Ireland / Bloomberg
Ireland’s two biggest parties may be forced to bury generations of conflict borne out of the nation’s civil war to form a grand coalition after Prime Minister Enda Kenny’s government suffered massive losses in election.
Kenny’s Fine Gael secured 25 percent in Friday’s election, according to a poll for broadcaster RTE, released on Saturday. Traditional rivals Fianna Fail secured 21 percent. Under Ireland’s electoral system, about 44 percent is needed for an overall majority.
Like governments in Greece, Portugal and Spain, Kenny’s alliance with the Labour Party emerged from Europe’s debt crisis to feel the force of popular wrath over spending cuts and tax increases. Kenny’s only option to provide political stability in the fastest-growing economy in the euro region is a pact with Fianna Fail, with bookmaker Paddy Power Betfair Plc placing an 80 percent probability on such a government coming together.
“At this stage, it has to Fine Gael and Fianna Fail or else a second election,” Eoin Fahy, chief economist at Kleinwort Benson Investors in Dublin.