After the first week of the new government starting to run the country, most people here are wondering exactly who is in charge.

We knew that the make-up of the minority Fine Gael led government meant that it needs the support of independents and Fianna Fail (either by voting with them or abstaining) to get anything through the Dail. But no one expected this to be quite as chaotic as it is turning out to be.

After last week some of the Fine Gael people are only now waking up to the new reality, and they seem shell-shocked as a result. Their presumption that things would quickly settle down and Fine Gael would be able to carry on governing much as before has been cruelly exposed by a gleeful Fianna Fail.

This became obvious last week when the most important piece of new legislation to be proposed in the Dail came not from Fine Gael on the government side, but from Fianna Fail on the opposition side. The new law will give the Central Bank power to cap the interest rates Irish banks charge on mortgages. These are almost double what they are in other European countries and are seen as adding to the difficulty in the housing market here as home buyers struggle.

It's a complicated area and we will be looking at it in detail here next week when we examine the factors underlying the housing crisis in Ireland and what the new government can do about it. It's by no means certain that forcing cuts in mortgage rates will be an easy fix for our present problem, and in fact may create a lot of unintended consequences in the banks which are still in a fragile state.

But it's a great populist move and Fianna Fail are exploiting it as much as they can, just as they did by opposing water charges which will also have serious negative consequences down the line.

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The last government resisted demands to cap mortgage rates on the basis that it would do nothing to increase housing supply, which is the root of the problem, and was also an undesirable interference in the working of the financial market. The Minister for Finance Michael Noonan said the solution was to increase competition between the banks and attract new banks to come in here, not impose a cap on what mortgage rates the banks can charge. It might even be unconstitutional for the state to interfere in this way, he suggested.

Now Noonan, who is still minister for finance, has reversed his position and waved the proposed legislation from Fianna Fail on to a Dail committee. Why? Because Fianna Fail, with the support of Sinn Fein and some of the small left wing groups, had the numbers to win a vote last week in the Dail to force it through.

So Fine Gael's position on a major policy matter has been turned upside down. The new minority government has been forced to accept what the rest of the Dail wants.

It was the same last week on another issue, the last government's proposal to put a small charge on green bin collections (paper and plastic waste for recycling). This has now been dropped because the new minister for housing realized the Dail, with Fianna Fail backing, would vote it down. It's less important than the mortgage change, but still significant.

It underlined again that this minority government is at the mercy of Fianna Fail and the rest of the opposition who are reveling in their new power to block anything they don't like and impose what they do like.

Last week was only the first week of the new administration, but already the signs are worrying. What happened last week indicates that populist politics will now rule in the Dail and that tough decisions that voters might not like but which are necessary for the economy and the country may not be taken.

With some difficult issues coming down the tracks, like the demands for huge hikes in state workers' pay that the country simply cannot afford, this puts the new government in a very weak position. Fianna Fail claimed they were going to be responsible in this new Dail, but whether they can resist the temptation to go the populist route, build up their support among voters and then pull the plug for an early election is looking doubtful.

Fine Gael is going to have to seek consensus on everything they put forward, and the more they do so the weaker they will look. We said in this column two weeks ago that this ramshackle government will have great difficulty providing the strong leadership the country needs, and that is certainly turning out to be the case.

This situation also means that even the independents who are part of the new government are going to feel emboldened to speak out and demand movement on specific issues that are important to them whether they are in the national interest or not.

One example of this emerged last week when the independent who is the new junior minister in health, Finian McGrath, said he thought there should be a change in state policy to be more sympathetic to smokers. This was a further embarrassment from the man who the week before had been forced to admit that he had not paid his water charges (which meant that we had a new minister who was breaking the law!) although he has since paid up.

Read more: Shock as Junior Irish Health Minister calls for smoking in pubs and restaurants

It seemed even more bizarre that as junior minister for health he was now proposing a softening in Ireland's anti-smoking regime. It was a clear indication of the way the new set up in the Dail appears to give carte blanche to everyone to ride their own hobby horse, whether they are at the Cabinet table or not.

It caused predictable outrage from all the nanny state types here who insist on telling everyone what they can or cannot do. The new senior Minister for Health Simon Harris, Fine Gael's Boy Wonder, immediately slapped McGrath down, saying there would be no change in the anti-smoking regulations.

McGrath was forced to support that position in public, while also saying that it was very hard on smokers like himself (he admits to consuming 15 to 20 cigarettes a day). He said he had tried to give up several times and supported anything that stops people getting addicted but added that smokers were fed up with being treated so harshly.

All this flip flopping may have made McGrath look slightly idiotic, but in fact there is method in his madness. Given the uncertainty about how long this minority government will last, he is cleverly keeping his profile high in case there's a snap election in the next year or two. He has given the impression that he only paid his water charges very reluctantly and that he has great sympathy for smokers, both of which will go down well in his electoral area in Dublin.

Before he was told to shut up, McGrath pointed out that in some other countries in Europe (Germany, Portugal, Austria, etc.) some bars and restaurants are allowed to have separated smoking rooms. This protects both non-smokers and staff and still allows smokers the freedom to do what they want.

This is in marked contrast to Ireland, the first country in the world to introduce a national ban on smoking in all public places, where the anti-smoking regulations are extreme and relentless. (They were brought in by the present leader of Fianna Fail Michael Martin who was then minister for health and whose nickname was the Altar Boy because he was always holier than thou.) Wherever you stand on the smoking ban, it is possible to argue like McGrath, that we may have gone too far.

On a recent stay in hospital, for example, I witnessed patients who are smokers being forced to trek more than half a mile to the gates out on to the public road before they could light up. There they stood in their dressing gowns, shivering in the wind, puffing away on their after lunch cigarettes.

There used to be a smokers' shelter just outside the main hospital doors but this has now been removed and all of the very large hospital grounds are non-smoking. Hence the pathetic morning and afternoon half mile treks to the public road for a fag.

Clearly there is a more humane way of dealing with smokers, and the same applies to the shivering groups you see standing outside pubs here. There is also the question of freedom and individual rights.

This was dodged in the debate here when the ban was introduced in 2004 by insisting that staff who work in bars had to be protected from passive smoke. Separated smoking rooms with ventilation systems and self-sealing doors in bars in other countries deal with this by making the customers carry their drink from the bar to the room themselves rather be served by staff.

In small owner-operated bars in some European countries, the owner has the right to allow smoking or not. He or she has the right to make a personal choice.

Instead of doing something like that here we introduced a total ban in all bars which has contributed greatly to half of the small pubs in rural Ireland closing down. We dismissed proposals for separate smoking rooms within bigger bars on the spurious grounds of protecting staff, even though there were proven ways both of allowing smoking and giving protection to staff at the same time. It's the new politically correct Irish way.

Officialdom here goes way over the top in their efforts to make us pure as the driven snow. And it's not just the health police and the health fascists in the media who continually push their propaganda and ride roughshod over the rights of smokers.

One sees this now in many areas of Irish life where the nanny state and its numerous tax-funded quangos are continually telling us what we can and cannot do in areas where freedom of choice used to be a right.

McGrath's little difficulties may seem like a minor storm in a tea cup. But his antics in the past week -- and more importantly the opportunistic behavior of Fianna Fail -- are clear indications that this minority government is not likely to last very long.

And in the meantime we will wonder if anyone is really in charge of the country.

Junior Health Minister Finian McGrath opens the newly refurbished National Kidney Transplant Unit at Beaumont Hospital last week.Rolling News