(Bloomberg) -- Ireland is heading for a return of the coalition government led by Prime Minister Simon Harris’s Fine Gael party and Fianna Fail, as voters bucked a recent international trend of ousting incumbent parties.
With more than two thirds of the results announced, Fianna Fail and Fine Gael were together on track to get more than 80 seats. They need 88 for a majority in the 174-seat Dail or parliament, so a deal with a smaller party or independent lawmakers would likely get them over the line. Both have ruled out working with Sinn Fein, which was expected to win close to 40 seats.
The final standings are unlikely to be clear until Monday or later.
The premier called the election early — it wasn’t due until March — to try to take advantage of a surge in the polls since he became Taoiseach in April. What the media dubbed the “Harris hop” didn’t survive a gaffe-ridden campaign, and it was Micheal Martin’s Fianna Fail that jumped ahead in the popular vote and potentially in total seats. That could give him the upper hand in coalition talks.
But the bigger picture is that the two parties that have dominated Irish politics since the state was founded 100 years ago have likely been returned by voters. In Fine Gael’s case, it’s possible the party will have been in power for almost two decades by the time of the next election.
While Harris’s Fine Gael had a significant poll lead ahead of the campaign, much of the focus was on whether growing concerns about rising immigration — and the pressure it put on housing supply and public services — would hurt the government, as happened in recent elections in the US, UK and parts of Europe.
In the event, the threat posed by independents didn’t materialize, or at least not at the level that would radically shape the makeup of the parliament.
The spending power available to the government, underscored by a giveaway budget in October, was likely a key reason why. Ireland enjoys a budget surplus that is rare among European nations, driven by tax receipts from US firms including Apple Inc. that have made the country their regional headquarters. Management of Ireland’s billions was front and center in the campaign, with parties competing on promises to fix infrastructure and build houses.
“They’re able to make these promises because Ireland at the moment is in a good position fiscally,” said Lisa Keenan, political science assistant professor at Trinity College Dublin. “There’s a significant pot of money there for the government to say that it’s going to spend.”
The reelection of Donald Trump, and his threat of trade tariffs that could upset those tax receipts, may also have injected a sense of caution among voters.
Still, the two major parties do have cause for concern. While Sinn Fein’s support dropped compared to 2020 after a roller-coaster year, the party’s emergence since McDonald took over from Gerry Adams as president in 2018 — becoming its first leader unconnected to the sectarian violence in Northern Ireland known as the Troubles — has upended politics in the Republic.
Its left-leaning agenda has appealed to voters struggling with the cost of living, and Sinn Fein looks established as an electoral force with major implications for Irish politics. Fianna Fail and Fine Gael now likely need each other to get into power, shifting the dynamic of a rivalry that dates back to the Irish civil war.
McDonald is also building considerable personal support, especially among young people. The official exit poll showed her just behind Martin, and well ahead of Harris, on the question of who should be next Taoiseach.
For now, though, the focus is on the formation of the next government. Much will depend on the final seat count, and the political dynamic between Harris and Martin. Having reached an agreement last time on time-sharing the role of prime minister, a similar deal is expected this time.
But that could change if Fianna Fail, the party that was frozen out of power for about a decade after overseeing the 2008 financial crisis, wins significantly more seats than Fine Gael. Martin will be happier of the two leaders, according to Aidan Regan, professor political economy University College Dublin.
“The closer the two parties are together, the higher the probability of a rotating Taoiseach,” Regan said. “The further they are apart, the more tension, the more conflict emerges over that.”
It’s a far from what Harris likely envisaged when he was riding high in the polls. But his campaign was beset with slip-ups, including a video that went viral of him walking away from a disability care worker and dismissing her view that the government wasn’t doing enough. He later apologized.
Voter turnout was 59.7%, the lowest since 1923, according to RTE.
Former Fine Gael Prime Minister Leo Varadkar, who struck the coalition deal with Fianna Fail after the 2020 election, said the slip in the polls showed Harris’s party didn’t escape the burden of incumbency entirely.
“The longer you are in office, the harder it is to win votes and the harder it is to win elections,” he told RTE late Saturday. “All around the world, governments are being booted out of office, incumbents are losing. And this is an example of a government that is being reelected — potentially with a different third coalition partner — but not an insignificant result in international context.”
Who that third coalition partner is could take weeks to decide. The Green Party, who were in government last time, are at risk of losing all but one of their 12 seats. The Social Democrats, whose leader Holly Cairns gave birth on election day, and Labour could emerge as options.
But after the tensions in government with the Greens, the two big beasts of Irish politics could decide independents would be easier to deal with.
(Updates with latest figures in second paragraph.)
©2024 Bloomberg L.P.