Towards a Second Republic: Irish politics after the Celtic Tiger

1. Towards a Second Republic: Irish politics after the Celtic Tiger Peadar Kirby Professor of International Politics and Public Policy, University of Limerick, Ireland Adjunct Professor, Faculty of Political Science, University of Iceland Fall Seminar Series: Europe Reykjavik, November 11th 2011

2. The politics of collapse • Unlike Greece and Iceland, the Irish have not revolted • Instead they used the ballot box in February 2011 • Extent of Fianna Fáil collapse dramatic • Few parallels around the world • But what is the longer-term impact going to be: • On the party system in Ireland? • On the Irish development model? • On Ireland’s place in the EU?

3. February 2011 election • Most dramatic change since independence: • FF had never got less than 38% of vote since 1932 • Always the largest party in Dáil and never out of power for more than one term • Vote down from 41% in 2007 to 17.4% in 2011 • From 78 seats to 20; now down to 19, none in Dublin • Fine Gael largest party with 78 seats; Labour doubled to 37 seats • 43% of vote to left-wing candidates: over 60 in new Dáil

4. Evidence of presidential election • Voted for president on October 27th • Largest vote in history of state, over 1 million, to left-wing Labour candidate, Michael D. Higgins • Yet maverick former FF figure almost beat him • Illustrates radical shifts but also great volatility • FF not gaining in polls and coalition parties maintaining support: • If recovery happens they may consolidate their position • If not, will FF make a comeback or will left gain?

5. Reform agenda • With hands tied by bailout, focus on political reform • Pledged to most radical reform agenda since foundation of state: • Greater powers to committees to hold executive to account • Radical reform of local government • Promise of constitutional convention to rewrite Constitution • Discourse of ‘Second Republic’: re-founding the institutions of the state

6. What is absent • Reform agenda very one-sided: • Complete silence on model of development: • Collapse revealed ‘regulation-lite’: how might state re-position itself? • Central role of property in Irish economy: how build a more productive indigenous sector? • Disturbing consensus on refusal to raise corporation tax • So how re-balance tax system to develop a ‘normal European system’? • Role of private banks: now in state hands but no discussion as to how state should build a banking system to serve needs of economy and society

7. Alternative models I • From neoliberal model to what? • We propose two options: • Support in civil society movements for a developmental social democratic model: • Less dependence on FDI, develop indigenous sector • More ambition to build better quality health and security systems • Address deep-rooted inequalities in society • Needs a more fair and effective taxation and welfare system • Trade union leadership are the ones most espousing this, little debate among left parties

8. Alternative models II • Acknowledge challenges of climate change and peak oil: how affect options? • We identify possibility of more ecological model: • This we name an ethical or ecological socialism: • Manage transition towards a steady state economy • Plan for less mobility and more local sourcing of resources • Needs a radical reform of taxation system to tax environmental ‘bads’ (carbon, pollution) • How to develop a state strong enough to impose severe limits on GHG emissions but held accountable by a vibrant democracy?

9. Role of EU • Paradox: • Never such an appetite for reform but state ‘in receivership’ • Is EU membership a help or a hindrance? • We make a more nuanced assessment of the ambiguities of membership: • Huge benefits but perhaps overstated • Collapse makes us realise that EU couldn’t prevent poor governance and ineffective regulation

10. EU contribution to our crisis • Many argue we never faced hard challenges of development: • Always privileged private interests over public ones: • Did EU allow this to happen? • Allowed us maintain low taxes while benefiting from high structural funds: Germans did our social investment • Free-ride with ‘soft options’ in a populist political culture • Membership of euro created conditions for crisis: • Easy liquidity allowed Irish banks lend recklessly • Low interest rates fuelled bubble economy

11. EU contribution to solution • Eurozone crisis may help us if it can be resolved: • It will require greater fiscal and economic co-ordination and oversight: • Put pressure on Ireland’s low-tax model, especially corporation tax • Also German proposals to harmonise labour laws • Need to curb excess of financial markets through greater regulation • All of these challenge basic tenets of Ireland’s neoliberal model

12. A wake up call • For the first time, Irish people are being forced to choose: • Low taxes or decent public services? • Use EU to get grants or to co-ordinate policy also? • Allow markets rule or regulate for public good? • Angry with EU but we know we need them: • New government successful in regaining credibility and winning support from EU partners • Yet we face four more years of austerity • EU may yet sink us or help save us: future very unsure