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Europe

Irish prime minister in waiting announces coalition deal

The leader of the center-right Fine Gael, Enda Kenny, has agreed to a coalition with the center-left Labour party. Ireland's two biggest parties have several ideological differences but plan to address them later.

Enda Kenny

Kenny has sealed the coalition deal he needed for a majority

Ireland's next prime minister, Fine Gael party leader Enda Kenny, announced a coalition deal with the country's second largest party, Labour, in the early hours of Sunday morning.

"I am happy to tell you that we have concluded an agreement," Kenny told reporters. "Some of the finer details are now being worked out for presentation to both parties."

Fine Gael is by far Ireland's best represented party with 76 seats, but doesn't have a parliamentary majority by itself. Labour, with 37 seats, is now the country's second largest faction, after Ireland's former ruling party, Fianna Fail, suffered a massive election defeat last week amid public discontent over its handling of the country's economic downturn.

Both center-right Fine Gael and center-left Labour campaigned on a pledge to renegotiate the terms of Ireland's 85-billion-euro ($119-billion) emergency loans package from the EU and IMF, granted last November to keep the debt-ridden country solvent.

They may succeed in securing a reduced interest rate on the loans provided, but their demands for bondholders in Irish banks to take on some of the losses look set to fall flat. Kenny acknowledged on Friday that many EU governments opposed this suggestion, saying that one leader told him there would be "no free lunches."

Polarized policies

Eamon Glimore, giving a speech

Gilmore and Labour are not natural bedfellows for Fine Gael

The desire to renegotiate the terms of Ireland's international financial assistance is one of the few policies shared by the ideologically opposed partners.

The two parties campaigned on divergent policies when it came to scaling back public services, how to best balance deficit reduction between tax rises and spending cuts, and how quickly Ireland should aim to reduce its budget deficit to the EU's prescribed limit of 3 percent of Gross Domestic Product.

"They are issues that we will be signing off on in the morning," Labour leader Eamon Gilmore told reporters, alluding to plans to publish their program for government later on Sunday.

Gilmore also said he was happy with the deal he had struck with Kenny and Fine Gael, but would not reveal how many cabinet spots he had secured as minority partner.

Labour politicians were set to convene on Sunday to approve or reject the proposed coalition, a process Fine Gael lawmakers will also have to complete.

Author: Mark Hallam (dpa, Reuters)
Editor: Toma Tasovac

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