentially. Debts rose to match growing exports. By July 2008, the Irish Independent calculated the average household was borrowing €158 for every €100 earned. In the good times, which were just ending as that article was written, that didn’t matter. Equity was rising rapidly to match the debt and bankers were happy to allow their clients cheap credit to gamble on what seemed like unloseable odds. The banks themselves were equally reckless so weren’t in a position to call the kettle black.
But when the 2007 credit crunch on subprime mortgages became the 2008 Global Financial Crisis, everything suddenly turned toxic. The lines of credit that had sustained a long building boom suddenly dried up. With creditors calling in loans, previous paper-wealth disappeared in a moment as property prices collapsed. Consumer confidence was shot to pieces and nobody was buying.
This was probably bad enough to cost any government its job, but the Irish Government compounded its mistakes with its handling of the financial crisis. Initially their promise to keep the financial institutions solvent was deemed a successful ploy to stop a run on the banks. But when the extent of the debt they had guaranteed for was revealed, it was obvious the Irish were in too deep. Rescue packages from the IMF and the European Central Bank came as they always do – with strings attached. Austerity was the order of the day, leaving average voters with a bad taste in their mouths. Why should they suffer for the excesses of the moneyed class?
It’s tempting to think history will repeat itself in the way it did after 1973. The new FG/Labour government will be forced to continue austerity programs of the old government and will probably add a few of their own. The Minister for Finance will once again become the Minister for Hardship. But there are obvious differences from 1973 too. In 1973 FF were narrowly beaten, this time they will be smashed to pieces. This time too it may take longer for personal finances to recover to their 2000 highs, if ever.
Professor of Economics at University College Dublin Morgan Kelly predicts the crisis will mean the end of Fianna Fail / Fine Gael civil war politics and the rise of hard right parties looking for someone to blame. Sinn Fein may also provide an attractive nationalist alternative to voters that is not laden in xenophobia. No one knows what they really stand for beyond the impossibility of a 32-county republic. But Fianna Fail survived that handicap for 80 years so there is no reason that might not work for Sinn Fein too.