The Taoiseach last night ruled out going into government with Sinn Fein unless the party "resolved its relationship with the IRA". ail did in the past at the time of its formation.
In his clearest signal yet of a preference for coalition with Labour after the next election, Mr Ahern accused Fine Gael of failing to understand the culture of coalition and said the last Fianna Fail/Labour government was popular with the Irish people.
In his first address to the Fianna Fail parliamentary party since the four-month controversy over the O'Flaherty affair, Mr Ahern said Fianna Fail would be happy to renew a government partnership with the PDs.
He said if Fianna Fail had been for a long time a single-party government it was "paradoxically because we were, and are, the most successful party in coalition building across all sections of Irish society".
Mr Ahern accused Fine Gael of not understanding the culture of coalition as now practised in this and practically every other European country. "Only in Irish politics do some parties rule out categorically in advance, for no sound or objective reason, coalition options with other mainstream parties. Fianna Fail bridged that gap in 1989. We learned the lesson that still escapes Fine Gael, that the party that most consistently rules out coalition options is the party that most consistently stays in opposition," he said.
Mr Ahern said if Labour's only option was Fine Gael and Fine Gael's only option was Labour it created a frustrating and unhealthy mutual dependency between parties whose natural political instincts were not the same, and when they were in government together they had a marked tendency to neutralise each other. The Taoiseach told his TDs and senators at a two-day meeting of the parliamentary party in Kilkenny that successful completion of this term of government would "put to bed once and for all" the myths about Fianna Fail and coalition.
"If in the future we can achieve a majority on our own we will do so. But failing that, we would be quite happy in principle, on completion of our term and after the next election fought on our own platform, to renew a government partnership with the PDs which has served this country well."
However, in a veiled reference to the O'Flaherty affair, he said: "Solutions can neither be dictated from the streets nor the cabinet table. There must be a continuous dialogue between government and the public. We have to listen and consult even if in the end we have the responsibility to take decisions in the interests of the country as a whole."
Mr Ahern said he was delighted that Mr Albert Reynolds had achieved a satisfactory settlement of his libel case with the Sunday Times. "That paper, which had relied on partisan sources, was forced to acknowledge that neither lies to the Dail nor corruption were involved in the events that led to the fall of the 1994 Fianna Fail-Labour government. Opinion polls at the time showed that a continuation of that government was by far the most popular option with the Irish people," he said.
"The Labour Party know as well as I do that the combination was much more popular with their trade union members than their traditional alliance with Fine Gael."
Mr Ahern said Fianna Fail's main difference with Labour economically was that Labour believed high or increased public spending was only possible by maintaining high taxes. "Fianna Fail have proved that lowering taxes can stimulate employment and growth and create the buoyant revenues that can better fund social programmes," the Taoiseach said.
In response to speculation that Sinn Fein would take part in a government with Fianna Fail, Mr Ahern said: "for that to be possible . . . Sinn Fein needs to resolve its relationship with the IRA, as Fianna Fail did in the past at the time of its formation."
He said any government formed here would have to be in conformity with Article 15.6 of the Constitution which requires that there be only one army raised by the Oireachtas.
On the economy, Mr Ahern said he would not renege on the commitments in the Programme for Prosperity and Fairness to cutting taxes, as some economists had advised. "Our objectives must be to take the low-paid and especially those on the minimum wage as soon as we can out of the tax net."
He said if the State was to protect its gains, it needed to overcome the sharp rise in inflation without building it into the system. "Once we really let it into the system the only cure for inflation ultimately is deflation. We do not want that," he said.