The Dail meets today (Mar 10) for the first time since our inconclusive election, and the only thing we can say for certain is that nothing is certain about what is going to happen. It's the worst outcome imaginable for the country right now, given the fragility of our economic recovery and the weakness of the global economy on which we are so dependent.
The final count in the election gave Fine Gael 50 seats, Fianna Fail 44, Sinn Fein 23, Labour seven, and smaller parties and independents 34 between them, adding up to the 158 members of the new Dail. Subtracting one member who will be chosen by secret ballot as ceann comhairle (chairman), 79 seats is the magic number for a majority.
With Fine Gael only a handful of seats ahead of Fianna Fail, either of them could lead the next government if they can get the support of enough of the motley crew of independents and small parties, including Labour or even Sinn Fein.
This appears to be the preferred option for each of them, rather than forming the much talked about historic Fine Gael-Fianna Fail coalition which would finally end the Civil War division in Irish politics and give a strong and stable government for the next five years.
Instead we are faced with the prospect of a ragbag government with an amalgamation of five or six different policy platforms and no coherent vision for the future of the Irish economy or Irish society, one that will be pulled in opposite directions as its members try to fulfill unwise populist promises made to garner votes in the election.
There's a lot of talk in the air of reforming the Dail, of a new style of parliament in which ordinary members will have a real say in decision-making, of a new era of fairness and social caring. But there is little detail on how any of these laudable goals might be achieved.
The reality is that the new government, like the outgoing government, will have to run a very tight ship because there's no money. We still haven't balanced the budget and for years ahead we will be overshadowed by the debt mountain and the annual interest payments we have to make.
The incoming government will inherit this mountain of debt and a limited ability to raise more revenue. Any deviation from prudent economic policies, including keeping a very tight rein on spending, could see our debt costs soar and snuff out our recovery. Any further increase in the already very high tax burden on middle and higher earners to pay for yet more state spending is likely to be counterproductive, killing incentive and stifling business growth.
In the last few days, stories have emerged about Taoiseach Enda Kenny offering seats at the cabinet table to various groups of independents and small parties as he tries to cobble together the numbers. The Fianna Fail leader Micheal Martin has been holding similar talks.
Without Sinn Fein, however, the best they are likely to achieve would be enough support for a minority government, probably a highly unstable one. Both are wary of having any truck with Sinn Fein, who themselves are wary about joining a coalition which will have to implement tough decisions into the future.
After they elect their new chairman, the first challenge the politicians will face when the Dail resumes this Thursday will be the vote for taoiseach. Neither Kenny nor Martin is likely to win a majority, since a lot of the independents and smaller parties are likely to sit on the fence. But whichever of them gets the higher vote will be in the driving seat to intensify negotiations in the days and weeks ahead aimed at forming a government.
If Kenny fails to get the bigger vote he is toast. And despite Fianna Fail being the smaller of the two big parties, Martin has a chance of pulling it off.
It has been an extraordinary comeback for Fianna Fail, the party which was dead and buried in the 2011 election after wrecking the country. They have done it by promising voters there is a fairer (in other words easier) way of recovering from the crash than the tough austerity program imposed by the government over the past few years.
What short memories we have! Many voters seem to have forgotten that it was the last Fianna Fail government that laid down this program of tax hikes and spending cutbacks and agreed it with the IMF and the EU as part of us getting the bailout. Now they are saying there was a less painful way of restoring the economy!
To be fair, all the politicians were making extravagant and unrealistic promises in this election, recognizing that people had reached breaking point with the extra taxes and charges that formed the austerity program and would vote for anyone who offered them relief. The last straw was the water charges and Fianna Fail played this to the maximum, conveniently forgetting that six years ago it was they who had agreed with the EU that water charges had to be introduced here (like they exist in all the other 27 member states in the EU).
Instead of sticking with the careful, conservative approach that is needed to continue our recovery, all the parties in this election promised tax cuts and massive increases in state spending, in health, housing, education and other areas. The government parties, Fine Gael and Labour, led the way in this splurge of promises, in the process undermining their own credibility.
All this extra spending and tax cuts is supposed to be funded by revenue from future growth, something that is far from certain. The election campaign was an ominous indication of what could lie ahead, with the state finances again in danger of getting out of control as a plethora of parties and independents in the Dail battle with each other to live up to their promises.
The truth is that what we need here is not bigger government, but better government. We need much more efficient and productive use of the state spending we already do.
An example is health, which became one of the emotive issues in the election thanks to the number of people on trolleys for hours in hospital A&E departments because there were no beds available. The answer from all the parties was to promise a massive increase in state spending, ignoring the fact that Ireland's per capita spending on health is already the second highest in Europe (after Denmark) and that over 40 percent of people here have private health insurance and cost the state very little.
Throwing more state money we can't afford at the problem – and at other problems in education, housing and security – is not necessarily the solution, yet that is what all the parties and most of the independents want to do.
The mess made over water charges is a perfect illustration of how we get things wrong here and also of the cynical approach of Fianna Fail, who have said that getting rid of Irish Water and ending charges until the system is fixed will be a condition for their support for any new government.
It's worth looking at the water issue in more detail. As we said, Ireland was the only country in Europe that did not have domestic water charges. Much of our water infrastructure was built by the British a century or two ago and is now in serious need of upgrading, with major problems here in supply and in waste water disposal.
In a country famous for the amount of rain we get, water supply is often unreliable and quality is poor. Dozens of towns do not have adequate waste water treatment and pollute rivers, lakes and coastal waters.
In 2000, the EU adopted a new Water Framework Directive, aimed at conserving water by getting everyone to pay for it and also laying down standards for how waste water was to be treated across Europe. Ireland – where water services were provided by local councils around the country with little co-ordination between them – dragged its feet.
When they no longer had a choice, the last Fianna Fail government told the Dail that a start had to be made. To reduce waste, consumers would have to pay for water, after a basic allowance had been exceeded. Major investment in fresh water supply and waste water treatment would be undertaken.
To move it onto a national level and improve efficiency, Fine Gael and Labour created a new utility called Irish Water. But the way this was done enraged consumers here, with huge amounts of money spent on setting up the new utility and installing meters before any money was spent on fixing the leaking system. Left wing parties here seized on this and a campaign of non-payment of water charges began, with protest marches around the country.
In spite of the mess, over 60 percent of consumers have paid their water bills. Now Fianna Fail want to turn it into an even bigger mess by abandoning what has been done up to now.
Instead of doing that, they should be looking at why so much money has been wasted by the new quango whose priority was to buy off the unions by employing all the former council water workers and by setting up a national billing system backed up by a huge call center and an advertising campaign, as well as a national drive to install water meters at every home in the country.
At least a billion euro has been spent on all of this before any serious effort has been made to fix the leaking pipes which lose up to half the water they carry in many areas.
The intention was good but, as is so often the case here, the implementation was poor, even by a government with a large majority. The next government may not have any majority at all.
If we can't even run a water service, what hope have we of running a country?