We stand at a crossroads – Howlin

19 November 2016

Speech by Brendan Howlin, T.D.

Leader of the Labour Party

#LabourRebuild regional meeting – Cork

It is, I think, no understatement to say we stand at a cross roads.

Brexit, the election of the new US President, the immediate hand out to the likes of Farage and Le Pen, constitute the biggest threat to the European idea since its inception.

Remember that the Union was born out of the catastrophe that was the 2nd world war. And that that war was born out of the catastrope of the Great Depression of the thirties.

While the outcome cannot be allowed to be the same, it would be foolhardy to pretend that the challenge facing us isn’t similar.

The forces of the populist right, those who can’t stop until its too late, are massing. Le Pen in France, Wilders in the Netherlands, the fool Farage in the UK and the populists in Italy.

Our forces, like Renzi, in Italy face tough challenges ahead. A referendum in a few weeks will determine whether Italy succumbs to the populists too.

What has been European’s economic challenge is now a political challenge. We need a politics of hope, not of despair. We need to put the economic crisis behind us. Europe’s economic stagnation is almost ten years old. Draghi has done his best but others have been found wanting.

This week, the European Commission belatedly began arguing for greater flexibility in budgets, and for greater investment across Europe. The Italian Government had threatened to veto the EU budget if such an initiative was not forthcoming.It is a long overdue move.

The German reaction is dispiriting. Wolfgang Schauble will wake up some day to find there is nobody left in his Europe. Europe needs stimulus now and German’s refusal to play its part is unfortunate. Psychologically we need to break with the recession era. Even Trump has understood that point.

If we’re still sitting round tables talking about Greece, there’s hardly any wonder people are not moving on.

What is being advocated for Ireland is disappointing. The Commission has castigated us in the past for not spending enough on investment, yet they don’t want us to have additional leeway now to build the hospitals and schools we need.As I have argued before, one of the impacts of a recession is to generate fear of recurrence. This encourages a degree of caution, that in this case, is dangerous in itself. As I’ve said, Europe’s threat is no longer economic, it is political. Europe needs to work and be seen to work for its people.

The response of our own Government is hugely disappointing.

We have political and societal pressures of our own.

To listen to some commentators you’d think we were partying like it was 1999. That the Fianna Fail days were back.Not so – spending has only increased by over 8% in the last three years – way below trend growth. When Micheál Martin was in Government the figure reached three times that level!

There was always a golden rule in budgeting.

Countries were expected to pay for day to day spending from the taxes they raised. And spending on infrastructure or investment could be borrowed as it was an investment in the future.

Families don’t expect to buy a house in cash from their weekly paychecks.

In the same way that, there are long-term investments the state needs to make, and which it is appropriate to borrow for.But our Government not only aims to pay for day to day spending from current revenue, to pay for increased capital investment from day to day revenue, they want to put some money aside for a rainy day as well.

For a family, this is like saying that all living expenses should come from the weekly paycheck. And so should the buying of a new car, and a new house. And while you’re at it, you should be putting a huge amount into savings.

Well, I don’t know many families that could afford that. Maybe some of Fine Gael’s friends, but not many of ours!

And if the European Commission has seen the light, it seems that Fine Gael has not. They don’t want some of this additional flexibilty for Ireland. Don’t want to even look for it. More German than the Germans themselves.It is bizarre.

In the worst of times we couldn’t invest as much as we would have liked because we would have had to take it directly out of people’s pockets.

As a result we have pent-up demands. Nursing homes, hospital beds, the railways and the third level sector, to name just a few.

I’m hardly known for being a spendthrift. But this approach is wrong.

I believe in the power of the state for public good.

I have been pushing the Government to engage at an EU level for changes to the fiscal rules.

Changes that would allow for greater capital investment in particular.

Investing in our infrastructure means building the houses we so badly need, building the hospitals we so badly need, making cleaner transport options a reality, investing in broadband now rather than later, and getting our kids out of prefabs.

These are sensible, and urgently needed investments.

In two weeks, I will meet with all of the leaders of socialist and social democratic parties from across Europe.

I will have this on the agenda, and I expect to get considerable support.

But Michael Noonan and Enda Kenny, who have spent almost six years sitting at the highest tables in Europe, seem unwilling or unable to do the same.

One of the reasons for the levels of disaffection we are seeing in our societies is a growing disconnect between what Governments deliver and the legitimate expectations of our citizens.

This is a serious point, and one we are not properly grappling with.

During the period of our economic crash, the gap between what our states provided, and the legitimate expectations of our peoples, widened considerably.

In that widening, fractures have begun to appear.

Moderation is under threat.

And Europe must respond before it is too late.

Disaffection was the ultimate precondition for Brexit.

In two weeks, it could be the reason for the election of a far-right Austrian president.

Next year, Marine le Pen, Geert Wilders and Frauke Petry will seek to capitalise on disaffection in elections in France, Holland and Germany.

We must respond first.

We must fight to rebuild the basic social contract, allowing each generation to know that progress will mean their lives will be better than those of their parents, and that the same will be true in turn for their children.

We must show people that recovery from recession is not just a corporate endeavour and that it will improve people’s lives. This must include, and I fail to see why this is controversial, a sensible path to income recovery for those whose salaries were reduced to allow our nation to weather the storm.

Labour, the fruit of people’s work, must have it’s fair share. That is the first lesson of the rust belt.

The move by the European Commission to recommend a fiscal expansion in the Eurozone next year is welcome.They have accepted that Euroscepticism is growing because of a failure to invest in the ways our people expect. It is late and needs to go further.

Ireland needs to be part of it. The danger facing Europe is not that it will spend too much but that it is spending too little.Too many people, Michael Noonan amongst them in my view, are trapped in a continuing process of worrying about economic crisis.

But in truth the economic crisis has faded. What we are now confronted with is a political crisis.If political solutions are not found to meet the demands of our people, this will become a much bigger problem than what we faced over the last few years.

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