Cablegate: A Green Threat to the Government?

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PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHDL #0422/01 2801613
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P 071613Z OCT 09
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 0241
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBL/AMCONSUL BELFAST 1087

C O N F I D E N T I A L SECTION 01 OF 02 DUBLIN 000422

SIPDIS

E.O. 12958: DECL: 10/06/2019
TAGS: PREL PGOV EFIN ECON EI
SUBJECT: A GREEN THREAT TO THE GOVERNMENT?

REF: A. DUBLIN 417
B. DUBLIN 416
C. DUBLIN 361
D. DUBLIN 360
E. DUBLIN 217

DUBLIN 00000422 001.2 OF 002

Classified By: Amb. Daniel M. Rooney. Reasons 1.4(b/d).

1. (C) Summary: The Green Party, the Irish government's
junior coalition partner, will hold a special convention on
October 10 to vote on a revised Program for Government and
draft legislation setting up the National Asset Management
Agency (NAMA). John Gormley, Minister for Environment,
Heritage, and Local Government and leader of the Green Party
said that if either of these is rejected the Greens, "could
not continue in government." A DFA contact told us that if
the government falls, it is possible the Lisbon Treaty
ratification could be delayed. This would delay the
legislation implementing NAMA as well. Recently, Gormley
admitted to the Ambassador that this is a "tough time to be
in government," with three major political hurdles to
overcome over the next several months. In addition to the
Program and NAMA, the government must introduce a harsh
budget that will be politically unpopular. It is unlikely
that the Greens will leave government even if they do not
approve the government Program; rather, they will likely
continue negotiations until they get a deal that party
members can live with. However, this would delay the
beginning of discussions on the budget -- something the
government would like to avoid. End Summary.

Will Greens Approve New Government Program?
-------------------------------------------

2. (C) The Green Party is stuck between some of its more
strident members, who complain that the leadership has
strayed from the Party's ideals, and the exigencies of
governing. In a September 28 meeting with the Ambassador,
Gormley said that it was "increasingly difficult to govern
with the opposition constantly criticizing" the government.
He understood that this is politics but that the opposition
is "taking it a bit far." That said, he admitted that the
Greens (the junior partner to the much larger Fianna Fail
(FF) party) have a lot to lose by leaving.

3. (C) Gormley continued that the government faced three
serious challenges before the end of the year. First up are
negotiations this week over a revised Program for Government.
The Greens have laid out an opening position that will be
difficult for FF to swallow, including a rollback of cuts to
secondary education, maintaining high social welfare benefits
and introducing universal health care (Ref A). If the two
parties reach agreement, then the Program will be voted on by
the Green Party membership at a special convention on October
10. According to party rules, the agreement must receive a
two-thirds majority in favor in order to pass. If the
program is not approved, negotiations will either continue or
the Greens will leave the coalition, effectively toppling the
government.

Could Greens Imperil Lisbon Treaty?
-----------------------------------

4. (C) On October 5, a Department of Foreign Affairs (DFA)
contact told us that officials in his department are worried
about the Green Party's decision and how it might affect
Lisbon Treaty ratification (Ref B). He explained that, if
the Greens leave government, the Dail (Irish parliament)
would be dissolved (because Fianna Fail does not have a
majority of the Dail's members) and ratification of the
Lisbon Treaty would have to wait for a new government. Our
DFA contact said that there are ways of avoiding such a chain
of events but, "it is a real possibility." The DFA has sent
a memo to Minister Gormley "reminding him and his party of
their responsibilities in this matter."

5. (C) On October 5, Poloff spoke to Peadar O Broin of the
Institute of International and European Affairs (IIEA) who
explained that because of technicalities in the vote
certification process, the Parliament will not be able to
ratify the Lisbon Treaty until some weeks after the October 2
vote. If the Greens leave government this weekend and
Parliament is dissolved pending early elections (which must
be held within 17 to 25 days of dissolution of Parliament),
the Lisbon Treaty is unlikely to be ratified until a newly
constituted parliament can act.

The Greens and NAMA
-------------------

6. (C) According to Gormley, the second hurdle is the
legislation setting up the National Asset Management Agency

DUBLIN 00000422 002.2 OF 002

(NAMA), meant to take bad property loans off of the books of
Irish banks in the hope that the banks will begin lending
more again (Ref C). The Green Party's rank-and-file, many of
whom blame bankers and property developers for Ireland's
financial mess, objected to some of the provisions of the
legislation and urged the party leadership to seek
amendments, not all of which Fianna Fail agreed to. The
Green Party will vote on whether the party should support the
NAMA legislation at the October 10 special convention. In a
September 18 interview, Gormley said that if either the
Program or the NAMA bill were rejected at the convention,
then the Greens "could not continue our participation in
government."

7. (C) On October 6, Econoff spoke with Alan Barrett, senior
economist at the Economic and Social Research Institute, who
confirmed what O Broin said regarding the Lisbon Treaty and
added that the pending NAMA legislation would also be delayed
if Parliament is dissolved. Unlike in the case of the Lisbon
Treaty which is supported by all major political parties,
however, Barrett said it was not clear that NAMA would
survive in its current form -- if at all -- under a different
government. This would be a severe blow to the moribund
Irish economy just after receiving welcome news with the
Lisbon passage.

Most Greens Want to Stay in Power
---------------------------------

8. (C) Econoff spoke to Joe Curtin, a Green Party member and
senior researcher at the IIEA, who predicted that both the
Program and NAMA would pass at the convention. He said that
most Party members realized that it is better to be inside
than outside government and that, "the Green Party has a real
opportunity to affect change." Curtin admitted that there is
a bit of brinksmanship going on between Green and FF
officials, but this is constrained by the fact that both
parties recognize they need the other to remain in power.

Upcoming Austerity Budget
-------------------------

9. (C) Gormley told the Ambassador that the final challenge
will be the government's 2010 budget which will be introduced
in December. The government must come up with about USD 6
billion from increased taxes and decreased spending in 2010
(Refs D and E). This will be the first in a series of harsh
budgets aimed at getting the deficit under three percent of
GDP by 2013. The Greens oppose many of the cuts -- in
particular in education and social welfare payments -- an
they will be discussed within the Program for Gvernment
negotiations.

Comment
-------

10 (C) We agree with Curtin that it is very unlikelythat
the Greens will pull out of government thiswekend. The
party would face political oblivio if a general election
were held today. However there is a greater chance that a
revised Programdoes not get the necessary two-thirds of the
vots at the convention. This would ikely lead to an
extension of the negotiations between the Greens and FF,
which would delay the start of the government's internal
discussions on the December budget. This would be
problematic because government officials need as much time as
possible to minimize the political fallout from what is
widely expected to be a draconian budget. End Comment.
ROONEY

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