Ireland's Coalition Strategic Reshuffle Amidst Economic Challenges

Ireland's leading political parties, Fianna Fail and Fine Gael, have struck an agreement with independent lawmakers, forming a new coalition government with a majority. This coalition aims to counter economic challenges posed by global political developments and maintain the current pro-growth fiscal policies.

In a significant political development, Ireland's leading centre-right parties, Fianna Fail and Fine Gael, along with independent lawmakers, have reached a breakthrough agreement to form a new coalition government, securing a majority. This strategic alliance is set to continue the high-spending economic policies of their previous coalition.

The urgency in finalizing the deal is partly driven by the impending inauguration of U.S. President-elect Donald Trump, whose proposed economic policies pose potential risks to Ireland's multinational-dependent economy. Fianna Fail negotiator James Lawless announced that the coalition has achieved a comfortable majority with the support of nine independents.

Key initiatives in the forthcoming policy programme include a reduction of the VAT rate for food and catering firms from 13.5% to 9%, despite the finance ministry's concerns about the fiscal impact. As Ireland prepares for a shift in leadership, with Micheal Martin returning as prime minister, the coalition braces itself for looming international economic uncertainties.

(With inputs from agencies.)