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Viewing cable 08DUBLIN577, IRISH PRIME MINISTER INCREASINGLY BELEAGUERED

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Reference ID Created Released Classification Origin
08DUBLIN577 2008-10-21 11:45 2011-07-22 00:00 CONFIDENTIAL Embassy Dublin
VZCZCXRO0383
PP RUEHAG RUEHROV
DE RUEHDL #0577/01 2951145
ZNY CCCCC ZZH
P 211145Z OCT 08
FM AMEMBASSY DUBLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 9518
INFO RUCNMEM/EU MEMBER STATES PRIORITY
RUEHBL/AMCONSUL BELFAST PRIORITY 0815
C O N F I D E N T I A L SECTION 01 OF 02 DUBLIN 000577 
 
SIPDIS 
 
E.O. 12958: DECL: 10/21/2018 
TAGS: PGOV PREL EI
SUBJECT: IRISH PRIME MINISTER INCREASINGLY BELEAGUERED 
 
REF: A. DUBLIN 573 
     B. DUBLIN 571 
     C. DUBLIN 569 
     D. DUBLIN 556 
     E. DUBLIN 545 
 
DUBLIN 00000577  001.2 OF 002 
 
 
Classified By: Pol/Econ Chief Ted Pierce; 
Reasons 1.4 (B) and (D) 
 
------- 
Summary 
------- 
 
1.  (C) October has not been kind to Irish Prime Minister 
(Taoiseach) Brian Cowen.  It opened with the Government 
struggling to contain the damage from the global financial 
crisis and a faltering Irish economy (Refs A and D).  On 
October 16, Cowen had to explain to the European Council that 
Ireland was not yet ready to propose ways to resolve the EU 
dilemma created by Ireland's rejection of the Lisbon Treaty 
(Ref C).  Then, in the face of the economic crisis, came 
Cowen's release of an austerity budget (Ref B), which has 
been savagely attacked by friends and foes alike.  The flap 
over the budget has reinforced a perception that Cowen's 
authority and credibility are slipping away and that he is 
out of touch with the people of Ireland ) perceptions that 
were sparked by Cowen's remarkable failure to persuade the 
Irish public to pass the Lisbon Treaty referendum in June 
2008.  End summary. 
 
---------------------------------------- 
European Council Gives Cowen a Break ... 
---------------------------------------- 
 
2.  (U) On October 16, Cowen told EU leaders at the European 
Council meeting in Brussels that the Irish government was not 
ready to propose a way forward in responding to Ireland's 
June 2008 Lisbon Treaty rejection.  He noted that a 
parliamentary committee on Ireland's future in the EU had 
been established, which would further examine the issue and 
report out by the end of November.  He also said that the 
Irish government would consult the legal service of the EU's 
Council of Ministers to explore options that could make the 
Lisbon Treaty palatable to the Irish public.  (Note:  The 
legal service is responsible for drafting EU treaties in 
consultation with member states.  In the past it has devised 
legal formulas to enable states to opt out of parts of 
treaties.  End note.)  Cowen indicated that options would be 
presented to the European Council at its December meeting, 
noting that the Irish public would need to be reassured about 
the role of the EU in matters of tax, abortion, the country's 
neutrality, and the status of its commissioner.  He declared 
that Ireland should be at the heart of Europe, saying that he 
saw a need for stronger institutions and more effective 
decision-making as provided for in the Lisbon Treaty. 
 
3.  (C) French (and current EU) President Nicolas Sarkozy, 
assured Cowen of the support of the European Council. 
However, he also suggested that if Ireland could not come up 
with its own proposals for moving the Lisbon Treaty forward 
in December, he might table his own.  (Comment:  In December, 
the European Council will likely expect that proposals put 
forth by Cowen will enable the European Parliament election 
in June 2009 and the appointment of new commissioners in 
November 2009 to be conducted under the new Lisbon Treaty 
rules rather than the existing Nice Treaty rules.  December, 
however, may be too soon for Ireland to commit to the Lisbon 
Treaty rules (Ref C).  End comment.) 
 
