Irish centre-right parties close in on re-election but likely need a new partner

Dublin (Reuters): Ireland's two large centre-right parties looked on course to be returned to power after an election on Friday, but they will likely need at least one junior partner to reach a majority, raising questions about the stability of the next government.

The parties may face prolonged negotiations or an unstable coalition ahead of the inauguration of US President-elect Donald Trump, whose pledge to slash corporate tax and impose tariffs poses a major threat to the Irish economy.

With the two centre-right parties ruling out a deal with Sinn Fein, the main question was how close to the 88 seats needed for a majority the pair can secure - and whether they would need one or two more coalition parties to get over the line.

"If they are both at 20%, that'll get them close to 80 seats, I suspect, and then it's a matter of who will go in with them," said Dublin City University politics professor Gary Murphy.

To have a stable government, they will be hoping that small centre-left parties and potentially willing partners Labour or the Social Democrats get 11 or 12 seats, Murphy said. A coalition with four parties could be far more fragile.

The current junior coalition party, the Greens, secured the support of just 4%, down from 7% at the last election. That could see their seat numbers fall from 12 to three, said senior party member Ciaran Cuffe.

The formal counting of votes began at 0900 GMT and is expected to last until Sunday at the earliest in many constituencies under Ireland's proportional representation system known as the single transferable vote.

That system is likely to give the larger parties a higher proportion of seats than their percentage of votes, but an approximate tally of seats might not emerge until Sunday.

GIVEAWAY BUDGET

Prime minister Simon Harris called the election on the heels of a 10.5 billion euro ($11 billion) giveaway budget that began to put money into voters' pockets during the campaign, largesse made possible by billions of euros of foreign multinational corporate tax revenues.

However, a campaign full of missteps for his Fine Gael party, culminating last weekend in a viral clip of Harris walking away from an exasperated care worker, cost them their pre-election lead.

The government parties also faced widespread frustration during the campaign at their inability to turn the healthiest public finances in Europe into better public services.

Sinn Fein, the former political wing of the Irish Republican Army, appeared on course to lead the next government a year ago but suffered a slide in support from 30-35%, in part due to anger among its working-class base at relatively liberal immigration policies.

Fine Gael and Fianna Fail, former rivals that have led every government since the foundation of the state almost a century ago, agreed to share the role of the prime minister during the last government, switching roles halfway through the five-year term. A similar arrangement appears likely this time.