were set for every Wednesday after lunch. Every meeting was held in the heat of crisis. Would the banks collapse? Would unemployment reach half a million or more? Would investment dry up? Would the ECB really insist on us paying over €3 billion a year to a dead bank? Time and time again we peered into the financial abyss, at the possibility that the State would become bankrupt.
Today’s meeting is no less urgent. No agenda has been circulated and the attendance is limited to ministers along with a few officials and advisors on a ‘need-to-know’ basis. The Governor of the Central Bank, Dr Patrick Honohan, has been invited to attend, and he sits to my right just beyond Secretary General David Cooney. What would we do if the euro collapsed?
How exactly would the Government manage such an eventuality? What exactly would happen on the morning after? We would have to close the banks, but for how long? For how long would ATMs continue to dispense euros?
How long would it take to re-establish the punt? How many days would it take to print notes and mint coins? How quickly would they get into circulation? And what would they be worth?
What would shops do in the meantime? How would workers be paid? And people on social welfare? What if the value of the currency changed over days or weeks? Who would be at the loss in the commercial transactions that occurred in the interval?
This is no idle academic discussion. We have to make practical plans for the chaos of a currency collapse and the uncertainty of launching a new national currency in a crisis.
I have the feeling that this is not the first time that Finance officials and the Central Bank have teased out the practical issues, but there are also wider social and political considerations – including the possibility of public panic and disorder – that we, as the Government, need to prepare for.
Legislation will have to be prepared and contingency plans put in place. And we have to be very careful to keep all of this confidential. One leak and we could be fuelling panic, and ourselves contributing to a monetary catastrophe.
Already, journalists are asking the awkward questions about the stability of the euro. Doorstepped at the EU Foreign Affairs Council in Brussels last Monday, I was asked if Ireland had a Plan B in the event of the euro failing. I dismissed the notion, because even to entertain the question was to give credence to the possibility that it might happen and risk making the situation worse.
But how do we describe the legislation we are drafting, so as not to cause panic? We can hardly have drafts of a ‘Bill to Relaunch the Punt’ floating around government offices! We agree, instead, to say we were working on emergency legislation to deal with the unlikely possibility of a flu pandemic!
CHAPTER 1
THE CALM AND THE STORM
The 2007 General Election resulted in a three-in-a-row victory for Bertie Ahern’s Fianna Fáil. Though he failed to get overall majorities in both 1997 and 2002, Ahern had put together coalitions with the Progressive Democrats and Fianna Fáil-leaning Independents, stable enough to see him through ten years as leader of the Government. The 2007 campaign began badly for Ahern, with his snubbing of the Dáil in a Sunday morning ‘dawn rush to the Áras,’ to call the election. Nonetheless, by polling day, there were enough ‘devil-you-know’ voters to enable him to cling to power, this time in coalition with the Greens.
Labour won twenty seats, one less than in 2002, and secured 10 per cent of the vote – roughly the same as in 2002 and 1997. My predecessor, Pat Rabbitte, was very disappointed with the results, and after the summer holidays decided to resign as leader. Mid morning on 23 August, he stood at the door of my fifth-floor office in Leinster House and told me that he had just called a press conference and would be announcing his resignation at 3 p.m. I tried to talk him out of it, arguing that he was doing a good job, but it was too late; he had made up his mind while walking the beach in Kerry a few weeks previously.
I then went for a walk myself around Merrion Square to get some perspective and try to decide what to do. Five years earlier in 2002, when Ruairí Quinn had resigned the leadership after an equally disappointing general election, I had delayed my decision to contest the Labour Party leadership and ended up being the last of the candidates to declare. My campaign never recovered from that procrastination. Pat Rabbitte convincingly defeated Brendan Howlin, Róisín Shortall, and me. I finished a poor third. Walking through Merrion Square on this occasion, and consulting with family by phone, I decided to throw my hat into the ring again and, this time, early on. My enthusiasm for it was tempered by my preference for Pat to stay on, but I was not going to repeat my error of 2002. I anticipated that Brendan Howlin would be the front runner, having finished second to Pat in 2002 and having previously lost out to Ruairí Quinn in 1997. During the afternoon, I rang Brendan, mainly because I had requests for TV interviews which I presumed were also issued to him. I felt it was too soon for us to engage in a media debate about the leadership, and we agreed to meet to discuss things the following morning in my office.
Whether we wanted it or not, though, the race was already on. Throughout the afternoon, I got several pledges of support from members of the parliamentary party, councillors and influential members. The most significant was the statement on RTÉ from Michael D. Higgins – who had nominated me in 2002 – that I should be the next leader of the Party.
When I met Brendan the following morning, he was still unsure. He had recently been elected Leas Ceann Comhairle of the Dáil, and was keen to serve the full term. I had known Brendan since we were student union presidents in the early 1970s – he in St Patrick’s, Drumcondra, and me in University College Galway. His late father, John Howlin, who was Branch Secretary of the Irish Transport and General Workers’ Union in Wexford, was always very kind and helpful to me during my early years as a trade union official. Despite being in different parties in those days, Brendan and I remained friendly throughout the years, and we eventually worked together to merge the Democratic Left and the Labour Party in 1998. Our conversation that August morning was, as always, very honest and open. Brendan was still thinking of contesting, but leaning away from it. He said he would decide over the weekend and call me on Monday. It sounded familiar: in 2002, Brendan had at one stage considered backing me, but ended up running himself. I still expected a leadership election between the two of us.
By Monday morning, I had secured pledges from most of the parliamentary party. Ruairí Quinn rang me on Sunday evening on his way back from a holiday in Connemara. I had difficulty hearing him as I was at the Festival of World Cultures on Dun Laoghaire seafront and his voice had to compete with the beat of a great African band on Sandycove Green, but I got the drift: he was going to support my candidacy.
Meanwhile, I had also assembled a campaign team, headed by Senator Dominic Hannigan, and as I approached Buswell’s Hotel to meet them for breakfast on Monday, I got the call from Brendan to say that he would not be standing, and that he would support me. He had suggestions and requests that I was happy to entertain, including that I should express no preference for Deputy Leader, and that Wexford should be the venue for the next Labour Party conference!
Later that morning I met Joan Burton. I knew she had been canvassing support to contest the leadership, and some members told me of their conversations with her. However, she told me that she had decided not to contest the leadership on this occasion and would be a candidate for Deputy Leader instead. She asked me to remain neutral in that election and I readily agreed to this.
So, within days, I was nominated formally by Willie Penrose and Michael D. Higgins, and elected unopposed as the tenth Leader of the Labour Party on 6 September 2007. It was unexpectedly sudden. I felt honoured and humbled to join the pantheon of Labour leaders including Connolly, Corish, Cluskey and Spring. But there was little fanfare. Press comment on the Labour Party itself was that it had ‘flatlined’ at 10 per cent, and that it was ageing. I was generally wished well, but there were few compliments.
