Fine Gael leader Enda Kenny and Fianna Fáil's leader Micheál

With the predicted stalemate now a reality, it's going to take weeks to sort out the aftermath of the Irish election.

The outgoing Fine Gael-Labour coalition government has lost a bunch of seats and no longer has a majority. But the opposition is so fractured it cannot offer a coherent alternative administration.

As this column is being written, recounts are still underway in some constituencies to determine the last few seats, but it is clear that we have a hung Dáil.

Fine Gael is still the largest party, but not by much. Labour has been decimated. Fianna Fáil has performed the biggest comeback since Lazarus and is once again a main political player, receiving 24.3 percent of the national vote just behind Fine Gael on 25.5 percent. But unless Fianna Fáil can get the support of Sinn Fein, Labour and a dozen others, it can't form a government.

The outcome of the election is a disaster for Fine Gael and for Taoiseach Enda Kenny who has snatched defeat from the jaws of victory with an unconvincing campaign. Kenny is a dead man walking as the young guns in Fine Gael assess the damage he has done to the party.

But the election outcome actually poses the biggest conundrum for Fianna Fáil, as their leader Micheál Martin tries to figure out what to do next.

The obvious solution -- the one most people are demanding -- is that Fine Gael and Fianna Fáil finally bite the Civil War bullet and form a coalition together. Both are center right parties, and the policy differences between them are negligible and could easily be sorted out.

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But this would be a high risk move for Fianna Fáil, tempting though it would be to get close to half the seats in cabinet.

Their problem is that this would leave Sinn Fein as the main opposition party in the Dáil, perfectly positioned to snipe at the new government and steal Fianna Fáil's traditional support base along with its constitutional republican clothes. It also runs the risk of Fianna Fáil, as the smaller government party, being subsumed into Fine Gael over time. Would anyone be able to tell them apart after five years in government together?

There is also the difficulty that during the campaign Fianna Fáil repeatedly promised voters a change of government to achieve "fairness" in how the economy is being run. Going into a Fine Gael-led government as the junior coalition partner hardly constitutes such a change, although if Kenny is replaced as taoiseach by someone else in Fine Gael the optics might not be too bad.

But it's a difficult decision for Martin. A safer strategy from Fianna Fáil's point of view might be to stay in opposition but to support a minority Fine Gael led government "for the sake of the country."

This would allow Fianna Fáil to present themselves as a responsible party putting the national interest first. It would also allow them to bring the government down on an issue and at a time of Fianna Fáil's choosing, perhaps on a difficult measure in the budget later this year. In the election that would follow Fianna Fáil would appeal for a bigger vote to allow them to lead a new "fair" government.

That may sound cynical, but don't believe any of the high-minded stuff you are reading about politicians here putting the country first. They will put party first, as usual.

Sinn Fein could be a key player in what happens, although their share of the national vote at just under 14 percent is far lower than they were expecting and is only four percent up on their vote in the 2011 election. If they were to reverse their position and offer to support Fianna Fáil (they come from the same republican gene pool after all), then an alternative coalition including a lot of independents and smaller parties just might be possible. But that is highly unlikely, even though the prospect of being in government on both sides of the border in this centenary year must be tempting for them.

Sinn Fein candidates at the launch of the party's 2016 campaign.

Sinn Fein candidates at the launch of the party's 2016 campaign.

It is, as we said, going to take weeks to sort this out. For now, as the speculation continues, it is worth taking a moment to consider what went wrong for Kenny.

The first thing is that Kenny himself was part of the problem, a poor communicator with little leadership ability. The landslide Fine Gael got in 2011 had nothing to do with him, apart from the fact that he happened to be leader at the time. The country was so angry with Fianna Fáil after the crash and the humiliation of the bailout they would have voted for Fine Gael led by a turkey.

In government Fine Gael did little more than follow the four year plan to rebalance the budget laid down by the previous Minister for Finance Brian Lenihan and stick to the austerity limits set by the Troika. Just as they had punished Fianna Fáil for imposing cutbacks on them, the voters in turn have now punished Fine Gael for doing the same.

None of this should be a surprise. Voters in each of the other countries in Europe -- Greece, Spain and Portugal -- who have been bailed out and forced into an austerity program have also dumped their governments. The idea that Irish people would be more accepting of the spending cuts and tax hikes that had to be implemented was an illusion.

Despite the bailout being more successful here and the Irish economy now being back on track, voters here were just waiting to take their revenge on the administration that had inflicted more pain on them.

Added to that was the fact that most voters have yet to feel much uplift from the economic recovery. There were minor cuts in income taxes this year, but these have been cancelled out by new taxes and charges.

The feel-good factor has been missing, and there was also a widespread perception among voters that the necessary cutbacks have not been implemented fairly, with better off people escaping much of the pain. This became the centerpiece of the Fianna Fáil campaign and even though it has little validity, it resonated strongly with voters.

At the end of the day it comes back to the simple fact that many voters are not interested in macroeconomic statistics about unemployment coming down, the national debt being stabilized and the budget being rebalanced. If they as individuals don't feel better off they are going to react negatively.

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Even those who now have jobs -- unemployment is down from 15 percent after the crash to eight percent now -- are less than grateful because they are struggling to pay things like the new property tax and water charges.

Among the less well-off parts of Irish society, the sense of entitlement and the resentment at any failure to provide services is as strong as ever, stoked up by Sinn Fein and the left wing independents and groups.

This perceived lack of fairness and failure to provide services became a dominant theme during the election campaign, even though the very high welfare payments here were protected during the austerity cutbacks and our spending on health services, for example, is one of the highest in Europe.

Despite this the media commentary throughout the campaign -- and particularly on RTE -- was relentlessly negative, with government ministers excoriated every day over the homeless problem and overcrowding in hospital A&E departments.

Of course, no one should be homeless, but after the crash and the collapse of the construction industry catch-up problems in the housing market were inevitable. The fact that 800 families are in emergency accommodation in Dublin -- mostly in hotel rooms paid for by the state -- is not satisfactory, but the government has been trying to deal with the situation.

800 families are in emergency accommodation in Dublin.

800 families are in emergency accommodation in Dublin.

This narrative about homeless families living in hotel rooms and sick people left on trolleys in A&E for hours because hospitals are overcrowded was repeated endlessly on TV and radio during the campaign. In the context of a country emerging from a crash with a population of millions, the numbers involved were not that significant but this was ignored in the media. Any attempt by government ministers to place these issues in the context of the economic recovery was dismissed with barely concealed contempt by media interviewers and presenters.

At one point in the campaign Kenny became so frustrated with this that he made the widely reported remark about us being a nation of “whingers.” Of course to minimize the damage he had to apologize, but there is a good deal of truth in his observation.

The fact is that we are making progress and there was -- and is -- no painless way out of the economic mess Ireland got itself into. Dumping the government as the voters have just done will not change that.

And the next government, whoever it may be, will face the same challenge.