Hope and disillusion

The gloom created by the loss of 300,000 jobs following the economic crash of 2008 is unlikely to dissipate any time soon. But green shoots have appeared in industry during the past year and exports have grown.

Preparations are being made to exit the EU-IMF bailout programme; a deal has been done on the Anglo promissory note; the bank guarantee has been revoked and EU undertakings to provide a deal on our sovereign debt are being pursued. On its second anniversary, the Government can claim credit for these positive developments, even if their incremental nature has affected public appreciation.

Widespread resentment over the terms of the EU-IMF programme, with enforced reductions in living standards and continuing high unemployment, has brought massive shifts in political support. Recovery in the opinion polls by Fianna Fáil, whose policies in government contributed to the depth and nature of the recession, has been one of the most striking developments. It now leads the political field but, with only 19 Dáil seats, it is in no position to threaten the Government’s survival. Fine Gael has slipped into second place while the Labour Party languishes behind Sinn Féin.

Two years on from what was promised to be a transformative election and voters have become disillusioned. The unprecedented scale of the Dáil majority enjoyed by Fine Gael and the Labour Party has generated internal complacency and dissent. The number of Dáil defections may grow as legislation on abortion is introduced, public spending is cut and taxes are increased. Full-blown panic is unlikely until after next year’s local elections when the strength of would-be Dáil competitors can be assessed. In the meantime, there is reason for hope.

“The most encouraging economic news in half a decade”, was how Irish Times economics editor Dan O’Brien described the employment and unemployment figures for the final six months of 2012. His comment will have soothed Government nerves. Putting an additional 10,000 people to work may seem of little consequence when 400,000 people are still drawing unemployment benefit.

Apart altogether from the human and social impact, however, the figures represent an economic upturn that can be accelerated through rising exports and a new EU youth employment scheme that has been agreed under the Irish presidency. It will not be easy for the Government. Economic developments are unlikely to translate into early, popular support. Ireland has received favourable EU treatment for meeting its fiscal targets. The last major hurdle in that process will involve cutting expenditure under a new Croke Park deal. Success, or otherwise, on that front is likely to colour its public image for years to come.