Irish coalition looks set for re-election despite strong Sinn Fein showing

By Graham Fahy, Padraic Halpin and Conor Humphries

DUBLIN (Reuters) -Ireland's main opposition Sinn Fein looked on course to win the most votes at a general election by the narrowest of margins on Friday, but its two main centre-right rivals will likely have enough seats to govern again without it, an exit poll showed.

The exit poll put the left wing Sinn Fein on 21.1%, the centre-right Fine Gael of Prime Minister Simon Harris on 21.0% and like-minded coalition partner Fianna Fail on 19.5%.

Fine Gael and Fianna Fail pledged ahead of the election to seek to form a coalition without Sinn Fein, just as they did after the 2020 general election when Sinn Fein also narrowly won the popular vote.

"There's a three-way race now to see who will become the biggest party," Finance Minister Jack Chambers from Fianna Fail told national broadcaster RTE, adding the party's position on Sinn Fein had not changed.

Fine Gael and Fianna Fail, former rivals that have, between them, led every government since the foundation of the state almost a century ago, may be able to reach a majority with one other smaller party, said Gail McElroy, Professor of Political Science at Trinity College Dublin.

The two parties currently govern with the Greens.

Opinion polls had suggested the three main parties were neck-and-neck ahead of the vote and that Ireland was headed for a broadly similar result to the last election in 2020.

Harris called the election on the heels of a 10.5 billion euro ($11 billion) giveaway budget that began to put money into voters' pockets during the campaign, largesse made possible by billions of euros of foreign multinational corporate tax revenues.

However a campaign full of missteps for his Fine Gael party, culminating last weekend in a viral clip of Harris walking away from an exasperated care worker, cost them their pre-election lead.

The government parties also faced widespread frustration during the campaign at their inability to turn the healthiest public finances in Europe into better public services.

All parties have laid out ambitious spending plans to try to fix the problems, but are banking on a continued surge in the corporate tax mainly paid by big U.S. firms. That could be threatened by U.S. President-elect Donald Trump's pledge to slash U.S. corporate tax rates and impose trade tariffs.

Sinn Fein, the former political wing of the Irish Republican Army, appeared on course to lead the next government a year ago but suffered a slide in support from 30-35%, in part due to anger among its working class base at relatively liberal immigration policies.

"When you consider where we would have been coming out of the local elections, it's a phenomenal result," Sinn Fein foreign affairs spokesperson Matt Carthy told RTE, referring to council elections in May where Sinn Fein sank to 12%.

"We went into this election saying we wanted to be part of the next government, we want that government to not include Fine Gael or Fianna Fail but that we will engage with every single party and that remains our position," he said.

($1 = 0.9465 euros)

(Reporting by Graham Fahy, Padraic Halpin and Conor Humphries. Editing by Jane Merriman, Daren Butler and Alistair Bell)