Noel Whelan: Fine Gael and Fianna Fáil coalition only viable option

After 40 days and 40 nights of “government formation for slow learners” we have finally got to the intensive stage of real engagement between the two main parties.

The hours of meetings which each of the big parties have had with the Independents have not been entirely wasted. If anything these talks have underlined how weak a makeshift minority Fine Gael or makeshift minority Fianna Fáil government would be.

Any excitement which Independents might have had about a minority government faded when Fine Gael negotiators appraised them of some of the current public expenditure realities.

As Fintan O' Toole wrote in The Irish Times on Tuesday, recent governments have distorted the budgetary processes by systematically under-providing for the HSE each year at budget time and then topping it up with a supplementary estimate late in the year.

Indeed, in an interview on RTÉ with Seán O'Rourke later on Tuesday, Fine Gael deputy leader and former health minister James Reilly admitted that the 2014 health budget was predicated on medical card scheme savings which he and his department knew were never deliverable.

He suggested that he almost resigned as minister for health at the time when the budget was being finalised.

Last week during the "round-table" talks in Government Buildings current Minister for Health Leo Varadkar told Independents how his department was always the last one to have its spending agreed. He apparently used an expletive to stress how health was always done over in these last-minute budget talks.

Black hole

The Independents were also told the HSE was already running over-budget this year to the tune of more than €1 million a day, and that if unchecked there could be a €400 million black hole in health spending by year’s-end.

They were also reminded that EU rules for national budgets means that this year any shortfall in the health budget cannot be plugged by a supplementary estimate. Even if the exchequer receives another windfall in tax receipts this year it will not be able to divert extra funds to health.

All of which means that restraints on health spending are now necessary, and more will have to be implemented during the year.

There is little prospect of any Fine Gael minority government, reliant on Independents and enabled by Fianna Fáil in opposition, withstanding the pressures on expenditure in this most sensitive area.

As the hype about a minority government clears away, the focus switches to either a Fine Gael and Fianna Fáil government or a second general election. It is the stark prospect of the latter which makes the former likely. Nothing concentrates the minds of politicians more than fear of an election.

Politically difficult

Once

Enda Kenny

and Fine Gael got Micheál Martin into a room they were always going to make him an offer which it would be politically difficult for Fianna Fáil to refuse.

A month ago several senior Fine Gael figures were privately making it clear that Fine Gael was prepared to offer Fianna Fáil full equality in cabinet, that they would offer a rotating taoiseach, and that they were even open to discussions on whether Martin would rotate into Government Buildings as taoiseach first. Fianna Fáil was not, therefore, surprised by Kenny’s offer of a “partnership government” at Wednesday night’s meeting.

Presumably Martin and his team had a strategy to respond to this scenario. It is interesting to note that when Kenny formally put the offer, Martin did not discount the notion. On the contrary, he arranged to meet Kenny again the next day.

Fianna Fáil then issued a carefully worded statement after the talks which noted that Kenny had identified a minority government as unworkable, and saying that Fianna Fáil would discuss matters at yesterday’s parliamentary party meeting.

The suggestion that some of the Independents could be part of a Fine Gael-Fianna Fáil dominated government is creative. The focus appears to be confined to the five "rural alliance" TDs, of whom Denis Naughten is the most senior.

The Independents would be surplus to requirements in terms of the number needed for a majority. However, their inclusion would not only operate as useful political cover but would take the edge off Fine Gael’s slight numerical advantage.

The route to a Fine Gael- Fianna Fáil government was never going to be straight or smooth. We can expect rejections and later mature reflections. There will be talks and breakdowns in the talks. There may even be a carefully framed presidential intervention. We may get to the brink of an election. It is still unclear whether we can pull back from that.