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Leo Varadkar early favourite to succeed Enda Kenny

by Frank Schnittger Fri May 19th, 2017 at 03:54:56 PM EST


Simon Coveney and Leo Varadker, chief rivals to replace Enda Kenny.

Enda Kenny has finally resigned as leader of Fine Gael some months after it became clear his days in office were numbered following Fine Gael's disastrous performance in the 2016 General Election. Leo Varadkar has become the early favourite to succeed him as Leader of Fine Gael and Taoiseach or Prime Minister of Ireland.


Enda Kenny leaves office not without some considerable achievements to his credit: Irish unemployment has declined from 15% in 2012 to 6% now, Ireland's debt to GDP ratio has declined from 120% to 75% and growth is averaging about 5% p.a. when one excludes the distorting factor of Global corporates like Apple moving their assets around to avoid tax or other risk factors.

In addition, the referendum on Marriage equality was passed under his watch, His government legislated for at least some rights to abortion in restricted circumstances and he has been forthright in condemning the Vatican for its complicity in covering up child abuse in Ireland.

In Contrast, Leo Varadker, and his chief rival, Simon Coveney, do not have a distinguished record of achievement as Cabinet Ministers to their name. Leo Varadker is currently Minister for Social Protection where his principle initiative has been to launch a controversial anti-fraud initiative. His previous stint as Minister for Health - a traditional graveyard for political careers referred to colloquially as "Angola" because of endemic waiting lists, poor management structures, and rising costs was also hardly an unequivocal success.

Simon Coveney had a relatively uncontroversial stint as Agriculture Minister and is now embroiled, as Housing minister, in the endemic problem of high house price inflation, rapidly rising rents, insufficient new housing construction, inadequate social housing provision and increased homelessness. As the relatively privileged son of a wealthy Cork business family, he may find it difficult to shake of a "merchant prince" moniker which generally doesn't go down well in Irish politics.

Coveney recently said he was "uncomfortable" with proposals emanating from a Citizen's Assembly to liberalise Ireland's very restrictive abortion laws - perhaps in an effort to consolidate his support in Fine Gael's more socially conservative rural wing.

Leo Varadker is the son of an Indian doctor and Waterford mother who was raised as a Catholic, went to a protestant boarding school, qualified as a doctor, and came out as gay some years ago to general acclaim for his political courage in doing so. He is generally regarded as shy, articulate and intelligent, but doesn't have many accomplishments to show for it.

He does have an eye for populist causes, however, and is not slow to comment on matters outside his brief: he recently proposed that Northern Ireland should remain within the single market in order to avoid the erection of a hard border within the island.

The new Fine Gael Leader will have two major challenges facing him in the coming years. Firstly, how to keep the Government running despite having only 50 out of 158 seats in the Dail and dependent on abstention by Fianna Fail and a scattering of support from independents to remain in office. Second, to address the challenges posed by Brexit, both for peace in Northern Ireland, and for the Irish economy when so much of our trade is with, and routed through, the UK.

Fine Gael is the most conservative of Ireland's major political parties, committed to liberal democratic market led economic policies and aligned to the European People's Party and Christian Democrats more generally. However it is also generally less nationalist than Fianna Fail and Sinn Fein and very pro-European in its general outlook.

Leo Varadker is generally seen as belonging to the party's more conservative wing, particularly on economic policies, and it is unlikely he will stray too far from the current policy of attracting mostly US FDI as a means of developing the economy and state revenue base. A liberal on social issues, he is more likely than Coveney to continue the process of distancing the Irish state from Catholic church control of schools and hospitals.

Fianna Fail will be nervous that the emergence of a younger, articulate, relatively popular, and telegenic leader could pose a risk to its chances of re-emerging as the largest political party after the next general election. They will be anxious to embarrass him at every opportunity and nervous that a new leader might try to call a snap general election before his honeymoon period expires.

However there is no evidence that an early general election would necessarily change the relative strengths of Irish political parties all that much, and every likelihood that the formation of a new government after such an election outcome would be as painfully drawn out as last time around. Ireland came very close to joining the list of European countries finding great difficulty in forming a stable government, and the new Fine Gael leader will be wary of being accused of destroying what has been a relatively stable governmental arrangement so far.

