(Bloomberg) — Ireland’s focus turned to government formation, after a surge in Sinn Fein’s support upended the nation’s traditional two-party power structure.
Counting through Sunday confirmed the nationalists’ strength after an exit poll showed a virtual dead heat between Irish Prime Minister Leo Varadkar’s Fine Gael as well as the biggest opposition party, Fianna Fail, and Sinn Fein. Fianna Fail leader Micheal Martin predicted his party would win the most seats, a position which would leave him in prime position to lead a coalition.
There’s “significant incompatibility” between his party and Sinn Fein, Martin said, although accepting an “obligation” to find a functioning government. Late on Sunday, state broadcaster RTE projected Fianna Fail would win 45 seats, Sinn Fein 37, and Fine Gael, 36 — all far short of the 80 needed for a majority.
The former political wing of the IRA presented itself as a left-wing alternative to the centrist consensus which has largely dominated government since the foundation of the state in the 1920s. While that drove a surge in its support, Varadkar continued to rule out a deal with Sinn Fein.
“It’s astonishing Fine Gael and Fianna Fail want to wish us away,” Sinn Fein leader Mary Lou McDonald said in an interview with RTE. “People want decent government, working people want a party leading government that stands up for regular citizens.”
The election represents a “seismic” shift in Irish politics, McDonald said, with Fine Gael and Fianna Fail facing an unprecedented threat to their stranglehold on power. The electoral math of a system shattered by its rise means Sinn Fein is unlikely to lead the next government, but its surge speaks to the shifting tectonic plates that are upending traditional power structures across Europe.
In a sign of the party’s rise, its candidate topped Varadkar to take the first seat in his district, though the Irish leader was later elected.
“The exit poll suggests a great degree of fragmentation, which will make government formation very difficult,” according to Eoin O’Malley, a politics professor at Dublin City University. “There’ll have to be significant compromise, and rowing back from election commitments, or else Ireland will be voting again this year.”
As of 10:15 p.m. in Dublin, Sinn Fein had 29 lawmakers, Fine Gael and Fianna Fail a combined 15, though that picture will change considerably through the night.
Varadkar’s Fine Gael won 22.4% of votes in Saturday’s election, according to the exit poll. Sinn Fein won 22.3%, according to the Ipsos/MRBI poll of 5,000 voters, putting it line for its best-ever performance.
In the 2016 election, the party won 14% of the vote.
Sinn Fein, though, didn’t run nearly enough candidates to take advantage of its strength and become the dominant force in parliament. Fianna Fail, which oversaw the nation’s international bailout in 2010, secured 22.2% in the poll, which has a margin of error of 1.3 percentage points.
The traditional divide in Irish politics runs between Fine Gael and Fianna Fail, separated by little except where they stood on the division of Ireland in 1921. Both share Brexit policies, broadly agree on economic and fiscal policy and vow to protect the nation’s 12.5% corporate tax rate.
The policy gap with Sinn Fein is “too wide” to form a coalition, Enterprise Minister Heather Humphreys said on Sunday.
While Sinn Fein’s main historical mission has been to reunite the two parts of the island of Ireland, it has morphed into a broader left of center party, with a particular focus on housing.
A Fine Gael or Fianna Fail-led government “would largely mean continuity from a financial and economic policy perspective,” said Bert Colijn, an economist with ING Groep NV. “Sinn Fein’s proposed policies would represent a significant move to the left.”
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