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Ireland in the balance as it heads to the polls

Ireland: Then vs. now
Is Ireland's economic recovery at risk?

A general election is due to take place in Ireland on Friday with polls suggesting that no one party will gain enough of a majority to govern alone.

At present, Ireland is governed by a coalition made up of the largest political party, Fine Gael, which is led by Prime Minister Enda Kenny and the Irish Labour party.

Campaign posters for the parliamentary elections on lamposts in Dublin, Ireland, on February 21, 2016.
Caroline Quinn | AFP | Getty Images
Who are the main players?

A day ahead of the vote, polls continue to indicate that the smaller parties and independent candidates could play a crucial "kingmaker" role when it comes to forming a government.

Earlier this week, an in-depth voter poll carried out by The Irish Times and IPSOS MRBI showed that party support for Prime Minister Enda Kenny's center-right Fine Gael party stands at 28 percent, on a par with the level of support for independents and smaller fringe parties at the same level.

However, support for Fine Gael's coalition partner, Irish Labour, stands at only 6 percent, raising fears that the party might be close to collapse and the make-up of any future coalition would be very different.

The polls, conducted on a sample of 1,200 voters from across the country, showed that a possible contender for the election is Fianna Fáil, a populist, centrist party led by MicheálMartin. The party currently has a support level of 23 percent and Martin has proved popular in televised debates between party leaders.

Left-wing Republican party Sinn Féin is currently trailing with 15 percent of the vote, the lowest level recorded for the party in an Irish Times/IPSOS MORI polls in more than four years.

The popularity of the party's President Gerry Adams suffered following media interviews in which he seemed confused over the party's fiscal policies, according to various Irish news reports.

Asked which of the four main party leaders they would prefer to see as prime minister, or Taoiseach, 24 percent of voters polled preferred Enda Kenny with an equal amount preferring Fianna Fail's Micheál Martin. Only 12 percent preferred Gerry Adams and only 4 percent preferred Joan Burton, the leader of the beleaguered Labour.

What could swing the vote?

Ireland exited its 85 billion euro bailout program in December 2013, a program it needed following the collapse of its banking sector during the financial crisis.

It has since experienced robust growth and falling unemployment. In fact, Ireland is booming, with the country's central bank forecasting economic growth of 6.6 percent in 2015 although it forecast a lesser but still robust 4.8 percent expansion in 2016, making Ireland one of the best performing economies in the euro zone.

The success of the economy could be a key swing factor for voters and is expected to give incumbent Enda Kenny a potential boost. Economic growth has come at a cost, however, with austerity measures a key component of the country's return to growth. With the public weary of cuts this is something that Kenny's rivals, such as Martin, have used against him.

The likely outcome?

Economists believe that despite the strong economic recovery, public dissatisfaction with their politicians is high, meaning that the formation of a coalition government could be messy.

"Coalition government is the norm in Ireland, and even minority administrations have proved effective in the past, but as elsewhere, dissatisfaction with the political classes is high and the political landscape is fractured," RBC Capital Markets economists Sam Hill and Timo del Carpio said in a note this week.

"Polls show support for non-party aligned 'independent' candidates running at 25 percent, which will make the formation of a stable administration difficult and a second poll this year cannot be ruled out. Regardless of the result, however, a significant deviation from Ireland's current economic course is unlikely."

Business leaders appeared sanguine about the vote, however, with the head of one Ireland-based company brushing off the vote's potential consequences on consumer confidence.

"For any corporate really, certainty is ideal, ultimately the people will decide," Siobhan Talbot, the chief executive of Glanbia, an international dairy food company, told CNBC on Wednesday.

"Every corporate is concerned about these (political) aspects and ultimately, as a global organization, you have to handle whatever outcome comes and you work within whatever framework arises."

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