So the most probable outcome will be that the new Fine Gael Leader and Taoiseach will prioritise staying in office even in the current rather attenuated form, where major initiatives have to be run past Fianna Fail for approval first. So long as the economy keeps growing, the lack of major legislative proposals enabled by this arrangement may not prove to be fatal to its continuance. However all bets are off if a breakdown in Brexit negotiations leads to a major political and economic crisis on the island, or if Trump stops the flow of FDI from the USA.

The debate on how Ireland can survive and prosper in a post Trump and hard Brexit world has not even begun in earnest, and will be the true test of however emerges as the next Fine Gael leader and Taoiseach. With Brexit, Ireland will be losing a key ally within the EU, and the centre of gravity of the bloc will be moving further east. Northern Ireland could be de-stabilised and EU proposals for a Common Consolidated Corporate Tax Base (CCCTB) represent a mortal threat to Ireland's low corporate tax model of attracting FDI.

Irish political culture tends to promote fixers rather than visionaries, doers rather than intellectuals. It remains to be seen whether either of the main candidates for the job have any of these qualities in sufficient measure. Ireland's prolonged honeymoon period in the EU may soon be over.

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Fintan O'Toole: Leo or Simon? It doesn't matter much

To home owners with health insurance, the Fine Gael leadership contest is an interesting political battle. To the disaffected citizens, renters and invalids of post-austerity Ireland, it will make no difference

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This should feel like a generational shift. Varadkar is just 38. He has Indian heritage and is openly gay. Any one of these three attributes would have seemed extraordinary in any previous prospective taoiseach. His very presence as the favourite going into the contest ought to make us acutely conscious of the scale and speed of social change since he was born in 1979.

Simon Coveney is admittedly a more traditional figure - in some respects a typical dynastic politician, who inherited his seat after his father's tragic death in 1998. But he is still a young man - if he becomes Taoiseach, he will do so shortly after his 45th birthday.

---<snip>---

This is not a struggle for the soul of Ireland - it's not even a struggle for the soul of Fine Gael.

To acknowledge this is not to disparage either man - both are amiable, articulate, intelligent and politically skilled enough to have got this close to the top. But for there to be something at stake, there would have to be very clear differences between them: differences of ideology, experience, vision and demonstrated capacity to deal with Ireland's long-term social crises.

The truth is that the distances that separate them have to be surveyed with a microscope rather than a theodolite.

They are both male. Both are professional politicians who never even flirted with youthful radicalism: Varadkar joined Fine Gael in school; Coveney had it in the blood and worked on his father's election campaigns as a child.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat May 20th, 2017 at 10:20:59 AM EST
The angle of US capital (FDI) in Ireland is an interesting one. As I understand it, Trump plans to slash the US company tax, which is logically going to cause the US-based transnationals to bring their colossal cash piles home. What would be the impact on the Irish economy? It's only capital, not turnover or jobs ... Ireland remains a sensible EU base for English-speaking companies, all the more so with Brexit.

Just musing... the EU wants to tax those cash piles, given that they are the product of added value from sales in Europe. There might be a deal to be made, along the lines of tax it here instead of the US? Tax Wars will be a major feature of the next couple of years.  

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Sun May 21st, 2017 at 10:32:18 AM EST
Trump is imploding so fast there is great uncertainty as to whether he will get much of his agenda through, although it would be logical to think that reducing corporate tax rates is one area where he and the Republican majority are absolutely ad idem.

If large volumes of capital do move out of Ireland that will have the effect of reducing our artificially bloated GDP figures and actually reduce our net contribution to the EU even though it would have little impact on the real economy as you suggest.

The issue is more that it will become more difficult to attract US FDI if it is just as profitable to invest in the USA.

However, if the UK is off the pitch for competing for FDI seeking access to the Single market, Ireland would be well positioned to attract a large share of the FDI that might otherwise have gone to the UK.

From a strictly Irish point of view the risk is therefore not so much a reduction in US FDI (or artificial capital inflows), but the loss of trade with the UK (particularly in our labour intensive agri-food sector) and the loss of revenue if the CCTB results in corporate profits being taxes elsewhere.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun May 21st, 2017 at 11:08:36 AM EST
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