Why the Government of One of World's Best Economies May Lose Outby
Polls indicate that coalition may lose its majority on Feb. 26
Ireland risks bout of Portugese-style political instability
At a glitzy event at Dublin’s Guinness Storehouse to promote the Irish coalition’s jobs plan, Lorraine O’Connor stood alongside Prime Minister Enda Kenny and was presented as a living example of the government’s success in reducing unemployment.
There was only one problem: O’Connor, who has worked at the Storehouse since last year after a state-sponsored training program she describes as “really good,” said she didn’t plan to vote for Kenny’s Fine Gael party in the next elections. His government is just doing its job by helping the unemployed, she said in an interview last month.
“It’s the people who get them into their positions,” said O’Connor, who has always voted for anti-austerity party Sinn Fein and planned to do so again. “Sinn Fein would manage situations in a different way, that wouldn’t turn people against them. ” Ireland holds elections Feb. 26.
O’Connor illustrates a wider problem facing Kenny. While he presides over one of the globe’s best-performing economies, many voters feel the government deserves little credit or that the fruits of the recovery aren’t being shared equally. Though Kenny is still most likely to remain as prime minister after the election, his government is set to lose its majority, polls indicate, leaving Ireland at risk of Portuguese-style instability.
The government has done a “great job” in rescuing the economy, said Tony Smurfit, CEO of Dublin-based Smurfit Kappa Plc, in an interview. Still, if it is re-elected, “something they have to focus on is making it fairer for everyone. Taxes do need to reduce for a certain amount of people, at the medium to lower-end. ”
Under Kenny, Ireland has reclaimed its spot as the best-performing economy in the euro-region -- with an estimated expansion of about 7 percent last year -- after nearly collapsing following the global financial crisis. Unemployment has almost halved, and companies like Twitter Inc. and Google Inc. are expanding their Irish workforce.
Yet support for his ruling Fine Gael-Labour Party coalition is running at 36 percent, according to a Red C poll published in the Sunday Business Post on Feb. 14, down from the 55 percent the two parties captured in 2011 and from 41 percent a week earlier.
The decline in the coalition’s support reflects a “general disillusionment at the existing political system seen in many countries,” said Eoin Fahy, chief economist at Kleinwort Benson Investors in Dublin. In Ireland, while unhappy voters “are not supporting, en masse, a particular protest party, they certainly will not go out and support the incumbent government.
To win a second term, the two parties need about 44 percent based on historical patterns, according to Philip O’Sullivan, an economist at Investec Plc in Dublin. Anything below that will probably leave the government dependent on independent lawmakers or smaller parties.
Why isn’t the government more popular? For some voters, it’s the new water- and property-levies the coalition imposed to close the deficit. For others, it’s a failure to improve health and education, while many voters point to the inability to deal adequately with surging rents and increasing levels of homelessness.
Ratcheting up the campaign on Tuesday in Dundalk, north of Dublin, Kenny warned of a potential flight of capital should his government fail to be re-elected, the Irish Times reported. Throughout, he’s defended the coalition’s focus on the economy.
“Make no mistake; if we have no new jobs, there is no recovery and no investment in new services. It’s as simple as that,” Kenny told reporters in Dublin on Sunday. “Everybody wants to reduce taxes and invest more in public services, but without a growing economy and more jobs their plans are little more than wish lists.”
Lorraine O’Connor remains to be convinced. She studied youth work for three years, and was then unemployed between 2011 and 2014. She has worked at the Guinness Storehouse -- Ireland’s most popular tourist attraction -- for the last nine months, in the tasting room or teaching people to pour a pint.
“You can see a lot of changes, so they must be doing something right,” said O’Connor. On Kenny, she said, she wasn’t convinced he’s the man to run the country again. "He’s like any normal Joe Soap, very outgoing, very bubbly. But anybody can be like that."