Irish voters look sure to punish their political masters in this week’s election. Polls suggest that the ruling Fianna Fáil government, widely blamed for the economic trauma of the past three years, will gain barely 15 percent of the vote, down more than 20 points from the last election in 2007.
Far less certain is any radical change of direction. The election’s probable outcome is a coalition between Fine Gael, ancient rivals of Fianna Fáil, and the smaller Labour Party. But Ireland’s dire financial plight leaves the incoming government tethered to an austerity strategy—and to $115 billion in loans from the IMF and the European Union—that will weigh heavily on the country for the foreseeable future.
Of course, the likely coalition partners are flagging bold plans. Both want to break the political culture of cronyism that is held responsible for the crash, and to seek the renegotiation of the deals with the EU and IMF.
Still, the hard financial facts remain. There may be some scope for adjusting the loans’ terms, but for now Dublin faces clear targets. To access the funds, Ireland must restructure its sick banking sector and take steps to reduce its budget deficit, which hit 32 percent of GDP last year, to just 3 percent by 2015.
What’s more, the bailout won’t spare the Irish the attention of the bond markets and the ratings agencies. The bailout cash isn’t necessarily enough to cover Ireland’s needs up to 2015, and the government may want to return to the markets as early as next year. Like it or not, the moneymen still rule.