Its five weeks until the big day. But ‘Budget Season’ is firmly upon us. The release of positive exchequer returns has this week intensified discussion on the scope for a smaller-than-anticipated adjustment.
The season of speculation and spin has already seen new junior ministers on the block – Simon Harris and Ged Nash – seek tax cuts and wage increases. This week a succession of Cabinet heavy hitters from the Taoiseach to ministers Michael Noonan, Joan Burton and Brendan Howlin have been out on it.
As ‘Budget Season’ in Ireland is not drastically different to that of the UK, a political memoir released last year by Gordon Brown’s former press advisor is intriguing.
Anybody with even a passing interest in the behind-the-scenes workings of government should read Damian McBride’s ‘Power Trip: A decade of Policy, Plots and Spin’.
McBride was the Downing Street spin doctor who controversially resigned when he was caught attempting to smear members of the Conservative party. That aside, he provides a fascinating insight into the dark arts of selling a budget.
Setting the scene
After leaking the date of the Budget months in advance, the second story for the media is what Mc Bride calls ‘a scene setter’ which outlines the government’s priorities for the Budget and the economic and fiscal backdrop. He admits that this is often “fairly bland” but it’s crucial “to get expectations in the right place on some of the key growth or borrowing figures, just so there were no nasty surprises on the day for the markets and no shock headlines in the post-Budget papers.”
Looking at statements from a string of our own ministers in the last few weeks it would appear that we are in that ‘scene setter’ phase. The message is that the adjustment will be much less than expected but we cannot afford a giveaway budget.
After the scene is set, McBride said that the next stage of briefing the Budget is “downright skulduggery.” In the weeks before the speech, he said the government wants as little speculation about the Budget as possible to keep its powder dry for the crucial few days beforehand.
“So I’d tend to leak a few stories or planned announcements from other government departments that could be guaranteed to cause a bit of distraction and keep the journalists busy for a day or two.”
Talk of by-elections and local authority funding before Budget 2015, and last year’s Seanad Referendum (held eleven days before Budget 2014) are similar distractions in an Irish context.
The much-derided former Westminster spin doctor said the use of distractions “is a time honoured trick to help the successful presentation of the Budget” and if they work successfully “this meant we would get to the weekend before the Budget without a single good story from the package having leaked and with any bad news on the fiscal side already reported and discounted ahead of the day.”
A Budget contains forty to fifty readymade stories and, of these, McBride says “we would generally decide two to three that had to be held back until the day at all costs, and a few dozen that were too complicated, boring or unpopular to do in advance. That left us with about fifteen that could be released before the day, equating to one each for the main Sunday and daily papers, if the Sundays couldn’t be persuaded to go for some skulduggery instead.”
His memoir continues, “There is certain etiquette to these Budget stories. Journalists tend not to write definitively days in advance that a particular measure will happen, both because – from the Treasury’s point of view – it looks a bit too ‘leaky’ and because – from the journalist’s – it’s always wise to have a get-out clause in case the budget changes at the last minute.
“So the usual form is to say, for example, that the Budget is ‘expected to freeze fuel duty’ or ‘considering announcing a boost for first-time buyers’ and so on.”
Journalists having a punt
Then there are journalists having a punt. McBride recalls how enterprising journalists used to call him up “either because they’ve had a genuine tip from elsewhere or – more likely – because they’re just having a punt, and says: ‘I’m thinking of writing that you’re going to scrap TV Licenses for pensioners’.”
If the journalist’s punt is true and that is exactly the big headline measure that the government wants to announce, McBride says he would not want to see it wasted on one newspaper a few days out. The cunning spin-doctor then opts for his favoured method of lying-without-lying by telling the journalist, “I know where this is coming from, but I would be very, very cautious if I were you…it almost certainly won’t even be floated, so you’d end up looking a bit silly…if I was you I’d steer clear of that one for now.’
“Obviously that particular journalist risks ending up a bit miffed when they hear the announcement on Budget Day, so you need immediately to follow up by offering them the best of your fifteen stories as an alternative, even a couple if you’re worried….”
Fine Gael/Labour strategy
After six tough budgets where crisis management of bad, and even worse, news was largely the priority, the current government’s challenge will be to manage expectations.
It needs to create enough positive noise to help increase consumer confidence. But it must be careful to resist the urge to reverse cuts and excessively ease taxes in a giveaway budget.
The last thing the government, who bid farewell to the Troika, might want is come out with a Fianna Fáil/PD Tribute Budget, à la Charlie McCreevy in 2000. This early in the recovery, the opposition similarly needs to avoid imitating their predecessors Fine Gael and Labour by shouting “we want more”.
