Taoiseach Leo Varadkar has told his party that if Fianna Fáil and the Greens do not agree to reduce the State’s debts in coalition, then maybe it is better “not to go into government with them now”.
The warning from the Fine Gael leader comes as the coalition talks hit shaky ground over climate action, pension reforms, and transport as a deadline for a deal slips even further away.
Mr Varadkar also said that Fine Gael is trying to ensure methane emitted from cows is “treated differently” in emissions data and that farmers get “decent” money in any deal.
The private meeting with TDs, MEPs, and senators heard doubts about the government formation talks.
The biggest warning from Mr Varadkar was over a row with the other parties to reduce the pension age to 65, a pledge made by Fianna Fáil in the election, by using an interim payment.
He said he did not want the talks to fail because Fine Gael was “too nasty”, but the party’s position was the State pension could be collected at 66 if a person was no longer working.
Reducing it further to 65 would cost the next government €2bn, and would send out a bad message to markets, he said.
Fine Gael would “compromise” with the pension age at 66, he said, but that was it.
Mr Varadkar told his party that Fine Gael wanted sustainable “economic growth” under the next government, which included lots of jobs building roads and in energy.
But he warned that there would be a need to reduce public spending and the deficit, particularly if markets changed borrowing rates.
He said that if Fianna Fáil and the Greens were not able to accept that when the economy returned to growth, and the need to reduce the debt, then maybe “it is better we don’t go into government now”.
He said this was “the economic honesty” of the situation.
He also shed light on the disagreement with the Greens over their demand for a 7% reduction in greenhouse gas emissions.
Fine Gael wants methane emitted from cows treated differently in calculations.
However, Mr Varadkar, sources confirmed, also spoke of a major spending package for farmers if they take environmental concerns on board.
Mr Coveney said he understood the “huge concerns” in the farming community.
There was also still a lot of heavy lifting to be done on policy talks with the Greens, admitted Mr Coveney who is leading the negotiations for Fine Gael at the talks.
It was a challenge managing the demand of trying to cut emissions, while also trying to put half a million people back to work after the pandemic, he added.