Irish government concedes election defeat

Irish prime minister Enda Kenny conceded defeat on Saturday following elections that saw the governing coalition punished by voters weary of austerity, leaving the eurozone country in political limbo with no clear winner.

"Clearly the government of Fine Gael and Labour are not going to be returned to office," Kenny, the leader of the centre-right Fine Gael party, told RTE television.

Early indications suggest that Fine Gael and its centre-left junior partner have been hard hit by continued public anger over years of austerity, despite Ireland recording the fastest growth in the European Union.

Many voters turned to independents and anti-austerity parties, and the country now faces the prospect of protracted negotiations as political leaders try to build enough support to form a new governing coalition.

Kenny said the early signs were "a disappointment", as exit polls indicated the coalition would fall far short of the 80 seats needed to form a parliamentary majority.

"Obviously one has to wait now until all the counts are in right across the country to see what the options that must be considered are," he said.

Fine Gael health minister Leo Varadkar added: "I don't think that the obligation to form a government necessarily falls on us automatically."

The centre-right Fianna Fail appeared to have regained some ground lost when the party was routed five years ago in the wake of Ireland's housing crash and economic crisis.

But anti-austerity groups, independent politicians, small parties and left-wing party Sinn Fein are all on course to increase their seats in parliament, as commentators heralded a "seismic change" in politics.

'Anti-establishment parties'

Fine Gael and Fianna Fail, who have taken turns ruling Ireland since 1932, would likely have enough seats between them to form a coalition government.

But despite their political similarities, they are bitter rivals whose differences date back to a civil war almost a century ago.

"The option that screams out the most is a Fine Gael-Fianna Fail coalition," said University of Maynooth lecturer Adrian Kavanagh.

"If neither party can agree a common ground then we're into a period of uncertainty."

Mark Mortell, a senior Fine Gael strategist, said that an alliance could be considered but would be extremely difficult for either party to accept.

"I think the prospect of another election very soon is now very very high," Mortell said.

Initial results showed a turnout of 65 percent, down from the previous election, and the first 41 out of 158 seats to be filled indicated a fragmented political landscape.

"It's similar to what we've seen in Greece, Spain, in Italy, in Portugal where there's been a swing towards anti-establishment parties," said Kavanagh.

In any negotiations parties will be mindful of the date of March 10, when the newly-elected representatives are due to meet in the lower house of parliament Dail Eireann and, in theory, appoint a Taoiseach or prime minister.

Sinn Fein were set to increase their seats to become the third largest group in parliament, continuing an upward trend in support for the party led by Gerry Adams.

It was once seen as the political wing of the Irish Republican Army but has transformed itself into an anti-austerity force south of their power base in Northern Ireland.

- 'An unfair recovery' -

Ireland has become the fastest growing country in the eurozone in recent years, with predicted GDP growth of 4.5 percent in 2016.

Kenny had asked voters to return the coalition to "keep the recovery going", in the first election held since the country of 4.6 million people exited a bailout in 2013 imposed after the financial crisis.

But anger over a housing shortage, rising homelessness and poverty was clear on the streets of Dublin, where thousands marched against austerity on the weekend before the vote calling for an end to a controversial water tax.

"I think overall people felt that there was an unfair recovery in the last five years, that an awful lot of parts of the country didn't feel it," said John Sheridan, a 28-year-old operations manager and Fianna Fail activist.

The impact of the election may be felt far beyond Ireland's borders, according to the Economist magazine, which commented that a Fine Gael defeat with the economy doing well may ramp up pressure on Brussels to reconsider its policy on austerity.