This week’s European elections are taking place amid unprecedented uncertainty over the European project.
The electorate is in a sour mood, the mainstream parties are fearful, and pro Europeans fear that a surge in support for the extreme right and eurosceptic parties will lead to Tea Party-style politics, and ultimately gridlock, in the next legislature, further damaging the reputation of the assembly.
Yet the parliament itself is exuding more self-confidence than ever before over its powers, which have risen steadily since the Maastricht Treaty, and most notably since the Lisbon Treaty.
And under Lisbon, the parliament is also asserting its right to oblige member states to appoint the parliament’s chosen candidate – theoretically the one whose political grouping wins the most seats – as the next European Commission president.
In the past member states chose that position as part of the complex horse-trading which accompanied the handing out of top EU jobs. Although Lisbon states that EU leaders must “take into account” the results of next weekend’s elections, heads of government are likely to insist on keeping the privilege to themselves.
Their interpretation is that EU capitals only have to take into account the election results as part of the entire allocation of top jobs, ie the Commission president, the president of the European Council (currently Herman Van Rompuy), the EU foreign policy high representative, and the president of the parliament.
“There are two different interpretations,” notes Janis Emmanouilidis, director of studies at the European Policy Centre (EPC), a Brussels think tank. “We shall see which of them will prevail, what kind of compromise will be found, and whether there will be an institutional battle between the European Parliament and the heads of state and government.”
Two days after voting closes across Europe, EU heads of state will meet in Brussels to give their first response to the result.
It is an informal meeting, which means that formal summit conclusions are not delivered at the end; it also means that EU leaders don’t have to invite the current president of the European Parliament and one of the front runners to be the assembly’s choice of Commission president.
Martin Schulz, a German social democrat who has campaigned hard for the post, is the candidate for the left, better known as the Progressive Alliance of Socialists and Democrats (PES),
Already the London Times has quoted Downing Street sources as saying that David Cameron, the British Prime Minister, is determined to block Schulz’s bid to head the Commission.
This is because Schulz’s strong, pro-European views would hinder Cameron’s chances of a significant renegotiation of Britain’s place in the EU during the next Commission term.
If the May 27 meeting were a formal one, that would mean that Schulz, as president of the parliament, would be invited to attend. Some observers feel that would be too embarrassing for Europe’s leaders, if they were to have to declare in his presence they had no intention of supporting him, even if the socialists win a majority of seats in the election.
While that political battle looms, the voters themselves may register their disgust or apathy by staying at home in droves. The turnout in euro elections has fallen from 63% in 1979 to just 43% in 2009, despite the chamber accruing new powers.
These elections take place amid unheard of distrust in EU institutions, largely due to the austerity and high unemployment associated with the euro crisis. Positive and negative associations with the EU have almost converged, with only 31% of Europeans having a positive view of Europe (down from 52% in 2007) compared to 28% who hold a negative view (up from 15% in 2007).
There are no predictions yet about the overall turnout this time, but if the turnout continues on its downward trend then, according to Heather Grabbe, from the Open Society European Policy Institute, it will be the most angry voters who will vote.
“It’s the first pan-European poll since the euro crisis began so it’s an opportunity [for voters] to express their grievances, their anger, their fears also about where Europe is going and what’s happening to their economies,” she says.
That could see a rise in support for far-right and eurosceptic parties, but also for parties on the hard left.
The latest TNS poll (May 16) shows the centre right European People’s Party (to which Fine Gael is aligned) on 221 seats, with the centre left PES on 194 seats (Labour is a member) and the Liberals (ALDE, Fianna Fail’s party) on 62 seats.
But the real story of this election campaign is how the far-right and eurosceptic parties will fare. Polls suggest they could win anything between 200 and 220 seats.
Out of 751 seats in total, that is significant.
The range of far-right parties is broad, and although there is talk of a loose alliance, the prospect of them all forming a cohesive block in the parliament is by no means guaranteed.
In France there is the Front National, UKIP in Britain, in the Netherlands Geert Wilders Freedom Party, in Italy the Northern League, in Austria the Freedom Party, in Slovakia the National Party, Golden Dawn in Greece, the Danish People’s Party in Denmark, Vlaams Belang in Belgium and Jobbik in Hungary (among many others).
These parties have in the past expressed varying degrees of xenophobia, racism and anti-semitism.
While several parties in western Europe have been trying to improve their branding, most are fundamentally opposed to the euro and the EU, meaning, as Mark Leonard and José Ignacio Torreblanca from the European Council on Foreign Relations (ECFR) point out, their candidates want to abolish the very parliament to which they seek election.
