Kenny Faces Election Test as Obama Support Not Carried Home

Prime Minister Enda Kenny
Prime Minister Enda Kenny took power two years ago following Fine Gael’s best election result since Irish independence in 1922. He then raised taxes and cut spending to narrow what’s still the biggest budget deficit in the euro region. Photographer: Aidan Crawley/Bloomberg

Irish ministers are being feted by investors and politicians from Brussels to Washington. At home, voters are less enthusiastic.

Prime Minister Enda Kenny faces his toughest test at the ballot box since taking office in 2011 in a special election today after junior minister Shane McEntee took his own life in December. While polls show their Fine Gael party probably will cling to the seat, support for the coalition government is slumping as the economy struggles to grow.

“It’s too late for me,” Gerry Healy, 54, a former store owner in Meath, said after Finance minister Michael Noonan sketched out plans to help homeowners with mortgage arrears. “I handed the bank the keys to my house this week. My business went bankrupt in 2008. I’m part of a forgotten generation.”

Kenny took power two years ago following Fine Gael’s best election result since Irish independence in 1922. He then raised taxes and cut spending to narrow what’s still the biggest budget deficit in the euro region. While that’s winning support from investors, it’s costing him politically.

Ireland sold 5 billion euros ($6.5 billion) of 10-year bonds for the first time since it was locked out of debt markets in 2010, forcing the previous government to seek a bailout. U.S. President Barack Obama told Kenny last week he had shown “great leadership” guiding his country through the economic crisis.

Poll Slump

Among Irish voters, combined support for coalition partners Fine Gael and the Labour Party dropped 22 percentage points to 34 percent since the 2011 election, according to a March 4-14 poll of 985 voters commissioned by the Sunday Independent.

“This is a pattern emerging in polls now,” said Diarmaid Ferriter, a historian and author of “Transformation of Ireland: 1900-2000.” “There may be lots of talk about green shoots, but it’s hard to see them on the ground.”

Polls opened at 8 a.m. today with 11 candidates standing for election and 64,000 people eligible to vote, state broadcaster RTE reported. Voting takes place until 9 p.m. and the count is scheduled to start tomorrow.

Signs of stability are emerging in the economy as employment rose on an annualized basis in the fourth quarter for the first time since 2008. The jobless rate is still about 14 percent, almost triple the level of five years ago.

“Unemployment is the big issue for me,” said Donal Kavanagh, 72, a retired school teacher in the town of Kells, County Meath. “Young people now, even if they do have qualifications, have to move. I voted Labour last time. I definitely won’t vote for them this time.”

Mortgage Arrears

With the campaign in full swing, homeowners are getting their first bills under a property tax introduced by Noonan. The levy comes as one in four Irish mortgages are at least three months in arrears or have been restructured, the legacy of the biggest real-estate market collapse in western Europe.

Support for the Labour Party in particular has plunged, dropping to 9 percent from 21 percent in the 2011 election. Fine Gael has backing from 25 percent of voters, down from 36 percent, according to the Sunday Independent poll published on March 17. No margin of error was given.

“Whatever the government does, I’ll still be paying more money this year,” said Denis Fitzsimons, 64, a retired railway worker in Meath and another Labour voter turning away from the party. “I’ll be paying a tax on my house that I shouldn’t have to, all to help the banks.”

Fianna Fail

Fianna Fail, which presided over the demise of the Celtic Tiger economy, suffered the worst election result in its history two years ago. Since then, the party since has risen to 29 percent in the latest poll from 18 percent in 2011.

Fine Gael may hold on to the seat in Meath, after picking Helen McEntee, the daughter of the former government minister who committed suicide three months ago, as its candidate.

“Particular circumstances are at play here and the family name is still powerful in Irish politics,” said Ferriter. “But it could be close. Fianna Fail hasn’t gone away.”

Since the economic crisis emerged about five years ago, the government has introduced tax increases and spending reductions amounting to about 15,000 euros per family in Ireland, Kenny said in Washington on March 18.

“We don’t have any choice,” said Larry Reid, 60, a local council worker. “The cutbacks affect me, but if we don’t do it now, we will be in an even worse position.”

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