Sinn Fein Pushes for Power as Irish Parties Limber For Talks
Sinn Fein Pushes for Power as Irish Parties Prepare For Talks
(Bloomberg) -- Sinn Fein prepared to play a pivotal role in efforts to form a government, after smashing the two-party system which dominated the Irish state for much of its history.
After winning the popular vote in the Feb. 8 general election, Sinn Fein party leader Mary Lou McDonald laid out a plan to forge a left-wing alliance with parties including the Greens and the Social Democrats. Coalition talks are set to start in earnest in coming days.
“We want to find a route to government,” Matt Carthy, one of the party’s lawmakers, said in an interview with RTE on Tuesday. “All parties should talk to us.”
Sinn Fein will control 37 seats in the 160-seat parliament. That will it leave it a whisker behind Fianna Fail, which won 38 seats. Prime Minister Leo Varadkar’s Fine Gael took 35 seats.
With no party anywhere close to majority, leaders are already laying down markers for the lengthy government formation talks to follow. Long an outsider because of Sinn Fein’s links to the IRA and left-wing policies, McDonald suggested on Monday she “may well be” the nation’s next prime minister and first female premier.
Varadkar has already rejected sharing power with Sinn Fein, as reminders of the party’s past quickly surfaced with successful candidates praising the IRA and its struggles against British forces.
By contrast, Fianna Fail leader Micheal Martin appeared to be softening his opposition to governing with Sinn Fein.
“Pre-election pledges on coalition will have to be abandoned, making any government arrangement difficult,” said Ryan McGrath, head of fixed-income strategy at Cantor Fitzgerald LP. “Fianna Fail will be left with little option but to retreat from their pre-election positions of ruling out coalitions with both Sinn Fein and Fine Gael.”
Ireland’s benchmark 10-year bond yield was five basis points higher at minus 0.07%, faring worst among its euro-area peers. Domestically-focused Irish bank and real estate stocks continued to fall on Tuesday even as benchmark ISEQ Index gained 0.7%.
Bank of Ireland Group Plc fell 2.3% while AIB Group Plc lost 0.8%. Home builder Glenveagh Properties Plc dropped 3.2%.
“The next Irish government may choose to relax its budgetary stance by raising public spending on investment and for social needs, without introducing offsetting revenue-side measures,” S&P Global Ratings said on Tuesday, though it added changes would be “modest and gradual.”
Betting odds suggest a coalition between Fianna Fail, Sinn Fein and the Green Party, which won 12 seats, is the most likely outcome. Fianna Fail’s Martin is the favorite to be prime minister with a 71% probability of taking the top job, according to bookmaker Paddy Power, with McDonald rated a 33% shot.
“I want us to be in government, but not at any cost,” McDonald, a 50-year-old Dublin native, said in an RTE interview on Monday. “I will speak to everybody because that’s what grown up people do.”
--With assistance from James Hirai.
To contact the reporter on this story: Peter Flanagan in Dublin at pflanagan23@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Dara Doyle
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