24 February 2016

Uncertain Irish election outcome means tricky coalition negotiations

The Irish election is set for 26 February and the outcome looks uncertain, yet there has so far been little attention paid. As the poll of polls below suggests, the incumbent Fine Gael party will once again be the largest party albeit likely with a smaller share of the vote. However, a repeat of its current coalition with the Labour Party looks unlikely to be enough to deliver a majority. Labour has seen its vote share decline significantly and even if it surprises in the election the two together are unlikely to reach the majority of 84 seats. This leaves a few potential post-election scenarios:

IRE Polls itemprop=

  • Fine Gael/Labour/Independents – one option which has been widely touted is for the current coalition to be recreated but with the support of a number of independents who broadly back Fine Gael. It’s unclear how many independents Fine Gael could count on and even whether Labour would definitely want to see a re-run of the coalition given how badly it has fared. It seems unlikely that this coalition would generate a large majority but it could probably generate one strong enough to govern.
  • Grand coalition Fine Gael and Fianna Fail – This would deliver a strong and stable government with a large majority but there is uneasiness about this alliance on both sides. Fianna Fail is well aware of the pitfalls of being the smaller party in a grand coalition as demonstrated by Labour’s travails in Ireland, Lib Dems in the UK and Pasok in Greece. Any decision by Fianna Fail to join such a coalition would need to be approved by a congress of its members, which reports suggest would be unlikely to support such a move. Furthermore, this would leave Sinn Fein as the main opposition party in Ireland completing its move from an extreme movement to a mainstream political party. This could further raise its profile and allow it to appeal to a broader base.
  • Minority-led government – one option is that a large party or grouping of parties could lead a minority government if no coalition could be found. This would still require tacit approval of one of the other large parties in order for the government to be approved and then for it to pass crucial legislation such as budgets. If Fianna Fail were to play this role it could still harbour concerns around seeing its support eroded by Sinn Fein.
  • Re-run elections – this is an outside scenario if none of the above are seen as viable.

So far the betting markets have a grand coalition as the most likely outcome, though its not clear if they take account of the first option described above. In any case, the negotiations could well prove tricky. With the rise of Sinn Fein and the spread of more populist parties across Europe, to which countless mainstream parties have fallen prey, Fine Gael and Fianna Fail will be particularly careful about their post-election moves.

It is also worth noting that according to Michael Marsh, Emeritus Professor of politics at Trinity College Dublin, around 25% to 30% of the electorate were undecided well into the campaign, meaning the result is incredibly uncertain.

How might the Irish election outcome impact Irish policy?

One reason why there may have been little attention paid is that, despite the uncertainty, the outcome is unlikely to mark a huge shift in policy. The path the current government has trodden has proven difficult but ultimately is seen to have delivered results.  Add in the fact that economic policy, even post bailout, is still watched closely by Brussels, and the exposure to market forces as Ireland returns to the markets, and there are unlikely to be any huge shifts.

Of course one wildcard in all this is the potential for Brexit. As we have noted before, this would have a significant impact on Ireland. It has not played much of a role in the campaign. However, Taoiseach Enda Kenny has touched on this risk to indirectly highlight his established credentials in steering Ireland through turbulent times, though he has chosen his words carefully and not overplayed this card given the sensitivity of the issue.