“This will likely polarise debates in the European Parliament between ‘pro-Europeans’ and eurosceptics,” argue Leonard and Torreblanca.
“Even if that does not happen, however, the eurosceptics could make the EU even more difficult to govern and in particular could limit its ability to adopt the key decisions it needs to take to solve the euro crisis and create growth.”
Observers suspect that eurosceptic MEPs will follow a spectrum of behaviour from simply not turning up, to turning up to make inflammatory anti-EU or anti-minority speeches, to attempting to block certain aspects of EU law that they find objectionable, or to trying constructively to push laws that reduce EU integration.
In an interview with RTÉ News, the head of the French Front National Marine Le Pen promised to stop the EU in its tracks, and to use the far-right’s presence in Brussels and Strasbourg as a lever to force the debate on Europe at home.
“I hope we will have a blocking minority because I believe the European Parliament is undemocratic, destructive towards our identities, our economy and our system of social protection.
“If we succeed… then I will tell the [French] government that they need to take all this into account and that they should organize new national elections [on the euro question].”
But securing the kind of blocking minority that Madame Le Pen wants may not be easy. She has appeared publicly with Geert Wilders in the Netherlands, but has fallen out with Nigel Farage and his resurgent UKIP.
Some far-right parties have argued for strict budget discipline, while others have attacked the pre-eminence of austerity as the main tool in fighting the euro-crisis.
At present the main eurosceptic parties – ie UKIP and the Danish People’s Party (DPP) – sit in the Europe of Freedom and Democracy (EFD) block. In the upheaval caused by a eurosceptic/far-right tide, there could be a lot of dismantling and reforming among the other blocks on the right, such as the European Conservatives and Reformists (ECR) and the promised European Free Alliance (EFA) of Wilders and Le Pen.
How these MEPs – should they number 200+ – organise themselves after 25 May is still a source of debate.
But the fact that the European Parliament has dramatically increased its powers through Lisbon and previous treaties – it now has codecision on 62pc of all EU law, meaning it is on an equal footing with member states in negotiating the legislation proposed by the European Commission – is causing some to fear that extremist MEPs could seriously undermine the workings of the EU.
For a start they could help to block the appointment of the new Commission, then turn their attention to any new rules associated with the EU’s banking union. One of the pillars of banking union is closer political union, a concept pushed by Germany as a way to give other parts of the construction – a central superviser in the ECB, a fiscal compact, a more harmonised approach to national budgets – greater democratic legitimacy.
Any such moves will be roundly rejected by eurosceptic and far-right MEPs.
The threat posed by the fringes may well mean that Europe’s two big political families, the centre right Christian Democrats (EPP) and the centre left socialists (PES) will be forced, in the end, to collaborate in order to get key legislation through the parliament and into law.
For some, while this would be a necessary expedient to prevent the parliament from grinding to a halt if the wreckers win enough seats, it would also be bad for the EU image, as it would confirm the eurosceptic narrative of the establishment ganging up on what the eurosceptics would see as “the people”.
It would also diminish clear differences between right and left on key legislation associated with the euro crisis.
More immediately, the arithmetic after the election may make it difficult for the parliament to approve the next head of the European Commission.
If the member states accede to the parliament’s interpretation of the Lisbon Treaty and accept either Martin Schulz as the centre left candidate for the top Commission job, or Jean-Claude Juncker as the centre right’s candidate, the nomination would still have to be approved by a simple majority of the parliament.
According to an analysis by José Torreblanca of the ECFR, neither men would be able to count on a majority of MEPs respectively on the left or right (including the Greens and the Liberals) to get a majority.
Again, the only solution would be a grand coalition of right and left, such as that which currently exists in Germany.
“After a bit of despair, Juncker and Schulz may examine the numbers and realise that the only winning coalition that could deliver a safe and ample majority would be the one that the two of them could make together,” writes Torreblanca.
“A grand coalition made up of the Socialists and the EPP would add up to 421 seats (56 pc), well above the absolute majority threshold. They could then ask Guy Verhofstadt’s liberals to join – being in the middle in this potential configuration, it seems quite plausible that the liberals would not want to be in the opposition. This three-group coalition would have 484 seats (64%).
“This would seem to be a really safe and stable absolute majority, bullet-proofed from both Eurosceptics on the right and Greens and left-wing members on the left. It could then deliver on a large number of issues, most importantly euro zone governance,” he says.
However, as Torreblanca points out, this would again send a confusing message to voters.
“Having told the voters that this time was different, and that they would be able to choose between real alternatives along the left-right divide, the European Parliament would instead return to the ‘politics as usual’ of being run by mainstream pro-European parties.”