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Sinn Fein Surge Leaves Irish Frontrunner With a Big Dilemma

Sinn Fein Surge Leaves Irish Frontrunner With a Big Dilemma

(Bloomberg) -- Sinn Fein’s surge has left Micheal Martin with the dilemma of a lifetime -- does he bring the left-wing Irish nationalists into government?

Fianna Fail leader Martin, 59, is on track to control the most parliamentary seats after the Feb. 8 election, but will fall far short of a majority. Sinn Fein won the popular vote, but is set to be a single seat behind Fianna Fail.

An alliance between the two offers the potential for a durable government. Trouble is, the former foreign minister has consistently ruled out an alliance with Sinn Fein, long considered toxic for its links to the Irish Republican Army terrorist group and left-wing policies. For Martin, though, this is probably his best and maybe last chance to be prime minister.

Sinn Fein Surge Leaves Irish Frontrunner With a Big Dilemma

Already, internal splits appear to be emerging in his own party, with some arguing he should at least open talks with Sinn Fein leader Mary Lou McDonald, and others pushing him to stick by his pre-election pledge.

On Monday, as the count continued after the most seismic Irish election in a generation, the Fianna Fail’s deputy leader Dara Calleary walked a fine line on the prospects for government with Sinn Fein.

“We made it very clear before the election we couldn’t work with Sinn Fein in government, that we’d have policy difficulties,” Calleary said in an interview with broadcaster RTE. “We certainly will engage with them, we’re not going to refuse to talk to them, but let’s be in no doubt that those policy difficulties and those principles are still difficult hurdles.”

Fianna Fail will take 38 seats in Ireland’s 160-seat parliament, broadcaster Virgin Media projected on Monday.

Sinn Fein will have 37 seats, the broadcaster said, with Prime Minister Leo Varadkar’s Fine Gael 35 seats. All will be short of the 80 needed for a majority.

Irish stocks dropped, with the benchmark index falling as much as 1.4%, led by a decline in banking stocks, as investors fretted over Sinn Fein’s influence over government policy.

Coalition Talks

Bookmaker Paddy Power made a Fianna Fail-Sinn Fein-Green grouping the most likely outcome, and Martin has already started softening his position. Late on Sunday, as the scale of Sinn Fein’s surge emerged, Martin said he accepted his “obligation” to find a functioning government.

“I’m very glad that Micheal Martin has it seems come to his senses,” Sinn Fein’s McDonald said on Monday. “That there would be an active campaign to exclude us was completely wrong.”

Before Martin, every Fianna Fail leader has become prime minister. The slim, fit former history teacher has returned the party to the cusp of power, almost a decade after they oversaw one of history’s worst economic collapses and national economic humiliation.

Sinn Fein Surge Leaves Irish Frontrunner With a Big Dilemma

Martin was foreign minister in the government that was forced to ask for an international bailout in 2010 after Ireland was locked out of bond markets. Martin took over as party leader months later, and has spent the last decade nursing Fianna Fail, long the nation’s dominant party of government, back to health.

Counting Continues

As of 8:50 p.m. in Dublin on Monday, Sinn Fein had tallied 37 lawmakers, compared to a combined 32 for Fine Gael and 31 for Fianna Fail. Some 146 seats have been filled, with 14 left.

Fianna Fail says it’s against sharing power with Fine Gael, because voters want Varadkar’s party out of power. A deeper reason may be a fear that a centrist alliance in government could give Sinn Fein a free run as the biggest opposition party, handing it a platform to take power after the next election.

Martin “may have no choice than to seek a coalition with Sinn Fein,” Conor Lenihan, a former Fianna Fail government minister, said in a telephone interview. “If Fianna Fail is the biggest party, then they have to try to form a government.”

Yet many party members, particularly in Dublin, are queasy about bringing Sinn Fein in from the cold and risking alienating the party’s middle class support base.

“Our word is our bond,” Fianna Fail lawmaker Jack Chambers said.

There is another option for Martin -- a grand coalition with Varadkar’s Fine Gael. The traditional divide in Irish politics runs between Fine Gael and Fianna Fail, but they’re separated by little except where they stood on the division of Ireland in 1921.

While Varadkar has made clear he’s open to an alliance, for now, Martin is keeping its options open.

“We’ll talk to anyone with a credible plan, “ Calleary said.

To contact the reporters on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net;Peter Flanagan in Dublin at pflanagan23@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Richard Bravo, Ben Sills

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