Cameron's insistence on EU budget cut counterproductive, says Irish MP - The Guardian

David Cameron's insistence on cutting the European Union budget will endanger any fiscal stimulus to save Europe's economy, the leader of Ireland's opposition has warned.

Micheál Martin, currently the most popular politician in the Republic, described the UK prime minister's demand for a 1% cut in EU spending as counterproductive.

Instead the EU should introduce an Obama-style fiscal stimulus plan across Europe to help end the eurozone crisis, said Martin, whose Fianna Fáil party has recovered in the opinion polls from its historical electoral drubbing in 2011.

"The European leadership is letting us down because we do need stimulus," he said. "Solving the eurozone crisis is not just about correcting the public finances. Ireland does not have the capacity to create a strong stimulus so it needs to be European-wide. Yet, what is the big debate in Europe at the moment? 'How can we cut 1% off the EU budget?' Britain wants to cut the budget but yet that makes no sense."

He added: "You cannot say it's austerity all the way and it's cuts, cuts, cuts. Europe actually has the capacity to have stimulus. The EU for example is wealthier than the United States but the European Union leaders have not taken this on board. The drive for a 1% cut would hurt everyone in Europe because that would mean no meaningful fiscal stimulus would come from the EU, which is what is needed.

"It's worth remembering that the EU budget in its entirety is only 1% of all European income. Which is tiny compared to the US where the federal budget is around 20% of the economy and over there the federal government has and does help up states that are in trouble. That's part of the contract in the US, it's part of its national contract."

The last opinion poll in Ireland gave Fianna Fáil 20% while Martin was the most popular political leader in the state. This turnaround in fortunes has been surprising given the party's hammering in the 2011 general election when it lost power after ruling for 14 years and sustained a historic loss of seats.

After licking its wounds and returning to the Dail with just 20 seats, the party founded by Eamon de Valera found inspiration from an unlikely source – the British Conservative party, Martin said. Fianna Fáil even consulted with the historian Tim Bale who advised David Cameron on rebranding the Tories following a series of electoral defeats.

"Tim Bale told us about the journey the Conservative party went through from equally devastating electoral defeats they had," he said. "The immediate issue for the Conservatives was, by all analyses, that they didn't get it. They did not get the scale of the defeat. They did not get the message the people were sending them, the Conservatives simply thought their vote just went away for a short time.

"I would like to think that from relatively early on that we as a party generally got it. We got and understood the message from the electorate. Listening to what happened to the Tories has been a big help and we have learned, relatively quickly, to listen," he said.

Aside from the Celtic Tiger's collapse and the loss of economic sovereignty when Ireland was bailed out by the IMF and the European Central Bank, Fianna Fáil lost the faith of an electorate who perceived the party as too close to a nexus of bankers, speculators, builders and other corporate interests. Martin insisted however that the party had changed the way it was funded and was becoming once more a grassroots national organisation.

"Fine Gael [the main party currently in government] are no slouches when it comes to gaining corporation donations. When they were in government between 1994 and 1997 they used corporate donors to erase about €1m of party debt. But perception can be as important as reality in politics. So in the run up to the general election Fine Gael told all its candidates to keep saying 'Fianna Fáil, bankers, debt …' and it clearly worked. We have now banned corporate donations and concentrate on raising finances through a national draw."

Martin said he did not fear being eclipsed as the main opposition party by Sinn Fein, some of whose Dáil deputies outshine Fianna Fáil ones in debates inside the Irish parliament.

"They have no constructive, alternative policies. They are simply engaged in oppositional politics not realistic policies for governing the country," he added.