When in power Charles Haughey reversed his earlier populist appeal and introduced a severe austerity budget to counter inflation and public indebtedness. Alan Dukes, a TD for Kildare South, who had been selected as leader of Fine Gael to replace FitzGerald, followed a strategy of accepting the austerity budget since it was what Fine Gael would have wanted. In a referendum the same year, the public approved by a vote of 69.9 percent Irish acceptance of the Single European Act. The act aimed at establishing a common European external tariff, the free movement of goods, services, persons, and capital within Europe, competition rather than cooperation between companies, and approximation, rather than uniformity, of regulations within and among the member countries.
In an election held in June 1989, Fianna Fail failed in its ambition to gain an absolute majority and, for the first time in its history, agreed to join a coalition government. Their junior partners were the Progressive Democrats, a group largely composed of former Fianna Fail members and critics of Haughey, whose own numbers in the Dail fiireann had fallen from 14 seats to six after the election. Fianna Fail and Fine Gael both lost two seats in elections to the European Parliament, which places were gained by Labour, the Workers' Party, the Progressive Democrats, and an independent.
The next year Brian Lenihan, the Tanaiste, former minister for foreign affairs, and minister for Defense, was the Fianna Fail candidate for the presidency to succeed Patrick Hillery, whose second term was ending. Observers expected that the very popular Lenihan would win the election easily. He was not unopposed, however. Fine Gael nominated Austin Currie, a former founding member of the SDLP, who had moved to the republic and was elected as Fine Gael TD for Dublin West. Labour nominated Mary Robinson, the barrister and legal scholar. During the campaign Lenihan denied that he had sought to influence President Hillery in 1982 not to accept Garret FitzGerald's request for dissolution of the Dail following a vote of no confidence. However, a graduate student produced a taped interview of Lenihan in which he acknowledged to have done such. In the voting in November, Lenihan received 44 percent in the first count, but when the transfers from Currie's votes (which were 17%) were calculated, it gave a majority to Robinson (who had 39% on the first count).
Mary Robinson was the first woman to serve as president of Ireland. To the degree allowed by the office, she played a role that was much more than symbolic. She made many gestures and pronouncements of concern for excluded members of society and created an atmosphere very favorable to the advancement of a feminist agenda in Ireland. After the failure of the Currie candidacy, Dukes stepped down as Fine Gael leader and was replaced by John Bruton, a TD for Meath who had served in various cabinet positions, including as minister for finance and industry and trade, in the 1980s coalition governments. That same month, John Major replaced Margaret Thatcher as prime minister and leader of the Conservative Party in Britain.
In October 1991 an official inquiry began into alleged corruption in the awarding of state assistance to the beef export industry. The following month a group of TD's within Fianna Fail, including such early supporters as Padraig Flynn for Mayo West and Albert Reynolds for Longford-West Meath, failed in an effort to oust Haughey as leader. However, early in 1992 Haughey had to resign under threat of a PD withdrawal from the coalition following revelations that he knew of the taping of phone conversations of journalists when he was Taoiseach in 1982. Albert Reynolds replaced him. Within a few months, Desmond O'Malley, the leader of the PD's, increased his demands for public examination of corruption in state support of the beef industry. When Reynolds accused him of dishonesty in levelling his charges, O'Malley demanded that Reynolds withdraw the accusation. Reynolds refused and the PD's withdrew from the coalition, necessitating another general election in November 1992. Fianna Fail strength in the Dail fell to 68, its lowest number of seats since 1954 when the Dail had only 144 members, not 166, and Fine Gael lost 10 seats. Labour, however, more than doubled its membership, winning 33 seats. The PD's made a gain of four seats and a new party, the Democratic Left, which was formed by most of the members of the Workers' Party, who had become disillusioned on discovering that the party had been receiving funds from the Soviet Union, got four seats. In the negotiations following the election, Fianna Fail and Labour formed a coalition with Reynolds as Taoiseach and Dick Spring, the Labour leader, as Tanaiste and minister for foreign affairs.
On the same day as the general election, the public voted on three referenda, all related to the abortion issue. The stimulus to the introduction of the amendments was a legal case early in the year involving a 14-year-old girl who succeeded in securing the Supreme Court's overturn of an injunction taken by the attorney general to prevent her from going to England to have an abortion. The Court accepted the argument that she would commit suicide unless she had the abortion. The decision allowing her to travel was based on the guarantee in the 1983 antiabortion amendment of the equal right to life of the mother and the child.
One of the amendments allowed for the provision of information about abortion and the other allowed travel abroad to secure an abortion. Both passed with about 60 percent of the vote. The third amendment, which sought to overcome the wording problems in the 1983 amendment by specifically excluding suicide as a health justification for abortion, failed by almost a two-thirds vote. The substantial gains by the Labour Party and the vote on the referenda were seen as indications of the decline in political influence of the Catholic Church. Criticism of the church mounted open following the scandal earlier in the year when Eamon Casey, the bishop of Galway, was forced to resign his position after it was revealed he had fathered a child as bishop of Kerry several years earlier and had been using church funds to support the child. Not unexpected was the passage the next year, 1993, of liberalizing legislation allowing the sale of condoms in Ireland and the legalization of homosexual activity by those over 17 years of age, the later a measure in conformity with a European Court of Human Rights ruling against existing antisodomy legislation in Ireland.