International media says FG/Labour pose 'little danger' to austerity plan

BOTH the Financial Times today and Reuters over the weekend have been predicting a Fine Gael/Labour Coalition with Labour "posing little danger to Dublin's commitment to fiscal austerity".

Today’s FT editorial predicts:

Fianna Fáil will almost certainly be replaced by a coalition of the centre-right Fine Gael and centre-left Labour parties.

The FT also believes that Fianna Fáil faces a “rout” and “annihilation” with “populists, including the republicans of Sinn Féin, now poised for a breakthrough in the South”.

A Reuters analysis published last Friday, January 20^th, by Padraic Halpin suggests:

Ireland's next ruling coalition will include a strong centre-left member in the Labour Party but it will be leftist with a small ‘l’, posing little danger to Dublin's commitment to fiscal austerity and debt repayment.

Labour has its roots as the political wing of the trade union movement and its leader is a former trade union official who organised marches for tax reform in the late 1970s.

But unlike the smaller and more radical Sinn Féin party, Labour rarely takes its members to the streets and has played an important role in the traditional consensual politics in Ireland which have never been run along ideological lines.

It has also signed up to the EU/IMF goals and believes Ireland's austerity drive must continue until its budget deficit drops below 3% of GDP by the EU-set target of 2015.

Labour favours taxing the rich but it was a Labour Finance Minister who first introduced Ireland's ultra-low Corporation Tax, now a key plank of the country's recovery plan and a bone of contention with some of Ireland's new European creditors.