Irish parties strike coalition deal

Fine Gael and Labour negotiators have struck a draft deal for coalition government, which they will put to their rank and file in separate meetings today.

Party leaders Enda Kenny and Eamon Gilmore were handed a proposed blueprint for partnership last night.

The deal will be put before a 1,000-strong Labour Party special delegate conference today, while Fine Gael will seek the backing of its TDs and senators.

The negotiations at Government Buildings have been complex, with the parties at odds over the length of time it will take to turn around the budget deficit, tax, public sector cuts, water charges and how to tackle bondholder responsibility for banking debts.

While negotiators went head-to-head bargaining on policies, Taoiseach-designate Enda Kenny was in Helsinki earlier this week for a meeting of the European People's Party, to which Fine Gael is affiliated.

He rubbed shoulders with EU leaders including European Commission president Jose Manuel Barroso, European Council president Herman Van Rompuy and German chancellor Angela Merkel.

The contacts were intended to open the door for a charm offensive and garner support to renegotiate the 85 billion euro loans.

Labour leader Mr Gilmore travelled to Athens for a meeting of the Party of European Socialists.

The party negotiators have been taking briefings from economist Colm McCarthy, the Department of Finance, the National Treasury Management Agency and Central Bank governor Patrick Honohan.

Both sides claimed the information confirmed the depth of the crisis facing the country.

The negotiating teams have also gone head-to-head on their respective health and education policies.

Labour has been under pressure not to strike a deal from both its youth wing, grass roots and the Unite trade union, which has called on the party to back away from joining with Fine Gael and form a strong left-leaning opposition.

The Fine Gael team is led by highly-regarded finance spokesman Mr Noonan, Phil Hogan, who masterminded the historic election success, and combative front-bencher Alan Shatter.

Labour's negotiators include the party's former leader Mr Rabbitte, deputy leader and finance spokeswoman Joan Burton, constitutional expert Brendan Howlin and policy director Colm O'Reardon.

A quick deal was needed as Ireland faces a series of challenging hurdles linked to its multibillion-euro bail-out loans from the International Monetary Fund and Europe, and the banking crisis.