Pressure is on to conclude coalition negotiations

IN better times, there would be space for Fine Gael and Labour to enjoy their victories.

Fine Gael has won its record number of seats and emerged as by far the largest party in the Dáil. Labour, too, has won its record number of seats and has the most TDs in Dublin.

This is heady stuff for both parties, and to make it even better, their old foe Fianna Fáil has been well and truly vanquished.

But the celebrations, for the most part, were limited to Saturday night, with time yesterday to take something of a breather.

But not much of one. Fine Gael leader and Taoiseach-elect Enda Kenny will have been figuring out the choreography and strategy for the coming days. His Labour counterpart Eamon Gilmore will have been doing likewise.

They know there is no time to waste.

After the last general election, Fianna Fáil contacted the Greens on Thursday May 31 to start coalition talks and did not wrap up until Tuesday, June 12 — almost a fortnight later.

Fine Gael and Labour would love to have a fortnight to get this done, but have a massive time issue. These are the deadlines involved:

nOn Friday next, March 4, Enda Kenny is due in Finland for a meeting of the European People’s Party, an EU grouping of centre-right political parties. The meeting will involve all those EPP members who are heads of state. Attending will be European Commission president Jose Manuel Barroso and European Council president Herman Van Rompuy. On the agenda? Preparations for a special EU heads of state summit the following week. That summit will discuss initial proposals for a resolution of Europe’s debt crisis. Needless to say, then, for Friday’s meeting Mr Kenny will need a firm idea of the policy his government will be adopting on the issue.

* On Wednesday week, March 9, the Dáil resumes. But Labour leader Eamon Gilmore and his TDs cannot decide of their own accord to enter government. Should Fine Gael and Labour agree a programme for government, Labour must put the document to its party membership for approval. It would do this by way of a special delegate conference. So for a government to be in place by the resumption of the Dáil, Labour has to hold a conference and get approval — that means this coming weekend.

* On Friday week, March 11, the eurozone leaders, including Mr Kenny, will gather in Brussels to discuss initial proposals for strengthening the EU’s bailout mechanisms.

* On March 24/25, there will be a full EU summit in Brussels at which leaders will hope to agree a comprehensive package to address the continent’s continuing debt crisis. This will be the new Government’s best chance of reducing the costs of the bailout to Ireland.

It is because of these pressing deadlines, then, that Mr Kenny will ring Mr Gilmore today to offer him a place in coalition.

The two men may hold an initial face-to-face meeting, but either way, negotiating teams will be appointed by each party and discussions will get under way.

As Enda Kenny’s chief lieutenant, Phil Hogan is thought likely to lead the Fine Gael team, with Michael Noonan and Richard Bruton among other names mentioned.

For Labour, Brendan Howlin and Pat Rabbitte will almost certainly form part of the team. Party sources point to Ruairi Quinn or Roisin Shortall as possibilities also.

In normal times, a programme for government would be a comprehensive document addressing the major — and some of the minor — issues in every department.

But it remains to be seen on this occasion whether the two sides will opt for such a detailed programme, when there are huge fiscal and banking crises to be tackled and very little time in which to agree a deal.

“Personally, I think it would be a mistake in the present environment to produce the usual compendium of forestry and wildlife and everything that goes with it,” one source said last night about the possibility of negotiations.

“There are two big areas: the economy, and need for political and institutional reform. My feeling is we should focus on those.”

Even if the programme is limited to economic and political reform issues, there are numerous areas to be addressed:

* Fine Gael want a roughly 3:1 ratio of spending cuts to taxes in the years ahead, believing too much tax will kill the economy. Labour want a 1:1 ratio, believing public services will be devastated by too many spending cuts.

* Fine Gael want to get the deficit down to 3% of GDP by 2014, in line with the bailout agreement. That would mean another €9bn or so of adjustments between now and then. Labour want to extend the deadline to 2016, and cut only €7.1bn between now and 2014.

* Fine Gael want to sell some “non-strategic” semi-state companies to help finance a €7bn investment in new infrastructure. Labour, as a general rule, oppose the sale of state assets and have different proposals for a stimulus package.

* On political reform, both parties agree on the need to abolish the Seanad, but Fine Gael also wants to cut the number of TDs, whereas Labour does not.

Away from policy differences, there are also personnel issues.

There are just 15 places at the cabinet table — 16 if you include the Attorney General — and both parties will want as many of them as possible. The general expectation is that Fine Gael would expect about nine of the 15 ministries, with the remainder going to Labour. But it’s not just about the numbers.

More importantly, both parties will want as many of the key ministries as possible, starting with Finance.

Fine Gael want Michael Noonan to be finance minister, and while Labour are less clear on their preferred candidate, it’s thought to be Pat Rabbitte.

And once the cabinet breakdown is determined, each of the leaders will have their own individual headaches choosing who should get which job.

But as former Fine Gael TD Bernard Allen notes elsewhere on these pages, neither party will be able to afford an unseemly spat over cabinet positions. The public expect them to get down to business quickly rather than fight over jobs. And given the deadlines they face, they will have little other choice.