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Risks of high political instability are being underestimated.

The leaderships of all three of the potential coalition participants – Greens, FF and FG – are in play. 

By Conor Lenihan.

An initial political risk assessment for Ireland now would rate the country as “unstable”. There is little happening at Leinster House that would re-assure external investors. It is over three months since the election and there is still no sign of a new government. 

The public indulgence will only last as long as Covid-19 continues to hang over the country as an existential threat. If the opinion polls are to be believed the public seem content to leave the incumbent government in place even though they voted against them in the election. 

Taoiseach Leo Varadkar has re-invented himself during the Covid-19 crisis. His steady appearances on television have converted him from the TV Anchor Man to the TV Weather Man. As we all know, sometimes the Weather Man gives solace and relief when you have just endured a bulletin diet of misery and bad news.

Varadkar’s new-found popularity has rendered Fine Gael activists the pleasing possibility that if they simply hang tough and string things out they might just be able to throw up their hands in surprised despair and call an election. For some of them the thought of sacrificing their big-farmer support on the altar of climate change, via the Greens, is a step too far in erosion of their most solid voting base. 

Leo Varadkar

My friends in the distanced Dáil inform me the coalition formation talks are proceeding apace and may well be completed by June, with a week or two further to get the endorsement of the three parties and their memberships. 

The Greens’ requirement for two thirds of those voting is a high jump given the extent of division within the party even at a parliamentary level. One can only imagine the level of disputation among ordinary members. 

The election itself threw up an indeterminate result and an intractable three-way split between Fianna Fail, Sinn Féin and Fine Gael. Beyond these medium-sized parties, are a number of smaller parties of varying sizes and ideologies and of course a plethora of independents. 

The decision by both Fianna Fáil and Fine Gael to exclude Sinn Féin by definition narrows the choices of the two, previously, big parties. Their requirement appears to be to favour the inclusion of the Green Party – with a bolt-on of independents to give greater comfort. 

The orthodox wisdom in Leinster House and among political analysts as that this Fianna Fail, Fine Gael and Green Party configuration offers the best hope of a stable administration to see the country through the twin crises of Covid 19 and an increasingly, threatening, hard exit of the UK from the EU. 

The other consensus viewpoint offered is that there will certainly be ‘trouble ahead’ as public indebtedness rises, amid high unemployment, with the traditional safety valve of emigration from the country is removed as a mitigating factor. The Franco-German axis that runs the EU, is openly promoting the idea of future harmonisation of corporate taxes – not good news for Ireland Inc.

Apart from these very obvious uncertainties there is in a more insidious threat to a stable coalition involving FF, FG and the Greens. The Greens are the only one of the three which actually increased their number of seats and with Sinn Féin could claim to have been winners from the results. albeit it might be argued they had the tail wind of a climate crisis and failed to capitalise on the ubiquitous desire for change. 

Nevertheless the reality is that in a normal election and political system this should be a cause of great contentment and happiness for the Greens – not so. Over the past two weeks there has been open warfare within the party and now the clear prospect of a leadership contest immediately after they select their portfolios and form their ministries. 

With a clear leadership contest on between Eamon Ryan and his Deputy Leader Catherine Martin this does not suggest  stability in government. Things, of course, are not much better when one surveys the vista for both Fine Gael and Fianna Fail.

While Fine Gael are stable on the surface and there is no immediate threat to Leo Varadkar, the likelihood is that he will be replaced within the first two years of any new coalition’s term. There are two clear contenders in Simon Coveney and Paschal Donoghue – both of whom presumably would like to take a big bite out of the Taoiseach Cherry when it comes to FG’s spin on the Wurlitzer.

In Fianna Fáil a barely concealed leadership struggle is already underway because of the belief that Micheál Martin is a lame-duck potential Taoiseach, on the way out. Party members who hate the idea of sharing power with their civil war antagonists are vocal in expressing the belief that Martin simply wants to have the word Taoiseach on his CV – without reference to the damage that it will do the party.

Micheál Martin

The party faces the prospect, much-feared within FF, of being sandwiched between an opinion-poll-led resurgence of Fine Gael and the undoubted prospect of further Sinn Féin electoral expansion, as its status as the main opposition party grows and grows. Set against this feeling is the hard-headed realism of those frontbench TDs who want a shot at being ministers after nine years in opposition.

Fianna Fáil has at least four who might consider themselves leadership contenders to succeed Micheál Martin – Michael McGrath, Dara Calleary, Barry Cowen and Jim O’Callaghan who has the perceived advantage of being from Dublin. None of these are making waves now given that the process of government formation is underway.

The basics here are simple – the current leaderships of all three of the potential coalition participants in the Greens, FF and FG are in play. In the Greens’ case, it is just more obvious than the rest. This is not a recipe for governmental stability as the hard choices come into view after the country starts to emerge from the Covid Crisis. There are also additional hard choices on climate change with or without the Greens in government.

It is pernicious for any government to endure personality-based feuds between over-lapping egos pursuing leadership agendas. 

Therefore a more empirical assessment of Ireland, in political risk terms, would downgrade the country’s rating to ‘highly unstable’. Mary Lou McDonald and her supporters must be chuckling at the possibilities to be thrown up for the opposition.

Conor Lenihan is a former Fianna Fáil Minister for Science, Technology and Innovation and currently works in the investment sector.