Irish Rivals Urged to Resume Government Talks as Election Looms

Ireland’s biggest opposition party should return to government formation talks, a senior cabinet minister urged, as a second election this year moved closer.

Fianna Fail on Thursday rejected Prime Minister Enda Kenny’s offer to put together an unprecedented grand coalition with his Fine Gael party. Given no party won a majority in February’s election, Kenny now needs support from his historic rival as he try to forms a minority administration.

While Fianna Fail’s spokesman Dara Calleary said on Friday in Dublin that his party is prepared to “facilitate” a minority government, Health Minister Leo Varadkar said a written agreement is needed.

“Otherwise a government would always be looking over its shoulder,” Varadkar said in an interview with broadcaster RTE. “That’s not a good outcome for the country.”

If an agreement isn’t reached, another election looms. Paddy Power Betfair Plc places a 40 percent chance on another vote this year, and Varadkar said today it’s “important to be prepared” for that eventuality.

“In essence the situation has not changed, there are still only two potential outcomes, a Fine Gael minority government supported by both the Independents and Fianna Fail or an increasingly likely second election,” said Ryan McGrath, head of fixed-income strategy at Cantor Fitzgerald LP.

Parliament is due to meet again on April 14 to try to elect a prime minister after two failed attempts. Varadkar said that while Kenny could survive a third loss, the process of government formation “can’t go on for another six weeks.”

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