Ireland's Kenny to Fall `Well Short' of Majority, Cantor Says

  • Kenny's coalition on track for 62 seats, 17 short of majority
  • Ireland-German spread widest since September amid uncertainty

Irish Prime Minister Enda Kenny’s coalition government will fall “well short” of a majority in this month’s general election, Cantor Fitzgerald LP said, citing seat projections based on a poll of polls.

Cantor’s tally, based on five opinion polls since the end of January, shows the Fine Gael-Labour Party administration will secure 62 seats in the Feb. 26 ballot, 17 short of a majority. The coalition’s combined 37 percent support compares with 55 percent in the 2011 election, Cantor said.

As investors weigh the prospect of an uncertain outcome from the vote, the spread between Ireland’s 10-year benchmark government bonds and German securities of a similar maturity increased to 73 basis points, the widest since September, from 44 basis points just over two weeks ago. While Fitch Ratings upgraded Ireland by one level to A last week, it warned an inconclusive result poses a “downside risk” to the nation’s finances.

Ireland’s debt office said on Monday in Dublin it will sell 1 billion euro ($1.1 billion) of 2026 bonds on Feb. 11.

As the campaign intensified, Fine Gael minister, Leo Varadkar, on Monday confirmed plans to introduce a “high-income levy” of 5 percent on income above 100,000 euros, to claw back benefits to the wealthy of abolishing an emergency tax introduced during the financial crisis.

Opposition party Sinn Fein said Fine Gael’s plan would still disproportionately benefit the wealthy, suggesting Kenny, for example, would gain more than 8,000 euros a year from the move.

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