Minister for Finance Michael Noonan has held the door open to a Fine Gael-Labour Coalition backed by Independents if the result of the next election is close.

Speaking in London, Mr Noonan said he was confident the Coalition would win enough seats to govern for a second term even if the two parties suffered "devastating" losses, with Fine Gael losing 16 seats and Labour losing 18.

“Independents don’t want quick elections, Independents stay with governments.

“There are a number of left-wing Independents who are very high profile. But there are centre-right ones whose profile wouldn’t be that high who have the same voting strength,” said Mr Noonan. “I know that there are a number of centre-right Independents who will support the Government following the type of policies that we have been following,” he said.

Mr Noonan told a Bloomberg audience that 80 seats would constitute a majority in the next Dáil and he was confident Fine Gael and Labour would achieve that target.

Boundary changes

“A majority in the next Dáil will be won with 80 seats, following the 2012 boundary changes. In a devastating election we could lose 16 seats, we have 60; Labour could lose 18 and be down to 20, which would be an extraordinarily bad result.

“That’s 80 seats, that’s an overall majority. I am very aware of the polls and what is happening,” he said, adding, “it is very hard to see the Irish people electing Sinn Féin as an alternative and all of the risks that that would entail”.

Mr Noonan said “it is a rule of politics and government that if there is political instability in a country, economic instability follows. I don’t think Sinn Féin will be part of the next government.”

Defending the European Union, Mr Noonan urged his audience "to look back, rather than forward" to judge the progress that has been made over the last years, including the single banking union that will force bondholders to pay a share of future banking collapses.

Questioned about his Greek counterpart, Yanis Varoufakis, Mr Noonan provoked laughter by saying that he "has more rock-star qualities than I have. He is a modern man; he is obviously very clever, very able."

However, Mr Noonan withheld judgment on Syriza. “They have moved a long way already, so we’ll see how far they will move. But I have no doubt about their ability, or their academic competence.”

He added: “My position is to be helpful in every way. I have two red lines: No country is to exit the euro zone and I don’t want debt write-offs. I don’t believe that sovereign debt is written off anyway – it’s rolled, the terms are changed, the maturities are extended, the interest rate is reduced, but sovereign debt is not written off. So I don’t want that.

“Our economy is growing; our public finances are under control. Jobs are being created.”