Two months after the general election, the two largest parties in the 26 Counties have reached a potentially historic agreement to form a minority government.
Talks between the two parties born out of Ireland’s civil war more than 90 years ago, Fianna Fail and Fine Gael, ended on Friday afternoon following weeks of negotiations.
The parties reached agreement on several key issues including water charges and rent supplement increases, although details remain scant. They hope the deal will convince enough independents to support it and allow a Fine Gael-led government function with Fianna Fail agreeing to not oppose key votes.
Fianna Fail has reportedly agreed on the outline of three annual fiscal budgets. However, most observers have predicted the arrangement is unlikely to last three years and have predicted an early election.
Caretaker Taoiseach Enda Kenny and Fianna Fail leader Micheal Martin are expected to talk again over the weekend before the Dublin parliament reconvenes to attempt to elect a Taoiseach on Wednesday.
Fianna Fail’s Michael McGrath said he was “pleased and relieved to have come to the end of the formal negotiations between the two negotiating teams”.
Fine Gael’s Paschal Donohoe said the parties had reached agreement “across a variety of areas”.
“Intensive work will now continue into the text of the agreement between both parties that will then be shared with the Taoiseach and the leader of Fianna Fail and then with our respective parliamentary party meetings,” he said.
The deal is being seen as a potential first step towards a ‘grand coalition’ between Fianna Fail and Fine Gael, bitter rivals despite sharing a traditional conservative outlook.
A plan for a much bigger budget giveaway in October than previously anticipated reportedly helped seal the deal on Friday night. Fianna Fail is also understood to have promised to support the current Lansdowne Road agreement on public sector pay. With strikes threatened in several sectors, the two parties have agreed to establish a commission on pay in the public sector to reach a new deal by 2018.
The most contentious issue of water charges has been kicked down the road, with the charges suspended for three years. This provoked a mini-backlash from Fine Gael leadership hopeful Leo Varadkar, who said it was “not in the national interest”. He also criticised Fianna Fail’s focus on water during government formation talks as “surreal” and “ridiculous”. Michael McGrath hit back, describing Varadkar’s comments as “deeply unhelpful, unnecessary and self-serving”.
Sinn Fein President Gerry Adams accused Fianna Fail of campaigning in the election to put Mr Kenny out of office, but in the end striking a deal to keep him there. He said Fianna Fail had forfeited its right to lead the opposition.
“Whatever deal has been reached will I have no doubt fallen well short of delivering the change and investment required to tackle the housing and homelessness crises and fix our health service, and will not bring about a fairer, more equal society, as Fianna Fail claimed to want to deliver in their manifesto,” he said.
“It will also not deliver what citizens demanded on water - which is the outright abolition of water charges and the dismantling of Irish Water.
“Sinn Fein are very clear in stating that we will hold Fianna Fail equally accountable for every decision taken, and those not taken, by an incoming government.”