PEADAR KIRBYPROFESSOR OF INTERNATIONAL POLITICS AND PUBLIC POLICY,

UNIVERSITY OF LIMERICK, IRELAND

ADJUNCT PROFESSOR, FACULTY OF POLITICAL SCIENCE,

UNIVERSITY OF ICELAND

FALL SEMINAR SERIES: EUROPEREYKJAVIK, NOVEMBER 11TH 2011

Towards a Second Republic: Irish politics after the Celtic

Tiger

The politics of collapse

Unlike Greece and Iceland, the Irish have not revoltedo Instead they used the ballot box in February 2011

Extent of Fianna Fáil collapse dramatic Few parallels around the world

o 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?

February 2011 election

Most dramatic change since independence:o FF had never got less than 38% of vote since 1932o 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

o Fine Gael largest party with 78 seats; Labour doubled to 37 seats

o 43% of vote to left-wing candidates: over 60 in new Dáil

Evidence of presidential election

Voted for president on October 27th

o Largest vote in history of state, over 1 million, to left-wing Labour candidate, Michael D. Higgins

o 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:o If recovery happens they may consolidate their

positiono If not, will FF make a comeback or will left gain?

Reform agenda

With hands tied by bailout, focus on political reformo 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

Constitutiono Discourse of ‘Second Republic’: re-founding the

institutions of the state

What is absent

Reform agenda very one-sided:o 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

Alternative models I

From neoliberal model to what?o 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

Alternative models II

Acknowledge challenges of climate change and peak oil: how affect options?o 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?

Role of EU

Paradox:o Never such an appetite for reform but state ‘in

receivership’o Is EU membership a help or a hindrance?

We make a more nuanced assessment of the ambiguities of membership:o Huge benefits but perhaps overstatedo Collapse makes us realise that EU couldn’t prevent

poor governance and ineffective regulation

EU contribution to our crisis

Many argue we never faced hard challenges of development:o 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

o Membership of euro created conditions for crisis: Easy liquidity allowed Irish banks lend recklessly Low interest rates fuelled bubble economy

EU contribution to solution

Eurozone crisis may help us if it can be resolved:o 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

regulationo All of these challenge basic tenets of Ireland’s

neoliberal model

A wake up call

For the first time, Irish people are being forced to choose:o Low taxes or decent public services?o Use EU to get grants or to co-ordinate policy also?o Allow markets rule or regulate for public good?

Angry with EU but we know we need them:o New government successful in regaining credibility

and winning support from EU partnerso Yet we face four more years of austerityo EU may yet sink us or help save us: future very unsure