Irish political update – A bumpy start for the new government

How damaged is the new Taoiseach from last week’s sacking and what are we likely to see in the upcoming July Stimulus Package?

The beginning of Micheál Martin’s tenure as Taoiseach will be forever remembered now by the sacking of former minister Barry Cowen just 17 days into government. It has certainly been an eventful few weeks with backbenchers rejecting jobs, open discontent on the airwaves across the country from the overlooked, breaches of Covid-19 restrictions by a member of his EU team and then a drink-driving scandal that just would not go away. Not the start the Taoiseach had been hoping for.

Fianna Fáil in turmoil?

It is certainly a strange time for the party. Fractions are emerging such as the Jim O’Callaghan camp, the disgruntled old guard which can add Michael Moynihan to their ranks, and now former minister Barry Cowen who many feel was let down and unfairly treated. For a party with just 37 TDs, this is a dangerous place to be in.

What did happen between the hours of 2pm and 6pm exactly last Tuesday is still unclear as the Taoiseach made a very convincing speech defending his minister in the Dáil during Leaders Questions and then within hours sacked him. Those around Micheál have suggested that the file presented more than was being declared, however Cowen is still adamant that it was an unfair dismissal. A lot will be determined by the legal outcome of Cowen’s case against the Sunday Times and the probe into the Garda leak. Unfortunately for him or fortunately for Micheál, they are not expected anytime soon.

Looking at the immediate ramification, I do not see any. Too many in Fianna Fáil have worked too hard and for too long to bring down this government. Also, Micheál is almost untouchable. He knows he only has a two-year window as Taoiseach and, in the middle of a public health and economic crisis, very few will suggest changing the helm in the immediate future. For Micheál, it is now about leaving his legacy and in the course of doing that he is unlikely to care about maintaining friends in his parliamentary party or stepping on toes. What this week has shown is he will do anything to maintain the course of this government.

Looking more long-term, it is less likely that Micheál will be left in position as leader of Fianna Fáil once his tenure as Taoiseach is up. He has made too many powerful enemies and it now seems certain that some of those enemies will align to ensure he is not Tánaiste in 2023.

The new government’s first Covid-19 test

The decision made by the Cabinet to not open the pubs and enter phase four of the re-opening has been met with a mixed reaction. Most TDs broadly supported it, while acknowledging the disappointment of publicans in rural Ireland, however some vehemently opposed it.

However, the public reaction has been one of bewilderedness as commentators and those on social media question why it is the small rural pub, with the limited resource, that is being punished when the larger ones serving food in the towns and cities are prospering right now and attracting huge numbers. Questions are also likely to be raised next week as to why guidelines have not been published and if they were, would the government not consider allowing pubs to re-open on a strict basis.

Others that are hugely disgruntled are hotels and couples trying to rearrange weddings. For many couples this is the second time in a matter of months that they will have to rearrange their plans. Now numbers are unclear and the type of wedding they will be able to have in terms of serving alcohol at the bar after the dinner is unclear.

July Stimulus Package – what to expect

Next week is the first big economic test for this new government as the July Stimulus Package is set to be announced. While it is still unclear what it will contain in its entirety, we do know the following is likely:

Wage Subsidy Scheme – This looks set to be extended until at least Budget 2021 at which point it will be further reviewed. We also understand that certain anomalies will be changed to allow seasonal employers get access to the scheme.
• Restart Grant – It is likely that the value of this will be increased and the eligibility criteria widened to allow those that do not pay commercial rates such as Bed & Breakfasts to access the grant.
Credit Guarantee Scheme – This measure is being included in the Stimulus Package and is expected to now be offering 0% interest rate for the first year and longer lending terms in an attempt to address the liquidity concerns being raised. It is also understood that there will be no portfolio cap to lending to different sectors.

Looking ahead

With only two weeks to go until the Dáil goes into recess, the next period will focus heavily on the July Stimulus Package, on putting in place guidelines for schools and colleges, plans for phase four of the reopening of the economy and on the green list of countries for foreign travel.

A lot needs to be achieved within that timeframe and tensions are high, so it looks set to be an interesting two weeks.

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Aisling Cusack

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