On the Edge in 2006

By John Spain

2006 WAS the year when we in Ireland were being told regularly that we were living on the edge. Whether it was the economy or politics or crime or the population boom or the decline of moral cohesion or a host of other issues that affect Irish society, we were told continually during 2006 that we were teetering on the brink.

On the brink of what was never made absolutely clear. But the postcards from the edge in the media made predictions that dramatic changes — changes for the worse — were about to happen.

As we end 2006 and start into a new year, however, we are still waiting for disaster to arrive. It is clear that major changes are indeed underway in Irish society, but it is even more clear that in spite of all our teetering on the brink, Ireland is not about to fall over a cliff and vanish into the Atlantic.

Things may never be the same again. But as the French say, the more things change, the more they stay the same.

Let’s take the economy first, because at the end of the day the issue that matters most is always the economy, stupid. 2006 was the year when the Celtic Tiger boom was finally supposed to end, followed by house prices falling and unemployment rising.

In fact the Irish economy continued to be a star performer in 2006, with a 5% growth rate and a jobless figure at just over 4% (still the lowest in Europe). This ongoing economic strength was reflected in the huge bonus in tax revenues which had flowed into the government’s coffers by the end of the year, giving Taoiseach (Prime Minister) Bertie Ahern billions extra to play with in the run up to general election in early summer.

Which brings us to politics. If Ahern wins the next election he will be the first leader to be taoiseach for three five year terms since the series of election victories pulled off by Eamon de Valera back in the 1930s and ‘40s. And they will be continuous, a spectacular three in a row.

Can he do it? At present, he seems well on course for victory. The country will be awash with money at just the right time as tens of thousands of people cash in their Special Savings Accounts, complete with the 25% government bonus paid to reward people for saving for the past five years.

And all the predictions are that the economy will still be performing well, even if there is a minor correction in property prices. On top of that, it looks like the North is also going to come right at the perfect time for Ahern, with Sinn Fein at last biting the bullet on policing, opening the door to power-sharing in a new Assembly and cementing the peace for the future.

Ahern is not home and dry yet, of course, and the electorate can swing around. Just six months ago, there was a mood of increasing dissatisfaction among voters here, depressed by the downsides of the boom like the traffic jams and the overburdened state services in schools and hospitals.

And on top of that the government was blamed for a legal mess-up over statutory rape which saw criminals walking free, at least until the Supreme Court got its act together. In the wake of that controversy the polls showed that, yes, the government could be beaten in an election and the Fine Gael-Labor alternative gained new confidence.

But that was short lived. y the end of the summer, the voters were realizing that they did not really want the untried Fine Gael leader Enda Kenny running the show and the poll numbers for Fianna Fail began to strengthen again.

And then came Bertiegate — the revelations that Ahern had taken cash from business friends while he was minister for finance to pay for expenses after his marriage breakdown. At the height of the frenzy, there was a day or two when the pundits were saying he was finished.

But, sickened by the media witch-hunt and the sanctimonious posturing of the opposition, the electorate not only forgave Ahern but punished his tormentors by giving Fianna Fail an incredible eight-point boost in the polls.

Since then, he has been unassailable. Even though most people think he was stupid to take the money, very few think any corruption was involved. As I said in this column at the time, Ahern’s modest lifestyle shows how ridiculous that suggestion is.

He screwed up, but it seems that most people here prefer their politicians to be flawed and human just like the rest of us. If anything, the whole episode strengthened his appeal as an ordinary guy, a man of the people. And unless anything else comes up, he seems likely to win his historic third time victory in the election this summer.

Even the traffic may be improved in time for the vote. The Port Tunnel — connecting the docks to the M50 ring road around Dublin — has just opened and will take thousands of trucks out of the city every day. It’s the longest urban tunnel in Europe.

Plus, there are plans for the government to buy out the toll barrier on the M50 which is blamed for adding to rush hour delays. And other major infrastructural projects are also on the way, as the government spends some of the tax revenue bonanza it has accumulated.

All told, therefore, it will be easy to come to the conclusion come election time this summer that things are pretty good (even if they’re not perfect) and that Ahern deserves to be taoiseach again.

The truth is, however, that things are far from perfect here. One aspect of this which was very visible in 2006 was the number of shootings on our streets as the drugs gangs settled scores and battled for dominance.

Twenty years ago, a gun murder here would be front page news for days. Nowadays they happen every second week and get only cursory attention.

As long as the druggies are killing each other, no one cares much. But the trouble is that innocent bystanders can get caught up in the mayhem, as happened a few weeks back here when a young plumber was shot because he may have been a witness to the assassination of a drug gang leader. He just happened to be doing a job in the wrong place at the wrong time and was shot so he could not identify the killers.

That provoked demands for action — particularly when it was revealed that so many of the drug gang members (including the suspected killers in the plumber’s murder) — had been given bail by the courts here over the past year or two. Once again the law was making an ass of itself, just as the Supreme Court had done in the statutory rape situation earlier in the year.

Of course the real need for change lies deeper. The sad truth is that the huge amount of money the boom brought us in recent years fueled a massive increase in drug use in Ireland.

The people who claim to be shocked by the shootings on our streets are often the same Celtic Tigers who are buying the cocaine to line up after their dinner parties. There is massive use of cocaine, cannabis and ecstasy right across Ireland now as people with money to spend indulge themselves at the weekends.

And of course they all buy from a really cool dealer who is a nice middle class guy like themselves, conveniently ignoring that he is just one rung down the ladder from a gun toting psycho who grew up the hard way here.

Until that middle class mindset changes, the drugs killings will continue because there is such a vast amount of money to be made by any young thug who can carve out a territory. Heroin is still the curse of the poorest areas, but it is cocaine that caused the spate of gun murders in 2006, and that is not likely to change much in 2007.

A less naive judicial system and more policing will help, but the one thing that will really make a difference on drugs — and many other things here as well — is less disposable income. In other words, an economic downturn. So will that happen in 2007?

Yes is probably the right answer. The real question is how deep the downturn will be.

The main state sponsored think tank here is the Economic and Social Research Institute, and it reported recently that a staggering one-quarter of all economy activity in Ireland now is based on construction, which accounts directly for one in eight jobs. The taxes raised from property also account for a big slice of the government’s recent revenue bonanza.

So if that sector has a serious downturn, there will be many people out of a job and less government resources to pay their welfare. And what will happen then to the immigrants, who now make up around 10% of the Irish population?

A property slowdown finally emerged here in 2006, but so far it is the soft landing that the government hoped for, with prices either static or just creeping up a few points rather than the double-digit hikes we saw at the height of the boom. But that could change.

International experts (like the OECD) say that house prices in Ireland are 15% higher than they should be, so a fall of over 10% in a short space of time is not impossible. That could have a sharp impact on the economy here, along with our increasing inability to compete with other countries for manufacturing jobs thanks to higher wages here.

But the real danger lies not within, but without. It’s not where I am — it’s where you are. The Irish economy is one of the most open in the world and many jobs here are provided by American multi-nationals based in Ireland.

Apart from that a big part of our economy depends on a healthy world trade sector. If there is a sharp fall in the dollar as the enormous debt beneath the American economy starts to be tackled, then the knock-on effects globally — and in particular here — could be severe.

So after a year when we said goodbye to Ireland’s best contemporary writer, John McGahern, and to our most venal politician, Charlie Haughey, we look forward to 2007, a year when Ireland and America both could be on the edge.

If it turns out like 2006, it won’t be too bad. Happy New Year to you all.