absence of a meeting of Party Leaders, I intended to raise the issue during Leaders’ Questions. He pleaded with me not to, arguing that the Oireachtas Commission was where it should be addressed. I told him I considered it to be too serious at this stage to be passed on to a private committee meeting. It would be unthinkable, I told him, for the opposition not to raise it. He rang a second time pleading with me not to proceed, but again I refused, saying I believed the matter would not go away even if it was referred to the Commission.
In the Dáil, I asked the Taoiseach if he and the parties in government still had confidence in the Ceann Comhairle. The Taoiseach was visibly uncomfortable in his response, and said he regretted that I had raised the issue on the floor of the House, and that it should go to the Oireachtas Commission. He said nothing about the issue of confidence. It was hardly a ringing endorsement for O’Donoghue.
In response, I faced the Ceann Comhairle and said, ‘I regret to say this, but I consider that your position is no longer tenable. I think you will either have to resign or be removed from office. Following the order of business today, it is my intention to meet with my colleagues in the Labour parliamentary party and to recommend to them the tabling of a confidence motion.’ The die was cast. Later that evening O’Donoghue announced his intention to step down. I felt no sense of achievement or satisfaction. It was a necessary outcome, but travelling home that night I felt bad about what I had had to do.
Meanwhile, the economy continued to worsen. The Government was concentrating on the establishment of the National Asset Management Agency (NAMA). Shortly after the budget in December, Brian Lenihan was hospitalised. On 21 December he rang me from his hospital bed to consult with me about the membership of the NAMA Board of Directors, which he was shortly to appoint. He sounded in great form and joked with me about some of the contents of a book about the Workers’ Party, The Lost Revolution, which had just been published. After Christmas, I saw him at Justin Keating’s funeral on a snowy morning at Keating’s farm in Ballymore Eustace. He struggled bravely with his illness and I was truly saddened to hear of his death while I was on an Irish Aid mission to Tanzania in June 2011 and I attended his funeral on my return.
The endgame for the economy came quickly. Ireland’s bond spreads over Germany’s began to widen, as Ireland found it more expensive to borrow on international markets. Greece’s entry into a bailout programme gave rise to speculation that the International Monetary Fund (IMF) might step in and assume control here. But whoever heard of the IMF being called into such a prosperous, developed European state? Few took the prospect seriously, including some Fianna Fáil ministers who appeared on television saying they had heard nothing about Ireland making an application for a bailout. Within the week, however, the Governor of the Central Bank, Dr Patrick Honohan, was on RTÉ’s Morning Ireland telling a shocked nation that the Government intended to apply for a ‘programme of assistance’.
My first meeting with the Troika was on Thursday 25 November 2010 in the Labour Party parliamentary party room in Leinster House. A.J. Chopra of the IMF was accompanied by the other two members of the Troika (IMF, EU and ECB), Istvan Szekely from the European Commission and Klaus Masuch of the European Central Bank (ECB). With me were Joan Burton, Ruairí Quinn, Brendan Howlin, Pat Rabbitte, Colm O’Reardon, Mark Garrett and Jean O’Mahony. The meeting had been requested by the Troika. They wanted to brief the Labour Party on the contents of the bailout programme and how it would work. A.J. Chopra had a kindly bedside manner. The Irish economy was ill, was his line, and while a certain adjustment (11.9 per cent) had already been made, more was required. The financial sector needed to be ‘re-organised’ and ‘de-leveraged’ over a period of time. The public finances needed correction and it all needed to be done and done thoroughly.
We were conscious that within months we might be in government having to work with the Troika, so we were keen to explore what scope there might be for flexibility and for renegotiation of the programme. We emphasised the need for jobs and growth. They seemed positive about this and expressed confidence in the future of the economy, provided, of course, that the required corrective measures were taken.
We met them again on Tuesday 30 November, when they set out for us the deal which they had agreed with the Government, as defined in a series of official documents: a letter to be co-signed by the Minister for Finance and the Governor of the Central Bank, and a Memorandum of Understanding with all three institutions (IMF, EU and ECB), detailing the conditions for the loan finance being provided. The latter would indicate how much the State could spend on different programmes, what savings had to be made, what new taxes were to be raised, and what structural reforms were to be implemented. The programme would be supervised by Troika officials in Dublin, and the senior executives would visit every quarter for a review. Meanwhile, there would be a requirement for Ireland to report (sometimes weekly) on the measures being taken.
There, in the Labour parliamentary meeting room, between a mural based on the French Revolution and the 1916 Rising on one wall, and portraits of Labour Leaders back to James Connolly and Jim Larkin on the other wall, we were being shown how Ireland was in the process of losing its economic sovereignty. Being told so by the representatives of the economic institutions who were, in effect, taking charge of our affairs. As Ruairí Quinn put it, ‘the country is now in receivership’.
The documents now being agreed by the Fianna Fáil/Green Government would constrain the State, and of course the next Government, until the end of 2013. With Ireland no longer able to pay its way, and turning to the ‘lenders of last resort’, the conditions were bound to be onerous. To my mind, the worst was the interest rate. The institutions would borrow on the open markets for 22 per cent less than the rate at which they were lending it to us. I felt strongly that this mark-up or profit amounted to exploitation, and even a humiliation. I was determined to play my part in having these terms re-negotiated.
We used the two meetings to sound out where there might be flexibility, and we detected marginal differences in the attitudes between the Troika representatives. The IMF seemed the most reasonable. The European Commission, representing the Union, seemed to view us as errants in need of correcting. (Over time, the relationship with the Commission did improve.) The ECB was a bank, and behaved like a bank: Ireland was in debt; they were giving us credit based on terms; and we would have to stick to those terms.
One issue on which the Troika was insistent at these meetings (presumably because they were talking to the Labour Party) was privatisation. ‘We are keen to move on this,’ they told us. And when we pushed back, they countered by stating that Europe was putting up the money to keep us going. ‘Ireland is one of the richest countries in the EU. How much are you putting up yourselves?’ Such thinking was unacceptable to us. It was clear that our priority in government would be to re-negotiate the deal and to maximise flexibility.
As Christmas 2010 approached, there was a sombre and worried mood throughout the country. Uncertainty prevailed. What would the future hold? For jobs? For businesses? For families?
In the run up to Christmas every year, the Labour Party Leader hosts a drinks reception for staff, press and active members of the Party. It is normally held in the members’ restaurant in Leinster House a couple of days before the Christmas recess. This year there was no mood for celebration, and the public would hardly tolerate the idea of politicians celebrating while the people were suffering and the country was losing its economic freedom. We cancelled the Christmas party.
CHAPTER 3
ELECTION CAMPAIGN
On Monday mornings, I held my constituency clinic at Park House, a small community centre on Library Road in the centre of Dun Laoghaire. Since becoming Party Leader, my conversations there with constituents about their housing, social welfare or other concerns were sometimes interrupted by phone calls from our press office or head office. On Monday 22 November, 2010 one such call came in from Tony Heffernan to tell me that the Leader of the Green Party, John Gormley, had just said that a general election should be held early in the New Year.
