Irish crisis deepens amid fresh email row

Bloomberg

The controversy engulfing the Irish government and threatening Brexit talks escalated, as the release of a cache of emails threatened to further undermine the nation’s deputy leader and bring an election closer.
Deputy Prime Minister Frances Fitzgerald faces a no-confidence vote in Dublin over her handling of a whistle blower controversy that could pull down the minority government. In that case, an election would be held next month, Irish Prime Minister Leo Varadkar has said.
Varadkar and opposition leaders are due to meet again. Hopes that an election could be avoided were derailed after emails released by the Justice Ministry suggested that Fitzgerald may have known more about a potential legal strategy to discredit a police whistle blower than it earlier appeared. Fitzgerald said she did nothing wrong, and some colleagues continued to defend her publicly.
Fitzgerald “has made it quite clear that she had no hand, act nor part in that strategy,” Jerry Buttimer, a senator representing the ruling Fine Gael party, said in an interview with broadcaster RTE on Tuesday. “I believe her.”

INTENSE PRESSURE
Privately, however, Fitzgerald is coming under intense pressure to resign from some within her own party, according to Irish media reports. Political rivals dropped their earlier conciliatory tone after the release of the emails.Fitzgerald’s position is “no longer tenable,” Timmy Dooley, a spokesman for Fianna Fail, the biggest opposition party, said, adding he’s hopeful “cool heads” will emerge to resolve the situation without an election. The affair comes at a delicate time for the government, as it moves toward a decision on the Brexit process. Avoiding a hard border in Ireland is one of three key issues requiring “sufficient progress” before the European Union will allow efforts to move on to Britain’s future relationship with the bloc.

BREXIT COMPLICATION
“With Brexit discussions at a critical stage for Ireland’s strategic interests it is disappointing that domestic political matters are proving such a distraction,” said Philip O’Sullivan, an analyst with Investec Plc in Dublin. “We don’t believe that an election at this stage would change anything of substance on the domestic policy front, but it could add a complicating factor to the Brexit negotiations.”
In the middle of an election campaign, Varadkar may be less willing to make concessions on the border issue. Still, it might not make much of a difference in the longer term, as all the major parties have backed his approach to Brexit.
Also, an election may not alter the political landscape significantly, a Sunday Business Post poll published over the weekend suggested. Varadkar’s Fine Gael drew 27 percent, about 1 percentage point more than last year’s election. Bond investors are seemingly ignoring the escalating political risk, with Ireland’s securities climbing this week, following an initial drop. The country’s debt now trades nearer that of core European countries, such as Germany, than its peripheral peers amid an improving economic picture.