Fianna Fáil yesterday categorically ruled out going into government with Sinn Féin after a meeting of the parliamentary party. This followed a request from Sinn Féin earlier in the day to meet to discuss the issue. 

Meanwhile, Fine Gael continues to stand back, seemingly content to regroup on the opposition benches in this Dáil. While it is now a stand-off, all three parties know that at least two will have to move on their positions if a government is to be formed. The numbers dictate this. While Fianna Fáil ruled out coalition with Sinn Féin, they did not rule out talking to Fine Gael. This is now likely over the coming days.

Sinn Féin can rightly argue that they have a legitimate case to be part of the next government. The numbers dictate this too. However, while Sinn Féin enjoyed a surge in support in this election, 75% of the electorate did not vote for it.

Goodbody Stockbrokers say from a policy perspective, Fine Gael and Fianna Fáil are the most compatible of the three main parties. Fine Gael offered a coalition option in the aftermath of the 2016 general election and was open to the idea in this campaign. Fianna Fáil has baulked at the suggestion up to now, but circumstances have changed. 

Goodbody say the danger of this route is that the two parties can be framed as the “old guard” that have refused to listen to the electorate’s call for change. This will be the mantra that  Sinn Féin will consistently repeat if this was to be agreed. That mantra worked in this election and may work again, putting them in a much stronger position for the next election, whenever that may take place.

According to Goodbody Stockbrokers, "Fianna Fáil is between a rock and a hard place: form a coalition with its long-term adversaries in Fine Gael, risking a further shift in political alliances in the coming years, or refuse to do so, pushing the country into another election in the short-term."

Source: www.businessworld.ie