Although they won't admit it, many Labour Party people were pretty happy until a few weeks ago. A deal on the prom notes, employment on the rise, every possibility that the country will confound the sceptics by avoiding the ignominy of a second bailout at the end of the year; in short, the real possibility that things could get better for a whole lot of people in the not too distant future.

Even the polls – 13-14 per cent may be portrayed as a “catastrophic collapse” by the press, but a drop of five or six percentage points in the first half of a Government term in the worst economic crisis in living memory didn’t seem all that bad to Labour activists. They had expected worse sooner.

Then came Meath East.

Suddenly, there is a crisis of confidence, near panic in some quarters.

There is talk of a need to re-examine values, to be more vocal in Government, to move away from the policy of cutting the budget deficit.

There is merit in some of this – but not much.

Most of all, at this time, Labour needs to stand and fight. It needs to refute the nonsense, which has become a mantra in some quarters, that it has broken its promises. It hasn’t, or at least none that matter. It needs to counter the notion that there is a serious alternative to what Labour is doing in Government. There isn’t.

It also needs to stop the infuriating tendency of some in the party to go along with the insinuations of its enemies that it is Labour which is responsible for the current mess and the measures which are needed to put it right.

It is not Labour’s fault that a quarter of a million people have lost their jobs. It is not Labour’s fault that over 100,000 people have emigrated. Labour didn’t cause the property bust or the banking collapse. Labour didn’t humiliate us all by going cap in hand to our European friends when nobody else would give us the money to keep the country afloat.

Nor can Labour be held responsible for the property tax, public sector pay reductions, cuts in health and education. All these measures were either implemented by the previous government or agreed by that same government with the only people willing to lend us money.

The case is made that Labour would be riding high now if it had stood back, let others clean up the mess and enjoy the electoral benefits of Eamon Gilmore being leader of the opposition. This is, of course, true, but it was also blindingly obvious when the decision to enter government was taken in the first place.

Not one of the Labour delegates who voted to enter government at its conference in 2011 thought it would make the party more popular.

They did it because they thought it was the right thing to do, and they were right. It would have been irresponsible, not to say treacherous, if Labour had abandoned its voters, and the country, to an unstable minority Fine Gael government with a mandate to destroy the public service and reduce welfare.

No doubt, Labour would like to be spending money, improving services, increasing benefits, building infrastructure and generally doing what social democratic parties like to do, but the country is simply not in that space.

Instead, Labour must focus on trying to safeguard public services and the public sector; on maintaining support for the less well off, both at home and abroad; on finding money to stimulate the economy; on reducing the deficit in the fairest way possible. It’s not easy, it’s not very satisfying and it’s not easily sold to an electorate which is badly bruised. But it’s also important work – work which affects the lives of many of our people.

What of Labour’s promises? Some of those promises, although not many, had to be compromised when the party won only half as many seats as Fine Gael. That aside, the discourse persists that Labour in Government is doing something completely different to what it advocated before the election. This is simply not true.

Labour’s manifesto in 2011 expressly admitted the need for cuts in spending. Eamon Gilmore repeatedly refused to commit the party to reversing the measures of the previous government. Labour never promised the sun, the moon and the stars. What it did promise was a fairer way and, we haven’t seen enough of that.

Deadlines have slipped on issues such as free GP care, the extension of the medical card and universal health insurance – but there is still time.

So, what of Meath East? In truth, the result is so spectacularly incoherent that it tells us very little about the next general election. Why on earth would people abandon Labour, ostensibly on the grounds that they are fed up with austerity, only to endorse the parties that enthusiastically embrace the same austerity?

In all likelihood, Meath tells us just one thing of lasting importance. It is that a significant number of people, presumably former Fianna Fáil voters, feel that a short period in the sin bin is sufficient punishment for bankrupting our country and destroying the lives of hundreds of thousands of our people. If that is the case, there is precious little that Labour, or anyone else, can do about it, at least not yet.

The next election is three years away, an age in politics. In the meantime, Labour should get on with the messy and unpopular job of saving the country, ensuring that it is done in as fair a way as possible. This may bring electoral dividends; it may not.

One thing is certain. If Labour descends into introspection, if it starts to believe the propaganda of its enemies and the whinging of some who would cast themselves as its friends, if it stops fighting its opponents and starts fighting itself, then it is surely doomed.

Derek McDowell is a former Labour Party TD for Dublin North Central