- Prime Minister Enda Kenny looks like losing majority
- New water charges, property tax weigh on the government
Ronan Meagher has had enough.
For the first time in his life, the 33-year-old joined a political movement, volunteering with the Anti-Austerity Alliance in Ireland. He’s been enraged by rising housing costs and the prospect that the state-owned apartment where he’s lived with his girlfriend for the last four years may be sold to overseas investors.
“We have no chance of buying a home at this point, ” said Meagher, who works in events management. “People are just so angry and feel betrayed. The government has no strategy for dealing with this.”
The Dubliner and thousands like him are poised to unleash their protest in an election on Friday that threatens to turn Ireland into the latest country to emerge from Europe’s debt crisis only to feel the force of popular wrath over spending cuts and tax increases. Unlike Greece, Portugal and Spain, Ireland stands out because the economy is the fastest-growing in the euro region and unemployment is falling more quickly.
But hurdles are ahead. As well as a slowdown in global growth and the European Central Bank struggling to kick-start the euro region, the U.K. will vote on membership of the European Union on June 23, with Ireland the most exposed to the fallout of any decision to leave. Just as new threats to the economic revival multiply, Irish voters look set to rob Prime Minister Enda Kenny, 64, of his majority.
“We always need firm purposeful government, but we need it even more now with the kind of dangers that are facing us,” said Alan Dukes, who led Kenny’s Fine Gael party between 1987 and 1990 and raised the possibility of repeat elections this year. “It would be very easy to dissipate some of the gains that we have made.”
As the election campaign intensified, Kenny pointed to Spain and Portugal as examples of the danger Ireland faces. Portugal took weeks to form a government after there was no clear winner from an Oct. 4 election, while Spain is still without one more than two months after Prime Minister Mariano Rajoy lost his majority.
Support for Kenny’s Fine Gael-Labour Party coalition is running at about 35 percent, according to five polls published since Sunday. The alliance drew 40 percent in a new poll released on Thursday in Dublin by TheJournal.ie. To win a second term, they need about 44 percent, according to Philip O’Sullivan, an economist at Investec Plc in Dublin.
Added to the mix is the lack of a viable alternative. Support for Fianna Fail, once one of Europe’s most successful parties at the ballot box, is hovering at about 20 percent. Its leadership has so far ruled out governing with Kenny or Sinn Fein, the former political wing of the Irish Republican Army that’s turned into an anti-austerity crusader and led the polls as recently as a year ago.
Amid a splintering of votes to minor parties, Kenny’s coalition may win 60 seats, short of the 79 needed for a majority, Cantor Fitzgerald LP said on Monday. That could leave Kenny scrambling to form a first-ever grand coalition with Fianna Fail or an alliance with more than two parties from among groups like the Greens and independents.
At face value, the move away from Kenny seems hard to fathom, and he branded his opponents “whingers.” He later apologized.
Ireland’s prosperity is recovering under his stewardship, the economy growing a projected 4.5 percent this year. While the spread between Ireland’s 10-year benchmark government bonds and German securities of a similar maturity has increased to 77 basis points from 44 basis points six weeks ago, 10-year bond yields dropped to 0.90 percent on Thursday.
Unemployment is back below 9 percent as companies like Twitter Inc. and Google Inc. flood into the empty offices left by the nation’s economic collapse in 2008.
“You couldn’t argue” about the government’s economic performance, said Gene Murtagh, chief executive officer at Cavan-based Kingspan Plc, adding he’s keen to maintain “some version of the direction of travel we’ve had for the last few years.”
Yet, there’s a sense that the recovery hasn’t touched many families as household incomes failed to keep up with rising bills.
For some voters, it’s the new water- and property-levies Kenny’s coalition imposed to close the budget deficit during Ireland’s 2010-2013 bailout program. For others, it’s a failure to improve health and education, or, like Meagher in north Dublin, deal adequately with surging rents and increasing levels of homelessness.
While voters know they would have had to endure years of austerity under any government, they are still eager to lodge a protest, said Eoin Fahy, chief economist at Kleinwort Benson Investors in Dublin.
“The public shows no sign at all of gravitating towards the ‘we can’t risk change at a time of uncertainty’ position,” he said.