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Irish parties agree to form coalition government

By Peter Taggart, For CNN
STORY HIGHLIGHTS
  • Prime Minister-designate Enda Kenny says they're finalizing details
  • Last week's election marked a major defeat for ruling Fianna Fail
  • Fine Gael and Labour are the two largest parties after the election

(CNN) -- The two largest parties after last week's election in Ireland agreed early Sunday to form a coalition government.

The center-right Fine Gael and center-left Labour parties made the deal after lengthy talks, meeting a weekend deadline, Fine Gael leader and Prime Minister-designate Enda Kenny said.

"I am happy to tell you that we have concluded an agreement, the finer details of which are being worked out," Kenny told reporters.

Both parties were expected to ratify the deal Sunday, with Labour holding a special conference to vote on the agreement reached by senior party officials.

The coalition negotiations followed the record election defeat of the former governing party, Fianna Fail, over its handling of Ireland's economic collapse.

Fine Gael emerged as the biggest party at the election but didn't gain an overall majority, prompting Kenny's talks with Labour.

Kenny said during the election campaign one of his top priorities was to renegotiate the country's multibillion-dollar bailout package.

The Dublin government negotiated the 85 billion-euro ($118 billion) loan package from the European Union, International Monetary Fund and individual European nations late last year. It was prompted by the crippling cost of the government's bailout of Irish banks during the financial crisis, but it was extremely unpopular with voters, as was the accompanying government austerity budget.

Many voters blamed Fianna Fail for the country's monetary woes, and Prime Minister Brian Cowen was so unpopular he had to step down as party leader before the election.

Fine Gael leader Kenny has already raised the issue of the financial bailout with European leaders who called to congratulate him on his imminent appointment as prime minister, or taoiseach.

He has also spoken by telephone to European Commission President Jose Manuel Barroso.

Kenny was in Helsinki, Finland, Friday for a meeting of the European People's Party, with which Fine Gael is affiliated. He is due to follow that up with a meeting at the European Council in Brussels, Belgium, next week.

The contacts are intended to garner support for renegotiating the loan package.

Kenny described the Irish election as "a democratic revolution at the ballot box."

Fine Gael, Labour and Sinn Fein all won record numbers of seats, but Fianna Fail suffered a crushing defeat, losing three-quarters of its lawmakers.

The Green Party, which had been in coalition with Fianna Fail, lost all six of its members of parliament.

 
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