------------------------------ 
... But His Own Party Does Not 
------------------------------ 
 
4.  (SBU) Forced into austerity by the global financial 
crisis and the downturn of the Irish economy, Cowen's new 
budget, unveiled on October 14, raises taxes and reduces 
benefits (Ref B).  A fierce public and political outcry has 
ensued.  Espcially sharp criticism has been leveled at Cowen 
or his plan to eliminate the automatic entitlementof all 
people 70 and older to free medical care nd use a means test 
instead to determine who witin this group should pay.  Not 
only did the oppoition and the public express outrage at the 
elimiation of this entitlement, but non-Cabinet Membersof 
Parliament from his own party Fianna Fail, Members of 
Parliament from his coalition partner Green Party, and 
independent Members of Parliament who have generally 
supported the coalition also vigorously objected.  One Member 
of Parliament, Joe Behan, a 20-year Fianna Fail veteran, 
resigned from the party in protest.  An independent Member of 
Parliament called the measure "socially unfair, morally wrong 
and political madness."  Another publicly withdrew his 
support for the government.  Some political commentators 
 
DUBLIN 00000577  002.2 OF 002 
 
 
started talking about a vote of no confidence in Cowen's 
government. 
 
5.  (SBU) Stung, Cowen appealed on October 19 for "time and 
space" to find a solution to the uproar.  Delaying a 
long-planned trip to China, he stated that his proposed plan 
to eliminate free medical care for all those 70 and older 
would need to be changed in order to gain wider public 
acceptance.  He indicated that his government would consult 
with the Irish Medical Organization on solutions.  However, 
he reiterated that an acceptable solution had to be sought 
that would sustain needed reductions in government 
expenditures.  Union leaders warned that increased taxes and 
reduced benefits could derail the social partnership 
agreement negotiated in September but not yet finalized (Ref 
E).  (Note: The government, the business community and labor 
meet triennially to reach voluntary agreements on wages and 
benefits.  End note.)  Opposition Fine Gael leaders tabled a 
parliamentary motion, to be debated the evening of October 
22, calling for a reversal of the elimination of free medical 
care for all those 70 and older. 
 
6.  (SBU) In a hastily announced press conference on the 
morning of October 21, Cowen announced to the nation that he 
had "listened carefully" to the "depth of feeling" expressed 
and had found a solution.  Expressing regret for the anxiety 
caused and blaming a failure to "adequately communicate" for 
the uproar, he pointed out that 70 percent of those 70 and 
older would have remained eligible for free medical care in 
spite of the policy change.  Nonetheless, he went on to say, 
the government had decided to raise the threshold for 
eligibility for free medical care such that 95 percent of 
those 70 and older would continue to be eligible.  Cowen 
insisted that the "budgetary parameters" he had originally 
set ) a savings of euro 100 million ) would be maintained 
by renegotiating payment rates for the treatment of those 70 
and older as well as realizing savings by not paying for 
medical treatment for the wealthiest five percent of this 
group.  Following Cowen's press conference, political 
commentators referred to "a revolt in the ranks," "a 
breakdown in party discipline," and "the collapse of Cowen's 
authority." 
 
------- 
Comment 
------- 
 
7.  (C) Once the political dust had settled over the weekend, 
it became clear that those objecting to the elimination of 
free medical care for all those 70 and older did not intend 
to bring down Cowen's government (and perhaps their own 
political fortunes).  Rather, they were warily eyeing the 
voters in their constituencies and were trying to position 
themselves as champions of the vulnerable.  Most appear happy 
with the compromise crafted by Cowen.  Nonetheless, the 
incident has reinforced a perception that Cowen's authority 
and credibility are slipping away and that he is out of touch 
with the people of Ireland ) perceptions that were sparked 
by Cowen's remarkable failure to persuade the Irish public to 
pass the Lisbon Treaty referendum in June 2008. 
FOLEY