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Wednesday 22 May 2019

FG to get the prize of finance ministry

Labour takes charge of public sector in deal on new coalition

Fionnan Sheahan, Michael Brennan and Fiach Kelly

FINE Gael has won the prize of the finance minister's job in a coalition deal, while the Labour Party will be given a new high-powered ministry for public sector reform.

Party leaders Enda Kenny and Eamon Gilmore are expected to finalise talks for the new government today, before a draft Programme for Government is voted on by Labour grassroots members tomorrow.

Both parties are also believed to have struck a compromise on their differences in economic policies.

"Deal on. Both parties will be happy enough. The leaders are going to finalise that," a source said of the proposed ministerial share-out.

The identity of the ministers has yet to be decided, but Michael Noonan is the obvious favourite to become finance minister, with Pat Rabbitte and Joan Burton being mentioned for the public sector portfolio.

Although Ms Burton is regarded as having a better grasp of economic policy than Mr Rabbitte, the former party leader would be regarded as better suited to working with the public sector, given his trade union background.

Mr Kenny and Mr Gilmore will agree the 10-5 or 9-6 split of Cabinet positions, with a super junior ministerial post being the makeweight in this deal.

If the split is 9-6, Fine Gael will get the super junior, but if Labour get five senior posts instead of six, it will have the super junior.

The minister for public sector reform is a new role and will take in a large chunk of responsibilities currently enjoyed by the Department of Finance and other agencies.

The minister will have an overarching remit across all government departments and will be responsible for implementing the changes agreed in the Croke Park agreement.

The template for the new post was actually drawn up by Fine Gael's Richard Bruton, but he will not get to operate the new department.

Meanwhile, the new coalition faces an uphill battle to shift European Union policy on the terms of the EU/IMF bailout.

Attending a meeting of EU party leaders in Helsinki last night, where he met German Chancellor Angela Merkel, Mr Kenny admitted there was resistance to forcing losses on senior bondholders.

However, there might yet be some movement on the bailout interest rate, and the length of time allowed for repaying the loans. Asked if Ireland would be getting extra help, Ms Merkel replied: "If specific measures are possible, then further conditions, further duties will also be necessary."

That comment sparked speculation that Ireland's 12.5pc corporate tax rate might have to be put on the table.

Mr Kenny also hinted that Fine Gael might move on its demand on deficit reduction.

The party wants €9bn in tax hikes and spending cuts to be completed by 2014 in line with EU-IMF agreement, but Labour wants a date of 2016.

"I think it's very important that the credibility of the next government be set out clearly. I know this was an element of the discussions that both negotiating teams were dealing with. Obviously our position was very clear coming in the run-in to the elections, so I hope we can get that," Mr Kenny said.

Mr Kenny also indicated a deal with Labour was the only show in town for forming a government by next Wednesday -- rather than dealing with Independents. He also indicated he expected an agreement between his party and Labour to be in place when the Dail returns on Wednesday.

The talks on a coalition deal continued late last night, but party backroom staff were drafting the text of the final document in areas where agreement was reached.

Irish Independent

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