FINE GAEL and Labour last night said briefings they received on the economic and banking situation facing the incoming government painted a very serious picture, and included information which neither party was aware until now.
At the conclusion shortly before 9pm of the second day of negotiations between the parties on the possible formation of a coalition, Fine Gael’s finance spokesman Michael Noonan and Labour counterpart, Joan Burton, separately said the briefings had confirmed the depth of the crisis facing the country.
The negotiating teams have received briefings from the Department of Finance, Central Bank governor Patrick Honohan and the National Treasury Management Agency in recent days.
As he left Government Buildings Mr Noonan said: “We are getting an up-to-date brief. We had a pretty good idea before the election that there were certain matters we weren’t briefed about and they’re now informing our discussions.”
He added: “Neither the economy nor the finances of the country are in great shape at the departure of the Government but then I don’t think anybody thought they were.”
Ms Burton, Labour’s finance spokeswoman, said: “It’s certainly very sobering; the presentations that we’ve been listening to.
“We knew that the banking situation was very serious. I think the presentation by the officials just underlines it and emphasises it again,” she said. The coalition negotiations have been dominated by discussions on the economy, the reduction of the national deficit, job creation and the banking crisis.
Negotiating teams from the parties – who between them control 116 of the 166 seats in the Dáil – were involved in discussions over nine hours yesterday, following a similar engagement on Tuesday.
The National Treasury Management Agency gave a briefing to both parties yesterday afternoon. It followed briefings on Tuesday by the Central Bank governor and by senior officials from the Department of Finance. One of the biggest gaps between the parties is their stance on the scale and timing of adjustments to the public sector budget.
Fine Gael wants €9 billion in adjustments until 2014 and for the national deficit to be reduced to 3 per cent of national income by then.
Labour argued during the election for a more gradual path, asserting that the adjustment should be no more than €7 billion by 2014, with the target for reducing the deficit pushed back two years until 2016.
A Fine Gael spokesman confirmed negotiations had focused on economic matters but said both sides had agreed not to make any public statements on qualitative assessments or progress until the talks are concluded.
The Fine Gael team is led by Mr Noonan, with Alan Shatter and Phil Hogan.
The Labour team is led by Brendan Howlin with Ms Burton and Pat Rabbitte.
Former president of the European Parliament Pat Cox is also playing an advisory role to Fine Gael on the margins of the negotiations. He and Mr Hogan were seen in discussions in the Merrion Hotel yesterday during one of the breaks in the talks.
Both party leaders, Enda Kenny and Eamon Gilmore, have remained in the vicinity of Government Buildings for most of the negotiations.
The atmosphere was described by one source as “cordial but businesslike”. The source said the talks have not yet turned to finer detail on the big issues that divide the parties. Talks are being held in the Sycamore Rooms in Government Buildings with the full facilities of Government being made available to both sides.
The parties have set a provisional target of the weekend for completion of the draft programme for government. This would give time for it to be ratified by both parties before the first day of the new Dáil next Wednesday. Mr Kenny will put the proposals to his parliamentary party while Mr Gilmore must get approval for the programme from a full meeting of party delegates. A venue in Dublin has been booked for this on Sunday afternoon.
