What Happens After Irish Parliament Hits Deadlock: A Guideby
Parliament meets on Thursday for first time since election
No party leader has enough support to become prime minister
Ireland’s parliament meets in Dublin on Thursday for the first time since last month’s election and no party leader is expected to have the support to become prime minister.
What happens today?
Parliament meets at 10:30 a.m. in Dublin. The first item on the agenda is the election of a new speaker for parliament. Sometime this afternoon, lawmakers will vote on a prime minister, though no party leader has enough support needed for a majority in the 158-seat parliament.
In the Feb. 26 election, Kenny’s Fine Gael took 50 seats. Fianna Fail has 44, and Sinn Fein, 23. Kenny’s outgoing coalition partner, the Labour Party, has seven. On these numbers, only a first-ever Fine Gael and Fianna Fail combination could muster a stable majority.
After he loses the vote, Kenny continues on in a caretaker role.
How will it play out after that?
Parliament will be adjourned, and real negotiations between Fine Gael and Fianna Fail may begin. Talks will probably go on for many weeks, according to government minsters, and there are three alternative outcomes.
- A grand alliance between the two parties, probably the only recipe for a stable, long-lasting government.
- Fianna Fail could prop up a minority Fine Gael administration for a while, though Agriculture Culture Minister Simon Coveney suggested last week such an arrangement could be weak, unstable and “liable to fall at any time.”
- If talks fail, Ireland is facing another election.
What does all this mean for investors?
So far not much. The spread between benchmark bonds and German securities of a similar maturity narrowed to 64 basis points on Thursday from 83 basis points just before the election. That could change though. Finance Minister Michael Noonan said the markets may not remain so sanguine if Ireland remains without a government for a “significant” period.