(Bloomberg) -- Ireland’s dominant political parties appear to have bucked the global trend of frustrated voters ousting incumbents, helped in part by a large pile of cash at their disposal to back election promises.
Coalition partners Fianna Fail and Fine Gael look almost certain to form the next government, on track to get close to the 88 seats needed for a majority in the 174-seat Dail, or parliament, according to the latest figures. With the backing of a smaller third party, or independent lawmakers, they should be able to get over the line.
While Ireland has seen its political landscape splinter in recent years, as well as the rise of opposition challenger Sinn Fein, the ruling parties’ saving grace was money.
Surging corporate tax revenues from US tech and pharma firms with operations in Ireland have contributed to a huge budget surplus. It gave the incumbents the financial heft to cut taxes and ramp up spending, helping to mitigate some voter frustrations about issues like housing and healthcare.
“They are awash with cash. They’ve got plenty of money and they’ve been able to offer lots of fancy things to the electorate,” said Aidan Regan, professor of political economy at University College Dublin. “So this is what explains why the incumbents in Ireland haven’t been penalized as they have been elsewhere.”
For Sinn Fein, which saw its upward momentum of recent years go into reverse, the election means that the party led by Mary Lou McDonald must continue to wait for its chance in government.
After months of dealing with internal crises, its vote share dropped to 19% from almost 25% in 2020. Both Fine Gael and Fianna Fail have ruled out a partnership with the left-wing party, which has past connections with the Irish Republican Army terrorist group.
The provisional result is in stark contrast to recent elections elsewhere, where incumbent leaders have been ousted or greatly weakened, including in the UK, US and France.
Coalition Talks
By late Sunday, more than 130 out of 174 seats in the parliament had been filled. Counting of votes under Ireland’s proportional representation system will continue Monday.
But the focus now turns to the negotiations on forming the next government, a process of horse trading dubbed “coalition-ology.”
In their previous partnership, Fianna Fail’s Micheal Martin and Fine Gael’s Simon Harris rotated the role of prime minister, known as Taoiseach.
While the election outcome points to a return of the status quo, the vote also highlights the recent transformation that has taken place in Irish politics.
Formed out of the Irish civil war, Fianna Fail and Fine Gael were traditionally rivals, and dominated politics since the formation of the state a century ago. But their support has declined, with Fianna Fail particularly hit in the aftermath of the 2008 property crash that decimated the country’s economy.
That eventually forced them into partnership to fend off new challenges, upending the long-standing narrative and opening the possibility that another party, such as Sinn Fein, could one day lead a government.
“We essentially have three medium-sized parties, and you need two of the three to form a coalition and some other combination of junior coalition partners,” said Lisa Keenan, assistant professor of political science at Trinity College Dublin. “It’s not going to be the case that Fianna Fail and Fine Gael will necessarily be those two parties in perpetuity.”
Third Party
As Fianna Fail and Fine Gael look for a partner, or partners, to get to a majority, they have potential options, such as Labour or the Social Democrats, both of whom saw gains.
Another option would be a group of like-minded independent members of parliament, something that was common when the parties governed alone, and needed just a few extra seats.
One possible advantage of independents is they might not seek as many concessions as a third party, particularly a left-leaning one. This could prove helpful in keeping the government on the same page when it comes to responding, for example, to the threat of trade tariffs and other measures by Donald Trump’s incoming US administration — and the impact that could have on Ireland’s corporation tax receipts.
Independents look for “particular constituency deals and once they have those deals they tend to be very loyal,” said David Farrell, professor at the school of politics in University College Dublin. That’s an advantage for the main parties as they don’t have to compromise on economic or investment policy, he said.
Immigration
Immigration doesn’t appear to have played a large part in the vote, with just 6% of people citing it as their main concern in an exit poll.
That’s despite the emergence of far-right agitators who have capitalized on frustrations in areas such as housing. That led to riots in Dublin a year ago as well as smaller, but often violent, protests around the country at accommodation earmarked for asylum seekers.
The coalition took a somewhat stronger stance on immigration in the months before the election, and this may have been enough to keep the issue from translating into a significant number of votes for anti-immigration candidates.
The money in the government coffers also appears to have kept any major widespread desire for change at bay, at least for now. Older generations who already own their own homes and have a comfortable living standard were more likely to have voted for the incumbents.
Voter turnout — below 60% — may also have helped Fianna Fail and Fine Gael. The exit poll suggests turnout was particularly low among younger voters, for whom Sinn Fein’s McDonald was the preferred choice for Taoiseach.
But with no clear path to power for her, some voters hoping for a left-leaning government were put off going to the ballot altogether, according to Farrell.
“They are voting with their feet, turnout has dropped again,” he said. “They wanted to vote for somewhere else, but there’s nowhere else for them to vote.”
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