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Time to take Kenny and Noonan away

The election of Donald Trump is just the latest headache for an already precariously balanced Irish government. The election of the man whose words were described as ‘racist and dangerous’ by Enda Kenny just a few months ago does not in itself pose an imminent threat to the Taoiseach’s political survival but it certainly intensifies the political and economic uncertainty already heightened by Brexit.

While most Irish people would agree with the sentiments expressed by Kenny during the US election campaign in response to Trump’s consistent attacks on immigrants, women, minorities and the disabled, it may not have been, in hindsight, the cleverest thing in the world for the Taoiseach to express such forthright opinions about a possible incumbent of the White House.

No wonder he was on the phone to ‘The Donald’ less than twenty-fours hours of the shock US presidential result to ensure that the door will still be open when he brings the bowl of shamrock to Washington in March.

It would not be so awkward for Kenny if he was not already under pressure to set a date for his departure as leader of his party and the government. And it will have to be both, despite the kite he has recently flown about staying on as Taoiseach while relinquishing the leadership of Fine Gael.

He has already claimed at various times that his experience is needed to navigate the turbulent waters following Brexit but he can’t have any such illusions about the impact of the latest international shock to the Irish economy from the promised Trump era.

The most immediate is Trump’s promise to reduce domestic corporation tax from 35% to 15% with its inevitable consequence for Irish tax revenues from multinationals but others include his threat to deport undocumented immigrants and to place obstacles on young people making study and work trips to the States. Not to mention the knock-on effect of his victory for the election of extreme right-wing forces in France, the Netherlands, Italy and possibly Germany if the refugee flow persists, over the coming year.

Time to take Kenny and Noonan away
Kenny knows he is hanging on by a thread and the rival contenders for leadership will almost certainly intensify their campaigns in the new year with the expectation of a contest by late Spring, if not before.

Neither can Michael Noonan expect to receive any retrospective laurels from his cringe-making welcome for president-elect Trump on his arrival in Shannon in 2014. Whatever about Kenny the finance minister is a political dead-man walking, for a number of reasons.

In the week before Budget Day in October, according to a number of flies on the wall in Merrion Street, there was the usual flurry of activity and panic in the Department of Finance as the big day approached. Except the nerves of officials were frayed, not by the well flagged budget, but by the minister’s date with the Public Accounts Committee days later where his role in the Project Eagle affair was to come under scrutiny.

Noonan had been informed by NAMA executives, in March 2014, of the dodgy fee payments associated with the planned sale by the agency of its £5.6 bn Northern Ireland property portfolio to US fund, Pimco. While Pimco withdrew from the sale on the advice of its compliance team the sale went ahead to Cerberus who paid just £1.24bn for the commercial and property assets just weeks later.

Although he protests otherwise, Noonan could have made known his reservations about continuing the sales process in the light of the shocking information about backhanders to legal and other insiders, including a former advisor to NAMA, but did not do so.
It then emerged that Cerberus was represented by US firm Brown Rudnick, the same law firm that acted for Pimco. And that Brown Rudnick along with Belfast solicitors, Tughans, and a number of others including Frank Cushnahan a former member of the agency’s Northern Ireland Advisory Committee (NIAC) were due to receive £15m between them in success fees from Cerberus for their assistance with securing the deal. Former NI first minister, Peter Robinson was also named a possible recipient in the arrangements.

At the early October meeting of the PAC, Noonan defended his position and argued that he was not legally empowered to interfere with the NAMA sale. He rounded on committee members, notably Mary Lou McDonald of Sinn Fein, who clearly got under his skin when she questioned his failure to intervene. He tetchily reminded her that her colleague, Martin McGuinness, the deputy first minister had not expressed any concerns over the recommendation of Cushnahan as a member of the NIAC by former Stormont finance minister, Sammy Wilson in 2010.

He told Fianna Fáil members of the PAC that it was their man, the late Brian Lenihan, who had passed on Cushnahan’s name to NAMA as an appropriate appointment to the NIAC at the time.

However, nothing could disguise Noonan’s discomfort at being subjected to detailed questions about his role in the controversy over his hours of evidence during which he was accused of bluster by McDonald.

His reputation as a financial guru who has safely steered the ship through the Troika years into economic recovery has also been severely dented not least by his miscalculation of the available ‘fiscal space’ or financial reserves in the Fine Gael election manifesto earlier this year and over his dithering on the question of the massive tax avoidance by US multinationals and vulture funds.
When the full extent of the climb down in the face of the Garda threat of all out strike became known on the eve of the mass walk out by AGSI and GRA members of the force, Noonan commented that he was taken aback by the potential €50m-plus cost of the eleventh-hour deal proposed by the Workplace Relations Commission.

But nobody, in government not to mind opposition, believes that the finance minister would not have been aware of the concessions on pay, overtime and allowances given to the Garda to avert their industrial action. Whatever about secondary teachers, Fine Gael in government was determined to protect its law and order credentials no matter what the cost to its public-service pay strategy.
The bill is potentially huge and the most immediate threat to government stability and finances. The debacle has incensed the most ambitious of those keen to take over as party leader, Leo Varadkar, who has insisted that none of the monies to pay for expected public service pay restoration will come from his social-welfare budget allocation, a view echoed by most in cabinet.

Negotiations with the Public Service Committee of the Irish Congress of Trade Unions will commence early in the new year on a new deal to replace the now-holed Lansdowne Road Agreement not least to avert a series of pay and other claims from nurses, junior doctors and others who are tempted to follow the lead of the guards. They will also have to ensure that provisions in Lansdowne Road to protect thousands of low-paid health, local authority and other workers from outsourcing, an agenda never far from the bureaucrats in government buildings, are maintained in any new deal.

Public-sector pay is not the only storm on the horizon with the deepening crisis in the health system ready to engulf patients and hospital staff over the winter months, the continuing housing and homelessness scandal, more of the annual flooding that ruins the lives of so many people in the west and south and the inevitable tantrums that emanate from nervous members of the Independent Alliance who are keeping the weak coalition in power.

Then of course there is the problem of Fianna Fáil, which knows that it can only keep this government on a life machine for so long until it realises that its electoral prospects are being more damaged than protected by the so-called confidence and supply arrangement. Many of its TDs are nervous of the consequences of agreeing a second budget with the government given the lack of any bounce it received from the minimal improvements in social welfare, tax and other benefits from the first one of three they are tied into.

Micheál Martin and his troops also know that one of their strongest cards as they face into any new election is Enda Kenny. If Fine Gael replaces Kenny (along with Noonan, most likely on health grounds), with a new, younger leader then all bets are off. Like Bertie, a trip to Washington for St Paddy’s Day may be the Mayo man’s swan song with an election to follow within months. The sooner the better, you might say.

By Frank Connolly