Portugal is paying a “horrendous” price for political instability according to the Prime Minister of Ireland, Enda Kenny.
The premier was quoted by Bloomberg having announced legislative elections for February 26th and seeing the current polls which indicate that the coalition he leads is unlikely to command a majority.
Kenny, on a similar election platform to former Portuguese Prime Minister, Pedro Passos Coelho, is pitching his coalition campaign as a battle between stability and chaos – his being 'stability,' and 'chaos' being any administration led by Fianna Fail and anti-austerity parties such as Sinn Fein.
Portugal’s 10-year bond yields surged after last October’s inconclusive election which led to weeks of wrangling before António Costa's Socialist Party was offered the job of running the country by a grudging President Cavaco Silva.
A similar situation is feared in Dublin as political instability is in danger of creating economic uncertainty as it has done in Portugal. But Ireland is in a far stronger position than Portugal whose debt is now seen as un-repayable by Brussels, but nobody will admit this in public for fear of political repercussions.
The Irish economy recovery “should not be taken for granted,” Kenny told reporters in Dublin, adding that Portugal is paying a "terrible" price for political instability.
Ireland left the European financial assistance programme in December 2013 and has successfully carried through tough austerity measures, unlike Portugal which has failed to impress its lenders and has been accused of paying lip-service to many of the actions agreed, particularly a reduction in spending on State employees.
In Ireland, as in Portugal, the austerity measures hit the population hard and in Portugal allowed the Socialist Party and its left-of-centre allies to occupy the top table by the end of 2015.
Kenny is pinning his hopes on a ‘stablility’ ticket to win the next election in Ireland but this it exactly the message failed to convince Portuguese voters.
Kenny sounds much like Passos Coelho; "This is no time to take risks with the economy of Ireland. ... the state of our recovery requires stability, security, a cool head, steady hands and a long-term plan focused on the construction of a strong economy."
Whether the Irish voters will reject further tough austerity measures, as the Portugese voters did, or toe the line, soon will be seen.