'Trump effect' will resonate through 2025

What were the major political events of 2024 and what will they mean for us in 2025?

The obvious place to start is here in Ireland where the Government, as we all know, won the election. The big winner was Fianna Fáil and its leader, Micheál Martin, who will now – after some back and forth over January – be our next Taoiseach.

The question in the election was the status quo versus change, and the status quo won.

That was the result despite years of what was a torrent of negative commentary and seemingly negative sentiment towards the Government. How can we explain the win therefore, and what does it mean for the Government now?

The most likely explanation is that enough people decided that change might pose a risk to their financial situation, and voted for the status quo. Whatever the reason, what the election result proved is that opinion formers on traditional or social media do not decide who wins elections, and the Government were the beneficiaries of that – in an election year. What such opinion formers can do, however, is shape the way a government is seen while it is in office. That will be the price to be paid in 2025, as disappointment at the lack of change filters through, and is reflected in the commentary.

With the only change being a swap from Greens to Independents, the Government is very likely to get a strong reaction in the early part of 2025, as those opinion formers start to say it looks and sounds tired.

That will be compounded by the main political effect of the election, which is that the Government will be pulled more towards the issues and perspectives of the more traditional and rural, and away from the progressive and urban. You might think that is a good thing or a bad thing, but the effect of it will be to augment criticism of the Government by many of those who try and shape public opinion.

One wonders therefore whether before too long the Government will wish it had won a few fewer seats so that Labour or the Social Democrats could have had the necessary leverage to enter government with them. That would have freshened up the Government and warded off the shift towards focusing on attempts to extend the derogation on the nitrates directive and to build one-off houses, and away from the provision of alternative energy and bike lanes.

Instead, with much the same faces, the Government will be in danger of looking stale, quickly. There will be no honeymoon for the ‘new’ government. They had, therefore, better make some fast moves on housing, or that sense of staleness will become something altogether more serious. Housing in 2025 will remain the big domestic issue.

We didn’t hear much talk of the economy in the election, but it may well become an issue again as a result of the biggest political development in 2024: the return to the US Presidency of Donald Trump. There are so many things to say about what that means for 2025 that it could fill this newspaper, but it is the impact on Ireland that we will focus on today. 

Trump is a nationalist, politically and economically. That means he thinks that trade across the world doesn’t so much grow or even share wealth as transfer it. And he thinks too much of it has transferred out of the United States these past decades. He plans to get better trade deals for the US by threatening tariffs, which are taxes on imports, on America’s economic partners.

He also wants to bring home much American wealth which currently resides in other countries – and we are high on that list. US tariffs on the EU would affect our real economic performance in key areas like pharmaceuticals, and moves to bring home some of the monies that end up in our corporation tax returns could make 2025 very jittery indeed.

If that happens, 2025 will see the return of real politics here, when the Government – and the Opposition – will have to start debating hard choices, and not just how many hundreds of millions we should spend on what.

The other political impact of Donald Trump’s win will be felt here in how politics are discussed. Prior to 2024, Trump and his agenda could be dismissed as a minority view which fluked a win in 2016 and brought nothing but sheer chaos. The margin of his win last November changes that. He won, and he won big. That will seep into the way people see and discuss political issues here, in Europe and most especially perhaps in Britain.

Britain in 2024 saw Labour secure a landslide election victory, winning a massive majority with 412 of the 650 seats on offer. But this is where Britain’s electoral system is no more than a conjuror’s trick. Labour won no such landslide except in First Past the Post Wonderland.

They actually got one-third of the vote, 33.7% to be exact. The extent of their victory was because the Conservative vote collapsed and in the First Past The Post system, scores of Labour candidates became MPs even though their party’s national vote was only up by 1.6% from their disastrous result in 2019.

The Conservative vote fell not because millions of their voters switched to Labour, but because they switched to Nigel Farage’s Reform Party, which is more or less a Trumpian outfit. The Labour government has been at sea since it took office, with the weak state of the public finances at the root of many of their troubles. Perhaps they will regain their composure in 2025, but if they do not, and if the Tories do not recover their position, they may find themselves being overtaken by Reform. Those headwinds from America will influence all that too.

Meanwhile, our EU neighbours France and Germany are politically convulsed. President Macron is unable to form a stable government. French public finances are in an even worse state than Britain’s, and the parliament is dominated by the far right and the far left, with each happy to leave the centrist Macron like a puppet on a string. Some have even suggested he may be forced to resign.

Hovering all over this is Marine Le Pen, the candidate of the far-right National Rally party, for long known as the Front Nationale. If you see a lot of her on your TV screens during 2025, French politics will have gotten even more volatile.

Meanwhile in Germany, the government has collapsed, and elections are due in February. The far-right AFD Alternative für Deutschland, or Alternative for Germany party, is polling near 20% and is consistently (just) ahead of the Social Democratic Party, the mainstream left party in Germany.

France and Germany are the heart of the EU. The National Rally and the AFD will have taken great encouragement from Trump’s win in November, and both movements in their boots are anti-EU. The pattern of such parties doing well is repeated across many other countries in Europe. The EU has enabled us to become an advanced economy and brought a lot of wealth to Ireland. What happens there matters here. In 2025, we should perhaps pay more attention to it.