Short term politics… or, waiting for something, anything, to turn up…

Backroom in the SBP puzzles over the way in which this government has in its first eighteen months and more tended to overstate and exaggerate supposed ‘victories’ and ‘achievements’ in Europe in relation to restructuring debt. Consequently:

…the Irish government grotesquely [oversold] the results of that EU summit in late June which agreed that “it is imperative to break the vicious circle between banks and sovereigns”.

And…

This prompted Taoiseach Enda Kenny to talk of a “seismic shift” and Tánaiste Eamon Gilmore to speak of a “game-changer”. To date, it has been neither.
For starters, the EU had only agreed to that position at a conceptual level, with the details to be worked out later. The problem is that the devil is in the detail. Without detailed agreement, there might as well be no agreement. Thus, while EU economics commissioner Olli Rehn might have declared in June that there would be a detailed agreement come October, we are still waiting.

All true, all true.

But Backroom interprets this as being an example of a basic dynamic.

If the EU’s June resolution promises so little, it has to be asked why Kenny and Gilmore boost it so much. The answer lies in politicians’ tendency to take short-term political gains.
For most politicians, the long run is merely a series of short runs. Politicians can see their fragile careers come unstuck at very short notice. Think of how quickly Willie O’Dea disappeared from view after he was forced to resign his ministry in February 2010 , when the ramifications of a legal case blew up in his face.

I wonder though. I wouldn’t doubt that there was an element in that. But this government for all its faults isn’t entirely stupid. They are well aware of the fate of their predecessors (although the essential sidelining of FF as a political force has given FG in particular more space than it might otherwise have expected and the hope that it will remain the destination of centre and right of centre voters for the next Dáil. Perhaps it will but look at that FF level of support and consider how much of the electorate remains immune to its blandishments…).

But I suspect that as much a part of this was the sense that all the government had to do was hang on until the EU and others pulled the chestnuts out of the fire. They can, after all, read the data as well as anyone else and they presumably are aware that the current trajectory of economic policy for this state is unsustainable.

Thing is one also wonders whether this has been something of an historic error of perception because it would appear – and the Greek case would bear this out to some extent – that the level of tolerance of extreme socio-economic dislocation is actually much much higher than might have been expected from the EU/ECB (though to a notably lesser extent from the IMF). Frighteningly high to be honest.

That leaves the government positioned on the unforgiving territory of a possibly cosmetic ‘deal’ on debt which on closer examination will be largely meaningless in terms of its impacts on the state and citizenry.