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Archive for Sunday, May 27, 2007

Ireland’s PM begins search to help safeguard economy

May 27, 2007

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— Prime Minister Bertie Ahern, the savvy survivor of Irish politics, looked ahead Saturday to another five years in charge of Europe's most dynamic economy, but also the challenge of forming a governing coalition likely to include longtime opponents.

Following Thursday's election triumph, the most likely coalition partners for Ahern's Fianna Fail party are either the Labour Party or the Greens. Both are strident left-wing critics of Ahern's pro-business government that, for 10 years, has promoted Ireland as a low-tax magnet for American investment and European immigration.

Now, Ireland faces two weeks of private negotiations to work out whether Ahern can combine policies and share power with politicians who just a few days ago were hoping to see him lose office.

At stake is whether Ireland continues on its current path toward a U.S.-style society of fierce competition and car dependency, or heads back toward the continental European norm of better social safeguards, strong public transport and higher taxes.

When the newly elected Dail Eireann parliament convenes June 14, Ahern will need support from at least 83 lawmakers for a majority government.

Fianna Fail won 78 seats - five short of governing securely on its own, according to final results.

Fianna Fail's center-ground rival, Fine Gael, won 51 seats, too few to forge a viable majority with other parties.

Ahern's decade-old coalition partners, the Progressive Democrats, were almost wiped out. Analysts said the anti-Progressive Democrat vote reflected frustration that Ireland's free-market boom since the mid-1990s has outpaced state-funded services, including the road network, schools and hospitals.

Ireland has been the unquestioned economic dynamo of Europe since the mid-1990s. A 12.5 percent rate of business tax - a third of the European norm - has wooed hundreds of multinational corporations, particularly in computer technology and pharmaceuticals.

Whereas the European Union's average unemployment rate has been above 7 percent, unemployment in Ireland has plummeted from 15 percent to 4.4 percent. Meanwhile, mass emigration has been transformed into hefty immigration, and both population and jobs growth are rising faster than anywhere on the continent.

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