Finance chief says Irish may face 2nd election

Since Irish Prime Minister Enda Kenny swept into power in 2011, Irish bonds have returned about 92 percent, the best performance in the world, and before the election, he warned of the dangers of an inconclusive outcome.

Fine Gael and Fianna Fail, whose founders fought each other in a civil war that raged after the 1916 uprising, won about 50 percent of votes in a February 26 general election.

In an an echo of the sort of voter anger being heard in the United States this year, anti-establishment parties and independent candidates made significant gains, winning about 25% of the vote combined.

Eamon O Cuiv, deputy Fianna Fail leader and de Valera’s grandson, said a deal with Fine Gael would break pre-election promises not to unite and alienate the party’s core supporters and canvassers.

Sinn Féin now is the third largest party with 13.8% of first preference votes, while it has been a disastrous election for junior coalition partner Labour whose share of votes dropped to 6.6%.

Ireland could be on course for a historic coalition between two longtime political foes – the Fine Gael…

The results left Ireland’s 158-member Parliament with at least nine factions and a legion of loose-cannon independents. Though Fine Gael pushed for higher tax cuts during the campaign, both parties respect European rules limiting the deficit and vow to protect the nation’s 12.5 per cent corporate tax rate.

But that party, founded in 1905 by Arthur Griffith, was torn in two in 1922 amid civil war following Ireland’s acceptance of a treaty with Britain that offered autonomy, not full independence.

The coalition partners, Fine Gael and especially the smaller Labour Party, took a severe drubbing from voters still angry in the aftermath of the economic recession.

Health Minister Leo Varadkar, widely seen as the strongest contender to eventually succeed Kenny, said a grand coalition was not something he favoured, while Finance Minister Michael Noonan raised the prospect of a second election “very shortly”. The two perennial centrist heavyweights — governing Fine Gael and opposition Fianna Fail — remained virtually neck and neck, with Fine Gael winners of 31 parliamentary seats, Fianna Fail 30.

“We’re into a new era, we have seen in this election a seismic change”, Sinn Fein leader Gerry Adams said after he was re-elected in his County Louth constituency.

Options now include an election re-run, an unstable minority Fine Gael government supported by Fianna Fail, or a once-unthinkable alliance between the two parties, which have taken turns ruling Ireland since 1932.

“Fianna Fail has still got the psyche of being the natural party of government, of being this dominant party”, said Gail McElroy, political science professor at Trinity College Dublin. Not only did they not receive an overall majority, they are finding themselves in a struggle this morning to even consider forming a government. Kenny’s coalition with the Labour Party swept to power in 2011 with 55 per cent of the vote.

Speaking on RTÉ One, Kenny was asked what his next steps would be, and if he would be picking up the phone to call Fianna Fáil leader Micheal Martin. Traditional rivals Fianna Fail secured 21 per cent. Under Ireland’s electoral system, about 44 per cent is needed for an overall majority.

Detailed talks would start should the next scheduled meeting of Parliament on March 10 fail to elect a new government, it added.