Irish PM offers more housing, infrastructure to woo independents

Reuters News
Posted: Apr 05, 2016 3:25 PM

By Padraic Halpin

DUBLIN (Reuters) - Irish Prime Minister Enda Kenny has offered to boost a state house construction program and build more infrastructure to coax independent parliamentarians to support a new government, a draft document seen by Reuters showed on Tuesday.

Kenny's governing coalition was ousted in an election on Feb. 26 and he has been negotiating with independent members of parliament to form a minority government.

The second largest party, Fianna Fail, has ruled out joining a formal coalition but if it agreed to abstain, the backing of a group of independents could give Kenny's Fine Gael a wobbly minority government with enough votes to pass legislation.

Shane Ross, the head of a group of five independent deputies, said the document indicated the government had "got the message from the electorate" but that the parties were nowhere near a final solution.

Several politicians involved in the talks in recent days have forecast that a deal remains weeks away.

The 123-page document said the government would ask the National Asset Management Agency, responsible for disposing of distressed property loans after the 2008 property crash, if it "can be more ambitious in housing delivery" before it is wound down in 2020. The agency has currently committed to build 20,000 housing units.

The collapse in house building since the crash has left the country with a massive shortage, pushing rents back up to their pre-crash peaks and sparking a homelessness crisis.

Kenny, who remains in power in an acting capacity until a new government is sworn in, said in the document that the government would work with the central bank as part of a review of its mortgage lending limits introduced early last year, which have curbed lending.

The government would develop what it described as a new "Help to Buy" scheme to ensure availability of "adequate, affordable mortgage finance or mortgage insurance for first-time buyers".

The document proposes an additional 4 billion euros in capital spending to 2021, an increase of around 10 percent the government says is possible due to a change in how the European Commission calculates the Irish deficit.

The document also reaffirmed the state's plan to dispose of its investments in the banking sector "when conditions are right".

It did not specify when the government plans to sell its stake in Allied Irish Banks. Before the election, Finance Minister Michael Noonan said he expected a sale of 25 percent in the autumn, subject to market conditions.

(Writing by Conor Humphries; Editing by Mark Heinrich)