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According to the Irish Times, Fine Gael, Fianna Fáil and the Greens have lowered expectations for agreeing a programme for government due to serious “pinch points”. Negotiations over agricultural emissions were halted.
Premier Leo Varadkar’s Fine Gael finished in third place in the election behind Fianna Fail, which won the most seats in the Dail assembly earlier this year.
Irish nationalists Sinn Fein won the popular vote but have been shut out of negotiations to form a coalition government.
And now, Mr Varadkar and Micheál Martin, Fianna Fail’s leader, have been locked in talks with the Green Party but sources claim there was little progress during talks between the political parties.
It is reported there was no resolution of key areas including finance, social protection, distribution of carbon tax and the State pension age.
Negotiations are reportedly set to continue today with all three two-hour sessions focusing on agriculture.
The State is responsible for a third of all greenhouse gas emissions but there are differences in approach of the Green Party and Fine Gael and Fianna Fáil to reduce emissions.
Green Party TD Joe O’Brien told RTÉ’s The Week in Politics: “It’s important to say this is not a fait accompli.
“We’ve got a lot of sticky issues to deal with 0ver the next week or so.
“Having an agreement by the end of the week is a target; it’ probably an optimistic target from my point of view.”
The Greens manifesto argues for a substantial reduction with agriculture in order to meet its aim of reducing overall emissions by seven percent per annum.
But the two bigger parties favour higher emission reductions in other areas in order to allow less of a show to current agricultural practices.
A source said: “There are going to be a few big pinch points during the next few days and that is going to be one of them.
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“We are doing our best to meet the deadline but there are still many things that need to be resolved.”
Dara Calleary, deputy leader of Fianna Fáil, appeared hopeful that negotiations would come to an agreement by the end of the week.
He said: “Differences can be bridged.
“This is what negotiations are about.
“A stitch in time saves nine.
“We are putting the stitches in now to make sure we have a strong platform for a stronger world.”
Mr Calleary’s comments were echoed by Fine Gael’s Minister of State Patrick O’Donovan who said there was “no immediate panic”.
He did say though how the three parties must create a programme for government that would pass all hurdles including being approved by their respective parties.
This news comes after experts claim Ireland is on the brink of its worst-ever recession as the economic impact of coronavirus on the country is laid bare.
Experts forecasted a slump in Gross Domestic Product of between 12.4 percent and 17 percent as a fresh deficit and job losses crisis evolves out of the pandemic.
The crisis has sparked a totemic political debate over new austerity measures after Dublin battled hard to bring its mountain of debt from the 2008 financial control back under control.
Ireland was then handed an international bailout and told to implement a €29.8 billion austerity drive.
But the country managed to turnaround from the disaster to achieve full employment and a budget surplus before the coronavirus outbreak.
Researchers at the Economic and Social Research Institute think-tank believe the economic downturn will make efforts to form a coalition government even more difficult.
At the heart of the negotiations, a deficit-reduction plan that will kick in from 2022 or 2023 after an initial stimulus packages attempts to reboot Ireland’s recovery.
Economists have said Dublin will be forced to cut spending or raise taxes in order to once again tackle the national debt.
Sebastian Barnes, acting chairman of the Irish Fiscal Advisory Council, said: “The next government will need to make some important and difficult decisions about its competition spending and tax objectives.
Last week Mr Varadkar welcomed the “broad thrust” of European Commission President Ursula von der Leyen’s blueprint to borrow money in order to fund the bloc-wide rebuild.
Mr Varadkar has warned the next government’s first decision will be to cut coronavirus welfare payments that were introduced in March as almost 600,000 people lost work due the the lockdown.
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