Irish parties agree to form coalition
Source: Agencies |
March 7, 2011, Monday
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THE two opposition parties that triumphed in Ireland's election, conservative Fine Gael and left-wing Labour, announced yesterday that they have agreed to form the country's next coalition government following five days of negotiations.
The proposed pact still needed to be ratified at separate meetings of both parties later yesterday. But the leaders of Fine Gael and Labour, Enda Kenny and Eamon Gilmore, said they were confident this would happen, while some key issues - such as the share of Cabinet posts - would remain unsettled for a few more days.
Approval of the joint government platform - which includes goals on slashing Ireland's deficits in line with its international bailout - would permit Fine Gael and Labour lawmakers to elect Kenny prime minister when the new parliament convenes on Wednesday.
Fine Gael won 76 seats and Labour 37 in the 166-member parliament in the February 25 election. Both were record highs that reflected voter fury at the long-dominant Fianna Fail party, which was blamed for leading Ireland to the brink of bankruptcy.
In November, Ireland was forced by European Union partners to negotiate a potential 67.5-billion-euro (US$94 billion) line of credit from European Union and International Monetary Fund donors. The bailout became unavoidable as Ireland's largely state-owned banks found themselves unable to borrow on open markets and faced insolvency.
Fine Gael and Labour both campaigned on platforms lambasting the bailout and threatening to renegotiate its terms. But both are already backtracking publicly now that the votes have been counted and they face responsibility for corking Ireland's financial black hole.
Officials in both parties said yesterday the new government would try to stick to the EU-IMF goal of slashing 15 billion euros from Ireland's deficits in the coming four years and reduce the 2015 deficit to three percent of gross domestic product, the eurozone limit. The two parties remain divided, however, on the smartest way to do this.
Fine Gael favors billions more in spending cuts on top of those already imposed since 2008, while Labour - seeking to protect welfare benefits and state jobs - wants more taxes particularly on higher earners.
Analysts say the new government will have no choice but to do both, since Ireland's deficit in 2010 was a modern European record of 32 percent of GDP including exceptional bank-bailout costs.
Even excluding those, Ireland last year spent more than 50 billion euros but collected just 31 billion euros in taxes, a gap that Fianna Fail had already committed to narrowing this year with 6 billion euros in cuts and tax hikes announced in -December. The new Fine Gael-Labour -government would be responsible for deciding on the remaining 9 billion euros in deficit cuts sought by EU-IMF donors.
Despite coming from broadly different bases, Fine Gael and Labour have governed Ireland together in six governments since 1948.
Fine Gael is pro-business and pro-EU with strong ties to the middle class and farmers. Labour defends union interests, largely represents urban, working-class voters, and can be far more critical of the EU.
The proposed pact still needed to be ratified at separate meetings of both parties later yesterday. But the leaders of Fine Gael and Labour, Enda Kenny and Eamon Gilmore, said they were confident this would happen, while some key issues - such as the share of Cabinet posts - would remain unsettled for a few more days.
Approval of the joint government platform - which includes goals on slashing Ireland's deficits in line with its international bailout - would permit Fine Gael and Labour lawmakers to elect Kenny prime minister when the new parliament convenes on Wednesday.
Fine Gael won 76 seats and Labour 37 in the 166-member parliament in the February 25 election. Both were record highs that reflected voter fury at the long-dominant Fianna Fail party, which was blamed for leading Ireland to the brink of bankruptcy.
In November, Ireland was forced by European Union partners to negotiate a potential 67.5-billion-euro (US$94 billion) line of credit from European Union and International Monetary Fund donors. The bailout became unavoidable as Ireland's largely state-owned banks found themselves unable to borrow on open markets and faced insolvency.
Fine Gael and Labour both campaigned on platforms lambasting the bailout and threatening to renegotiate its terms. But both are already backtracking publicly now that the votes have been counted and they face responsibility for corking Ireland's financial black hole.
Officials in both parties said yesterday the new government would try to stick to the EU-IMF goal of slashing 15 billion euros from Ireland's deficits in the coming four years and reduce the 2015 deficit to three percent of gross domestic product, the eurozone limit. The two parties remain divided, however, on the smartest way to do this.
Fine Gael favors billions more in spending cuts on top of those already imposed since 2008, while Labour - seeking to protect welfare benefits and state jobs - wants more taxes particularly on higher earners.
Analysts say the new government will have no choice but to do both, since Ireland's deficit in 2010 was a modern European record of 32 percent of GDP including exceptional bank-bailout costs.
Even excluding those, Ireland last year spent more than 50 billion euros but collected just 31 billion euros in taxes, a gap that Fianna Fail had already committed to narrowing this year with 6 billion euros in cuts and tax hikes announced in -December. The new Fine Gael-Labour -government would be responsible for deciding on the remaining 9 billion euros in deficit cuts sought by EU-IMF donors.
Despite coming from broadly different bases, Fine Gael and Labour have governed Ireland together in six governments since 1948.
Fine Gael is pro-business and pro-EU with strong ties to the middle class and farmers. Labour defends union interests, largely represents urban, working-class voters, and can be far more critical of the EU.
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