The leading contenders, Fine Gael, would seek a mandate to renegotiate the terms of the European Union's financial assistance for Ireland.
Irish vent anti-bailout anger at first post-crisis poll
DUBLIN // Europe's debt crisis was set to claim its first political scalp on Friday as voting began in an Irish election dominated by the trauma of economic collapse and the harsh path back to financial stability.
Voters are in a vicious mood over the bursting of a property bubble that has left them steeped in debt and facing years of austerity to repay the European Union and the International Monetary Fund for an 85 billion euros bailout.
The ruling Fianna Fail party is braced for a record kicking with opinion polls suggesting it will only retain around 20 seats in the 166-seat parliament, ending the dominant position it has commanded in Irish politics since independence from Britain in the last century.
"There is a seething anger, and the election is acting as a pressure valve," said David Farrell, a politics professor at University College Dublin. "But the incoming government won't have much of a honeymoon either."
Buoyed by its arch-rival's woes, the centre-right Fine Gael party will almost certainly lead that government with recent surveys signalling it could win nearly 80 seats putting it within shot of forming a single-party administration for the first time in its near 80-year history.
But a minority Fine Gael government would need the support of a rag-bag of independents and for the sake of stability, most analysts expect it will form a coalition government with the centre-left Labour party to navigate the early years of the EU/IMF programme.
"I'm not marking any of the parties who have been culpable in the past," said Dympna, a 44-year-old media professional, who said she would vote for Labour to punish Fianna Fail and curb Fine Gael's appetite for public service cuts.
"I know Fine Gael are going to get in, but hopefully not on their own," she said.
Despite the pre-election invective being hurled between Fine Gael and Labour, the two parties have a history of working well in government and both have campaigned for a mandate to renegotiate the terms of the EU/IMF package, widely seen in Ireland as punitive.
Fine Gael's leader Enda Kenny has already paid pre-election visits to Brussels and Berlin but any loosening of the terms for Ireland's loans will be agreed as part of an overall European package to deal with the region's debt crisis in two summits next month. [ID:nLDE7101AC]
While there is hope that Ireland's borrowing costs may be reduced as part of a wider deal, Dublin is unlikely to be given a green light to impose losses on some senior bondholders in Irish banks in the face of ECB opposition.
"All the parties are coming up with policies that hopefully can make things as good as they can be made but really I don't think any of them have power because its the bondholders who call the shots," said Isabelle, a 71-year-old nun.
Even with more relaxed borrowing terms, Ireland will still have to get the worst budget deficit in Europe under control by 2015 and if growth falters additional cuts may be needed, ensuring a short honeymoon for the new government.
The biggest fault-line between Fine Gael and Labour is over the deadline to tackle the deficit with Labour wanting an extra year, 2016, to get it under 3 percent of GDP, the EU limit, from nearly 12 percent of GDP, on an underlying basis, last year.
Despite the return of mass emigration, one in 10 unemployed, widespread negative equity and a rising suicide rate, Ireland has not experienced the kind of mass public protests seen in fellow euro zone struggler Greece.
Hard-left parties, including the nationalist Sinn Fein, have seen a surge in support on promises to rip up the bailout deal, but are expected to remain a small minority in parliament given Irish voters' preference for low tax parties.
The expected humiliation of Fianna Fail, which has run the country for 61 of the past 79 years, would mark a watershed in Irish political history. If it does only secure around 20 seats down from 78 in an election four years ago, it will be the sharpest collapse of support for any Irish party.
Voting in Friday's elections will be from 0700-2200 GMT and the first exit polls with be released early on Saturday. Manual counting under Ireland's system of proportional representation is likely to continue into Sunday.