Is an all-party emergency government the solution for our economy?

Economy, Guest Blog | Thu 21 May | Author – Business & Finance

Marc Coleman, economist and founder of Octavian Consulting, discusses Irish government formation and the potential need for an all-party emergency government

Another election, an unstable government of uncertain duration, or an all-party coalition. If we are lucky, these are not the only options facing us politically as we enter the next phase of the Covid-19 crisis. But so far, they look possible. Fourteen weeks since the general election – and ten since the start of the Covid-19 crisis – Fine Gael TDs can be forgiven for being wary of governing after an election that everyone told them they had lost.

But someone must govern. Coalition with Fianna Fáil will cost both parties significant losses and leave Sinn Féin the largest party in a subsequent election. Coalition with Sinn Féin might, for Fine Gael paradoxically, be a better option: Just as Fine Gael and the very Republican Clann na Poblachta worked in the mid-1950s, this “odd couple” arrangement might benefit from the fact that TDs from both parties – although very different in outlook – don’t fish in the same pool of votes. However, it is unlikely to happen: For both parties coalition would be anathema to the rank and file.

A Fianna Fáil-Sinn Féin coalition by contrast looks more compatible, but it would leave Sinn Féin badly exposed with three parties of the left outside government.

If for a year or two groupings of over 6 TDs in effect could temporarily suspend party politics and ideology and join together in an emergency government, this might help us overcome the worst of the crisis

And these are just three varieties of outcome. For each, a further decision tree is needed as none of the duos considered above will hold a majority and will need a top up from one of three other parties – Labour, the Green Party, Social Democrats and People Before Profit – or from Independents. Of these options, the latter might be the most stable: Independent demands for coalition tend to be localised, easier to afford, and produce more stability (without a party to back them, Independents are even more averse to an election than party backbenchers).

Is there an alternative? Danny McCoy put it neatly when he spoke of the need to “put the economy in deep freeze” in response to the unique challenge of the Covid-19 crisis. A similar exceptionality could be applied to politics. If for a year or two groupings of over 6 TDs in effect could temporarily suspend party politics and ideology, and join together in an emergency government, this might help us overcome the the worst of the crisis before “normal service” is resumed late next year. Civil servants are effectively running the country anyway, so ideological differences are giving way to practical management. But civil servants need and are entitled to Ministerial guidance.

This week, when one union representing civil servants expressed concern about bullying from Oireachtas members, it had a point: The more we go without a government, the more civil servants are left in the invidious position of having to take unpopular decisions without a mandate. Not that the civil service is not above criticism. As pointed out in a previous article, there is an urgent need to diversify the policy making experience, and perspective in policy making and in other arms of the state. But this observation is made on a collective not an individual level. On an individual level, no civil servant should be expected to tolerate criticism from an Oireachtas when the latter has not yet translated the recent election result into a new working government.

Time is running out. There is talk of an election, and maybe that is the only answer. But an all-party government that could temporarily suspends political rules of engagement should be considered as well.

Given the absence of a new government the public services response to Covid-19 has been salutary. But – largely given the lack of a new government – it has been necessarily incremental. Compared to Britain, where funding measures for business amount to over 13 per cent of GDP, or Germany, where the government has committed a staggering €978 billion to refunding German business (over one quarter of Germany’s mighty GDP), Ireland’s measures to refund business still need to be reach critical mass and cohesion necessary for the job at hand.

Time is running out. There is talk of an election, and maybe that is the only answer. But an all-party government that could temporarily suspends political rules of engagement should be considered as well. It would need honest brokers – Ibec and Ictu being critical in this regard. However, as it would remove any effective opposition in the Dáil, and as Ictu and Ibec do not represent the totality of the Irish economy, measures to ensure far greater diversity in policy making would need to be secured. This has to happen anyway as key parts of the voting public – sole traders, small businesses, taxpayers and others – have very weak representation in policy making.

At the end of the day, the strongest argument for this approach might be that Germany’s government – which although not all-party, certainly straddles centre-left and centre-right – appears to be leading Europe’s recovery with stronger than expected GDP performance in Q1 and a forecast rebound next year.