An Unhappy Holiday for Bertie

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Ireland Calling with John Spain

An Unhappy Holiday for Bertie

December 21, 2007

by John Spain

IT was not meant to be like this. The end of 2007 was supposed to be the time when Taoiseach (Prime Minister) Bertie Ahern would start coasting gracefully into retirement.

After presiding over the Celtic Tiger boom for a decade, bringing peace to the North and winning an unprecedented third consecutive term as taoiseach earlier this year, he should have been able to play Santa Claus this Christmas.

The end of 2007 should have been the time he embarked on a two or three year lap of honor before handing over to his chosen successor Brian Cowen.

In spite of a tribunal snapping annoyingly at his heels about small amounts of money he was given 13 or 14 years ago, the end of 2007 should have been the time when he started taking it easy, enjoying himself, touring the country to accept the plaudits of his grateful public.

It should have been ... but it wasn’t.

Instead 2007 has turned into an annus horribilis for Ahern, a horrible year when, apart from winning the election, everything he touched seemed to go wrong.

These days he has the look of a beaten man. He still tries to do the affable Bertie act, but inside clearly he is stressed and exhausted, and in the past few weeks that has been increasingly visible in his uncharacteristic outbursts of irritation.

He will have a brief break from his troubles this Wednesday when he joins his daughter Cecelia, actress Hilary Swank and a host of celebs for the gala Dublin premiere of P.S. I Love You, the film based on Cecelia’s best-selling novel. But his mind won’t be on the movie because the next morning he will be back before the tribunal to undergo further questioning about his personal finances.

So with Christmas coming, the year for Ahern is ending pretty much the same as it’s been for months now. You could say that 2007 has been the year when he has been the victim of that old Chinese torture, Death By a Thousand Cuts.

You can’t point to a single accusation or a particular revelation that was the killer blow. But all the minor allegations made against him have sliced away his credibility bit by bit.

Over the past year, these things have taken root in the public mind and taken their toll on the public goodwill towards Ahern. The continual surfacing of extra bits of murky information about loans and dig-outs has washed away the trust that people had in him.

The truth is that nobody believes his explanations anymore. It is clear now that he is a man living on borrowed time.

Nobody suggests that he was on the take on the scale of former Taoiseach Charlie Haughey. But Haughey was Ahern’s mentor, and it seems clear to many people at this stage that at least a touch of Haughey’s flexible attitude to money — in particular taking money from friends and acquaintances — rubbed off.

In spite of the rather pathetic attempts by the opposition to ratchet up the allegations by continually referring to the amounts of money involved in today’s values, the sums are small, adding up to between £50,000 and £70,000 Irish punts in total. A few thousand here, a few thousand there, supposedly from a wide circle of his buddies, all of whom wanted to help him buy a house in the aftermath of his marriage break-up.

Or that’s his story anyway. The problem is that it was all happening quite a few years after he had separated.

And it now turns out from the most recent evidence, for example, that he took those donations, around £16,000 punts, at a time when he not only had a substantial salary as minister for finance but had £70,000 in savings that we know about.

So the explanation that poor Bertie had nowhere to live and needed a whiparound by his friends to help him put the down payment on a new house is hard to believe. The fact is that £70,000 was more than enough to enable him to buy a house at the time. That is one problem.

The other problem is that the manner in which he received the donation from his friends, a pile of money collected in cash and discreetly given to him in a bar, is not what most people expect the minister for finance to be doing in his time off.

The whole business is very demeaning, particularly since Ahern is now taoiseach. The ongoing questioning is dragging the office of taoiseach into the mud.

For that reason most people now expect Ahern to call it a day sooner rather than later. It would be better for the party and for the country.

An early change to Cowen, who was too young to be part of the Haughey era and is seen as Mr. Clean, can’t come soon enough for most people, both inside Fianna Fail and in the country in general.

There is another reason why Ahern has fallen from favor, of course, and that is the much tougher economic situation we now face. Eaten bread is soon forgotten, and the feel-good factor of the Celtic Tiger is fast receding in the public memory. And without that to protect him, people are much more impatient and unforgiving about Ahern’s funny money.

The budget a couple of weeks back showed what we are up against. The property market has been in steady decline here for months now, and that is why Cowen moved belatedly to reduce the crippling level of stamp duty (sales tax) on house sales.

In fact the cuts he announced will be worth only around *200 million to house buyers in an average year. This is not a big amount in comparison to the total tax take from property sales, and if the cuts stir the moribund property market even slightly he will get the money back and maybe more.

Cowen can’t afford to be more generous. The overall problem that the budget had to deal with is the fall in economic growth from this year’s official estimates of 4.2% to next year’s forecast of 2.8%. That means less money for the state to spend on services, as tax revenues contract.

There has been a lot of media coverage here about the property stamp duty cut, because that’s what people talk about. But at *200 million it’s not that significant in comparison with what’s going on elsewhere to balance the budget.

This year there was a 13% increase in current spending, and Cowen has said that next year that will have to be held at 8.2%, saving him over *2 billion.

After all the dissatisfaction this year among voters about poor state services — inadequate schools, poor hospitals (epitomized by the recent breast cancer fiasco) — the going is going to be even tougher next year when there is less extra money available to pay for the extra services that people are demanding.

Even the changes in the income tax package (at a cost of*580 million) that Cowen announced pale into comparison with the *2 billion he will save by keeping the lid on extra spending.

As wages creep up a little, the tax changes were the minimum needed to keep workers out of the tax net or out of the top rate, depending on how much they earn. The gain for a typical couple was less than 1%, although it got slightly better for couples with children because of child benefit.

In a nutshell, no one here is going to feel much better off next year. That is the least of our worries, of course, because the Irish economy is one of the most open in the world and internationally the outlook is very bleak.

The key to everything is whether the U.S. will be able to squeeze inflation out of the system without having to raise interest rates to the level that will tip all of us into recession. It’s all about an awkward beast called Stagflation, and if you want to scare yourself look it up on Google.

Maybe Santa will come. We really need him this year.

Happy Christmas to one and all.

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