To many, the fresh reports come as a timely rejoinder in politics to what has been happening to Northern Rock in the world of high finance.
There have to be to willing parties to tango and the evidence is far from clear as to whether both parties are totally enthusiastic at the prospects of a merge-take-over. The starting point of an examination of the issues is here in the North. The halcyon days for the SDLP are becoming a distant memory. The party rightly regards itself as the architects of the Good Friday Agreement, and in the elections to the first Assembly the SDLP was the biggest nationalist party at Stormont and Seamus Mallon became Deputy First Minister. While the star of its then leader, John Hume, was rising the warning signs for the party were flashing but went largely ignored. Ten years later the SDLP has lost its European seat, has been easily surpassed by Sinn Fein. In the Assembly the party is down to 16 seats and holds one ministry in the power-sharing executive. Whenever Gordon Brown calls a General Election, and it could be within the next twelve months, the SDLP will be under severe pressure to hold its seats in South Belfast and South Down.

There have been calls from within the SDLP for the party actively to seek formal linkage with Fianna Fail. The most vociferous proponent of this has been Tom Kelly, a former vice-chairman and executive member of the SDLP. He has been urging such a course of action for quite a few years now. I have been dusting down some of the articles that he has written, which have plenty of shadow but little substance. In 'The Observer' four years ago, Tom Kelly wrote, 'The most appropriate option for the SDLP in the event of realignment is clear. The party most akin in its broad appeal, its competence in government and in its confidence and representation of the New Ireland is Fianna Fáil. It is a party with the support of ordinary decent people, who recognise what real political priorities are: health, education, employment. This is also the natural home of the SDLP'

Kelly does recognise that the SDLP was formed as a loose coalition of nationalist, republican, socialist and social democratic ideals politicians who were committed to exclusively peaceful and constitutional means. In the course of the last thirty years the SDLP has maintained a generally harmonious relationship with the major parties in the Republic. Tom Kelly and people of like minded disposition seem to have been making sweeping statements without producing a scintilla of evidence to support their claims. It is simply incorrect to claim Fianna Fail is 'the natural home' for all SDLP members and supporters. As a broad but shrinking church, the SDLP has a wider range of preferences in the politics of the Republic than simply Fianna Fail, the most obvious being its formal links with the Labour Parties in the Republic and GB and its socialist links in Europe.

The problems that face the SDLP are deep-seated and require radical surgery rather than the simplistic notion of seeking a white knight to come to the rescue. Some commentators such as Senator Eoghan Harris believe that Sinn Fein, having donned the mantle of a social democratic nationalist party is set permanently to displace the SDLP. I strongly disagree with such an analysis and it is precisely on these issues that the SDLP must go head to head with the Provisional movement. The recent General election in the Republic showed Sinn Fein to have no social democratic credentials. On social and economic policy issues, Gerry Adams huffed and puffed and was exposed as lacking any grasp of reality. Without the whiff of cordite and the appeal to misty romanticism, Sinn Fein came across as an old autocratic party similar to those in the former Soviet bloc. This was hardly surprising as the many writings of Adams contain a faithful and fawning attitude to the socialism that is no longer relevant.

On the second issue of nationalism, there is plenty of scope for the SDLP to challenge the flawed republican analysis that it is the responsibility of the British Government to be the persuaders of the unionist community. Republicans have never seen the need for nationalists to be the persuaders and the latest cop out from reality has been to peddle the notion that the Good Friday Agreement is a stepping stone to a united Ireland within the next decade.

Calls from within the SDLP for merger/ takeover whatever you call it by Fianna Fail are signs of defeatism and must be music to Sinn Fein ears. The nationalist electorate in the North has turned away from the SDLP and its present leadership. Will the re-branding and makeover with the Fianna Fail logo make this leadership any more attractive to the voters? Such move may even be counterproductive and leave Durkan & Co open to the accusation that they did not have the bottle to fight on their own principles and had to go running for someone else to fight their corner.

Political re-alignment in the Republic

While some elements of the media are intent on navel gazing and debating Bertie's intentions in moving Fianna Fail north of the Border, what they are missing is the real re-alignment of politics in the Republic. With regard to the North, Bertie will park the issue by simply setting up yet another committee under the chairmanship of the Minister for Foreign Affairs, Dermot Ahern to explore the idea. By the time this committee reports Fianna Fail will have a clearer picture as to whether the SDLP continues to exist or has disappeared into oblivion. As one Fianna Failer told me in Kerry the idea of the party mixing it with the Shinners in the northern constituencies would be akin to wallowing with pigs in the muck-there would be very little to be gained and the pigs would enjoy it!

The real realignment south of the border comes from the development of a very cosy relationship between Bertie and his Green party coalition partners in government. The belief that this coalition would barely see out the summer has been laid to rest and it is back to the drawing board for the other parties.

The pre-election Mullingar Accord between Fine Gael and Labour is now history and the new Labour leader, Eamon Gilmore has already signalled that he will pursue a more independent line than simply be seen as the cheerleader for Enda Kenny and Fine Gael. One of Pat Rabbitte's the last acts as Labour leader was to do an electoral deal with Sinn Fein that saw each party gain a seat in the Senate. As I see it the Labour party has been all but taken over by the old Workers' Party, better known in the north as the Stickies during the Troubles. I wonder whether the future of left wing politics in the Republic might actually see the coming together again of the pre-Troubles republican movement. The joke around Dublin is as follows- what is the difference between the Provos and the Stickies? Answer -about thirty years!

Some think that the groundwork for a new left wing coalition of the former republican socialist comrades is already underway. In the long run I cannot see such a grouping making much headway unless the latest wobbles in the financial world turn into a full blown economic crisis. The soft landing view of the present economic malaise is likely to leave Bertie's government facing growing hostility but just where would one see an alternative government coming from?

Any growth of a left wing alliance would leave the substantial conservative elements in Fine Gael not at all enthusiastic at the prospect of forming a coalition government with Labour. It is beyond my wildest belief that any future Fine Gael Taoiseach would want to be dependent upon Sinn Fein support. Yet this was precisely the position that Enda Kenny had to confront in the General Election if he was to be Taoiseach. He needed the support of every party in the Dail except Fianna Fail and this was not on, irrespective of how much he blustered that he was still in with a chance when the electorate had spoken.

In my student days a perceptive Fine Gael Minister and professor of constitutional law at UCD, John Kelly often talked and wrote that the natural coalition in Irish politics would be between Fianna Fail and Fine Gael. In policy issues there is little to tell the difference between them and if the electoral arithmetic next time round produces a hung Dail with the Left holding the balance of power, the country's interests may be best served by the new departure of a FiannaFail/Fine Gael coalition. Now that is a mouth-watering possibility and serious commentators and analysts should start preparing the electorate for such an eventuality.