'Progress' in coalition talks: Noonan

Talks on a potential coalition government are continuing with Fine Gael reporting progress as they hit the weekend deadline.

With the clock ticking to Labour Party’s special delegate conference tomorrow, Fine Gael negotiators appeared upbeat agreement could be reached.

Fine Gael’s Phil Hogan said there were no sticking points between the parties, dismissing reports of a row over the allocation of the coveted finance brief.

“Nobody went out with a bloody nose as far as I see anyway. We’re still standing,” he said.

Mr Hogan said the atmosphere in the talks was good and cordial, while the party’s finance spokesman Michael Noonan said progress was being made “all the time”.

Labour negotiator Pat Rabbitte claimed yesterday was D-Day for the talks.

The negotiations at Government Buildings are complex, with the parties at odds over the length of time it will take to turn around the budget deficit, tax, public sector cuts, water charges and how to tackle bondholder responsibility for banking debts.

While negotiators went head-to-head bargaining on policies Taoiseach-designate Enda Kenny was in Helsinki yesterday for a meeting of the European People’s Party, to which Fine Gael is affiliated.

Speaking from Helsinki, Mr Kenny said yesterday that his government is unlikely to burn senior bondholders in the banks, despite pre-election promises.

He rubbed shoulders with EU leaders including European Commission president Jose Manuel Barroso, European Council president Herman Van Rompuy and German chancellor Angela Merkel.

The contacts were intended to open the door for a charm offensive and garner support to renegotiate the €85bn loans.

Labour leader Eamon Gilmore travelled to Athens for a meeting of the Party of European Socialists.

Both men are due back in Dublin today.

The party negotiators have been taking briefings from economist Colm McCarthy, the Department of Finance, the National Treasury Management Agency and Central Bank governor Patrick Honohan.

Both sides claimed the information confirmed the depth of the crisis facing the country.

The negotiating teams have also gone head-to-head on their respective health and education policies.

Labour is under pressure not to strike a deal from both its youth wing, grass roots and the Unite trade union, which has called on the party to back away from joining with Fine Gael and form a strong left-leaning opposition.

The Fine Gael team is led by finance spokesman Mr Noonan, Phil Hogan, who masterminded the historic election success, and combative front-bencher Alan Shatter.

Labour’s negotiators include the party’s former leader Mr Rabbitte, deputy leader and finance spokeswoman Joan Burton, constitutional expert Brendan Howlin and policy director Colm O’Reardon.

A quick deal is needed as Ireland faces a series of challenging hurdles linked to its multibillion-euro bailout loans from the International Monetary Fund and Europe, and the banking crisis.