Fianna Fáil and Fine Gael have told the Social Democrats they are willing to agree “ringfenced funding” to implement Sláintecare, the all-party blueprint for the future of health services.
Taoiseach Leo Varadkar and Fianna Fáil leader Micheál Martin have also told Social Democrats’ co-leaders Catherine Murphy and Róisín Shortall they are unwilling to agree to a long-term suspension of the EU’s fiscal rules.
In a letter to the left-leaning party, which has six TDs, Mr Varadkar and Mr Martin respond to six questions about the document published by Fianna Fáil and Fine Gael which will provide a framework for government-formation negotiations. Many of the questions put by Ms Murphy and Ms Shortall focus on how State services, as well as policy measures, will be financed by the proposed coalition led by the two bigger parties.
Reassurance has been given that funding for Sláintecare will be ringfenced.
It is a policy pillar for the Social Democrats and full implementation is expected to cost upwards of €5 billion over the next four to five years.
However, the two leaders of the two bigger parties indicated they do not agree with the suspension of fiscal rules, as suggested by the Social Democrats.
In the letter, sent on April 30th, Ms Shortall and Ms Murphy asked would the parties commit to a campaign at EU level to suspend fiscal rules and replace them with a measure that would exempt public investment from the excessive deficit procedure?
In their response, Mr Varadkar and Mr Martin have rejected that course of action. They said their parties supported the introduction of the EU’s fiscal rules.
They add, though, that they agree the rules “will need to be reformed to take account of changed times and to enable European economies, including our own, to rebuild through public investment in areas like healthcare, housing, transport and climate action”.
The letter continues: “Countries cannot run larger deficits and increase debt indefinitely without avoiding the inevitable consequence of high bond yields, even the inability to borrow at all.”
In response to a question on borrowing requirements, Mr Varadkar and Mr Martin say borrowings during the Covid-19 emergency will be repaid on the terms agreed, rolled over or refinanced at some point.
In response to a specific question about the amount of future borrowing requirements, the two leaders say it is impossible to be accurate as “it is beyond anyone to estimate with any certainty what the economic situation will be in 2022 and 2023”.
Both leaders repeat their invitation to the Social Democrats to participate in government-formation talks. They say they can accommodate requests for detailed briefings from the Department of Finance, National Treasury Management Agency and the Irish Central Bank.
After the Covid-19 emergency
“As you will be aware we have agreed with the Green Party to commence programme for government negotiations. We would be happy to meet to discuss whether the Social Democrats wish to take part in those negotiations to draw up a programme for government that will enable Ireland to recover, rebuild and renew in the aftermath of the Covid-19 emergency.”
The Social Democrats are expected to discuss the contents of the document over the next few days.
The party is seen by others as reluctant to join a coalition involving Fianna Fáil and Fine Gael and is more likely to remain in Opposition.
At a Fine Gael parliamentary party meeting earlier this week, Mr Varadkar told his colleagues he would like to be part of a broad-based coalition involving not only the Greens but the Labour Party, Social Democrats and some Independents also.
The Labour Party has also written a letter to the larger parties seeking clarification on its framework document but has not yet received a reply. Its leader, Alan Kelly, has indicated a preference for the party to go into Opposition to allow it space to rebuild as a party.
