DRAMATIC political change is on the way. It is just a matter of when. The Fianna Fáil-Green coalition is hugely unpopular. It successfully jumped the four major political hurdles before Christmas – the budget, implementing of Nama, a new programme for government and Lisbon.

But opinion polls and last June's local election drubbing point to a Fine Gael-Labour coalition after the next general election. In September 2004, Enda Kenny and Pat Rabbitte publicly committed themselves to an alternative government under the Mullingar Accord.

There will be no such agreement ahead of the next general election, whenever it may be. While the parties are united in their desire to banish Ireland of Fianna Fáil rule, there are many differences between the two.

Their differences on dealing with crucial national issues such as the banking crisis show how the parties are diametrically at odds.

As conventional wisdom suggests the pair will get into bed together after the next election, the Sunday Tribune has asked a number of figures within the parties if Fine Gael and Labour are compatible coalition
partners.

First-time TDs' view

Seán Sherlock, Labour TD for Cork East, and Michael D'Arcy, Fine Gael TD for Wexford, were both elected for the first time at the 2007 general election.

Sherlock is adamant that Labour should fight the next election on its own agenda.

"I honestly believe Fianna Fáil need to spend some time out in the wilderness. You need a government in which Labour is the defining partner. If you look historically at Labour's involvement in government, it has always been with a view to the common good and we have never sought to serve certain interests.

"I am glad that Fine Gael and Labour have their own beliefs and policy provisions. If there were no differences you would have an homogenous political culture and that is not good."

Sherlock said: "Fine Gael has already stole one of Labour's policies with their universal health insurance plan which is fundamental to our core beliefs. Fine Gael wrapped that policy up and packaged it as their own even though Labour's Liz McManus did Trojan work to create the policy and it has been further advanced by Jan O'Sullivan."

He also claimed that Fine Gael is more right-wing and has "more in tune with larger business and chambers of commerce".

Sherlock also believes Labour take a more social democratic outlook of the country. "I don't believe instinctively that Fine Gael is that way inclined, but in any negotiations to form a government, you cannot say that never the twain shall meet."

He believes the success of the Labour party in government in the past has been through social policy provisions. "This is close to Labour and not necessarily close to Fine Gael who are institutionally tied in with business," he said.

"I am not a Blueshirt. I am pro-business, but I am pro-social capital and pro-citizen. The next government will have to take the citizen into account. Government policy should be for the citizen and not for the vested interest and that distinguishes us from Fine Gael."

D'Arcy believes the parties are more diverse now than they have been for a long time.

"Labour certainly seems to be more aligned towards the unions and the public sector employees than they have been for many years. They are a party of centre-left and we are a party of centre-right.

"Going back to the Garret FitzGerald and Alan Dukes era, Fine Gael were perhaps confused in that many of their elected representatives had core beliefs different to the traditional FG voter, so we have moved in separate directions. But that doesn't mean we are not compatible to form the next government.

"The similarities are blindingly obvious. It is not all going to be plain sailing, but the reality is that it will come down to the decision of both parliamentary parties following an election."

D'Arcy opposes a pre-election pact and said that he would rather hold the "Fine Gael view rather than diluted FG-Labour views".

The seasoned pro's view

A senior member of the Labour parliamentary party said:?"I view the current differences as both parties playing to their strengths and their own electorate.

"When the pressure is there to hammer out a programme for government, the two parties have shown in the past that they can do it and I am confident they can do it in the future.

"There are differences, but you live in an era of coalition governments. Before the election I see both parties playing to optimise their own territory," he said.

"Eamon has made it plain that we will fight an independent campaign and if the numbers are there, we will sit down with Fine Gael.

"I would have thought any alternative to the present government based on disenchantment about collapse of economy is likely."

A Fine Gael stalwart TD also believes that Labour and Fine Gael can do business when the time comes.

"Both parties have serious concerns about Nama solving the banking problems and questions over our compatibility have come from this.

"Labour's view is that it should have been done through temporary nationalisation of the banks while Fine Gael favoured a good bank, bad bank policy which is necessary to get credit flowing to the small business sector," he said.

