Northern Irish Parties to Start Talks Amid Sinn Fein Surge

(Bloomberg) -- Northern Ireland's biggest parties will open talks on reviving power sharing, after an election held in the shadow of Brexit and question marks over the province's ability to govern itself.

The Democratic Unionist Party won 28 seats in Thursday's election, just one more than the nationalist Sinn Fein party. Voters elected a new, smaller 90-seat assembly after the collapse of a power sharing agreement in January.

The U.K. may have to reimpose direct rule on the region, if the two biggest parties cannot agree to enter government together again. That would leave Northern Ireland without a voice while the U.K. starts negotiations to leave the European Union. The North voted to remain in the bloc and its agriculture-based economy makes it especially vulnerable to higher trade tariffs which may follow if Britain leaves the EU's Single Market.

The DUP and Sinn Fein, which wants a united Ireland, will have three weeks to agree a new power-sharing arrangement or direct rule from London will be imposed.

“It doesn't look promising” for a new government being created, Professor Jonathan Tonge of University of Liverpool, who has written extensively on Northern Irish politics. “Direct rule won't change a lot in terms of Brexit. It does mean though that nobody from Northern Ireland would attend the meetings of the Scottish, Welsh and U.K. governments. Given Northern Ireland is probably the most vulnerable of the regions to Brexit, that's very bad.”

The DUP supported leaving the EU, while Sinn Fein backed staying. In the referendum, about 56 percent of Northern Ireland voters backed "remain." Sinn Fein is leading calls for the region to be given a special status within the EU after Brexit, but there seems little real prospect of that at this point.

The Social Democratic and Labour Party took 12 seats, while the centrist Alliance Party won eight. The Ulster Unionist Party won 10. All three parties opposed Brexit.

For more on why Northern Ireland is holding new elections, click here

The previous Northern Irish government collapsed amid a row over the operation of a renewable energy initiative. That dispute has continued, with acrimony on both sides. Sinn Fein leader Michelle O'Neill has indicated she won't work with DUP leader Arlene Foster until an investigation into the renewable energy initiative is complete.

To contact the reporter on this story: Peter Flanagan in Dublin at pflanagan23@bloomberg.net.

To contact the editor responsible for this story: Dara Doyle at ddoyle1@bloomberg.net.