FG And Labour Form 'Gov for National Recovery'

Members of the Irish Labour Party have voted in favour of forming a coalition government for the Irish Republic with Fine Gael over the weekend.

The two ideologically opposed parties revealed on Monday they are to combine, creating the Government for National Recovery, and have agreed a Programme for Government which was accepted by Labour members on Sunday.

Both party leaders, Eamon Gilmore of Labour and Enda Kenny of Fine Gael, will hold their first official meeting later on Monday.

Labour's Finance Spokesperson, Joan Burton, has described the Programme for Government as "very ambitious". The document outlines the new coalition's plans for the next five years, which includes a target to reduce the deficit to 3% of GDP by 2015, the introduction of water charges and a review of the Universal Social Charge.

The document reads: "The people chose our two parties to begin mending the pieces of a fractured society, a broken economy and to provide a sense of collective hope in our shared future.

"Both our parties are committed to protecting the vulnerable and to burdensharing

on an equitable basis. Fianna Fáil presided over an unequal and increasingly divided Ireland. We are both committed to forging a new Ireland that is built on fairness and equal citizenship."

The document focuses on the renegotiation of the EU/IMF bailout arrangement. The programme says the Government's "blank cheques for banks" policy must now be ended and that the joint Government would try to "step back from the edge of national insolvency".

"The new Government supports the objectives of the EU/IMF Programme of Support i.e.

restructuring and recapitalising the banking system, achieving fiscal stability and returning the Irish economy to growth.

"However, it is observable to all that the Programme of Support has – to date – failed to restore confidence in the Irish economy. In the view of the new Government, this reflects uncertainty over the affordability of the rescue package, and in particular the unknown but potentially enormous cost to the Irish taxpayer from the continuation of existing policies aimed at resolving the banking crisis," the document said.

Although the formation of a coalition was widely expected, the decision by Labour to agree was resisted by Unions and even the party's youth membership who urged the party to refuse Fine Gael's offer.

On Friday, the leader of the second largest union affiliated to Labour echoed the voice of the party's youth movement by calling on the party to abandon the ongoing negotiations between the two parties.

Reaction to the decision is still emerging as the country examines the 64-page Programme for Government and what it will mean for Ireland.

(DW)