The behind-the-scenes view

The Mullingar Accord was agreed in a very different world. Fine Gael had 31 seats in the Dáil and it was running in the low 20s in opinion polls while Labour was not doing dramatically better. The economy was still booming and the electorate associated Fianna Fáil with the good times.

A Fine Gael strategist said: "In 2007 both Kenny and Rabbitte took the view that in order to represent a credible alternative they had to liaise together. It didn't make life easy for either party as they had to hammer out an alliance across party lines, but it was necessary as government popularity was at an all-time high."

Fast forward a few years. The government's popularity is incredibly low, the economy is a basket case and the political landscape has changed utterly.

The Fine Gael strategist added: "Fine Gael is now running 10 to 13 points ahead of Fianna Fáil and Labour is polling in the high teens. So both parties have high ambitions.

"Fine Gael's primary target is to win an overall majority. The latest poll had us on 36%, which is in touching distance of the 40% target needed for such a majority. Labour would think that they will have their best ever election, so both parties will independently go for the maximum amount of seats possible.

"Both parties will emphasise the differences rather than similarities and you will not have a joint approach as the election is an entirely different proposition this time.

"We are in touching distance of an overall majority. We have as good a chance now, as Bertie Ahern had in 2002."

While an overall majority is a target, the Fine Gael figure admitted that the more realistic outcome is a coalition with Labour.

"Neither party will want to wait two or three months haggling over a programme for government," he predicted.

"We want to start implementing fully prepared policies from day one. So the challenge to the two parties will be to have a sufficient level of agreement on core issues so that they can go straight into an effective action-orientated government from day one.

A Labour strategist said: "The reality is that there will be a common approach from the two parties in a general election as we will both be saying that FF is in power too long, they messed up the economy, their magic formula for economic growth was a myth and anybody would have done better in managing the public finances, jobs and the economy."

He pointed out that Labour and Fine Gael both have significant emphasis on job creation and retention while "Fianna Fáil is just concerned with the public finances".

"We agreed on the necessity to save €4bn in the budget and to deal with the crisis in the public finances in the short-term rather than long fingering it. I think that Fine Gael and Labour were surprised with each others' compatibility on that €4bn and the need for job creation and retention as well. So there were huge similarities in our pre-budget statements.

"In terms of differences, we have a different emphasis in terms of where our priorities lie. We differed on the bank guarantee from the very start," he said.

"At the same time, now that Nama and the bank guarantee are in place, any new government will have to implement them. As the state must honour them, these policy differences between FG and Labour are now in the past. There is no choice; Nama must work."

The strategist pointed out that Gilmore has already ruled out a pre-election pact with Fine Gael or a post-election pact with Fianna Fáil.

"There is potential for arguments and tension…We disagreed with social welfare cuts and the emphasis on public sector cuts without reform but there is a lot of compatibility on a lot of issues."

Where the parties differ

* Banking crisis

Labour favours temporary nationalisation of banks, while Fine Gael has a 'good-bank bad-bank' plan. Labour opposed the bank guarantee while Fine Gael supported it in the "national interest".

* Public sector pay cuts

While Labour favoured a "negotiated reduction" in the overall bill "knitted into an agenda of reform in the public service", Fine Gael supported €1.7bn in "payroll savings".

* Taxation

Labour supports taxation initiatives such as a new third rate of tax for higher earners while Fine Gael is adamant "we cannot tax our way to recovery".

* Social welfare cuts

Pre-budget 2010, Labour accepted the need for €4bn in savings to tackle the soaring budget deficit but ruled out cuts in social welfare rates, while Fine Gael supported €400m savings in this area.

* Privatisation

Fine Gael's progressive NewEra plan recommends the privatisation of bodies such as the ESB, a move that would rankle with Labour core beliefs.

* John O'Donoghue

There was tension between Enda Kenny and Eamon Gilmore when the Labour leader gazumped Kenny in calling for O'Donoghue's resignation as ceann comhairle and displayed a major difference in their two leadership styles.

The verdict

So are the two parties compatible? In a word, yes.

The parties do have their differences. They will each fight a rigorous election battle independently of each other. But if the predictions are correct and Fianna Fáil does get a hiding, the romance of the Mullingar Accord will quickly be rekindled by two parties who believe they have been out in the cold for too long.