The Fianna Fáil leader has rejected the Taoiseach's call for talks on an extension to the confidence and supply agreement.

In a letter to Leo Varadkar this afternoon, Micheál Martin insisted that Fianna Fáil will not discuss an extension until after the Budget is agreed and announced.

It comes after Mr Varadkar wrote to his Fianna Fáil counterpart last Friday - calling for the arrangement to be extended and for a 2020 date to be set for the next election.

In the letter, he said he believes the 2016 agreement has “served the country well” and has been honoured by both sides.

He also warned that a government “cannot function properly if it does not know if it will last from week to week” or if it “does not know what will happen the day after the Budget.”

Confidence and supply

Mr Varadkar used the letter to set out what he believes has been accomplished under the agreement.

Noting that “public finances are in order and the budget is broadly balanced” the Taoiseach lists 21 achievements that he believes show that the “arrangement has served out country well.”

He admits however, that “on the downside, despite record levels of spending, increased staff and resources, we are struggling to make sustainable improvement to public healthcare."

“And, while there is now some cause for optimism, the housing crisis persists with a shortage of new homes for first-time buyers and increased numbers of people living in emergency accommodation.”

“Without doubt, there is more to do.”

He also notes that in the time since the agreement was struck in April 2016, the UK voted to leave the EU, the Stormont executive was dissolved and the strength of the Irish economy sparked fears over the potential for overheating.

You can read the letter in full here:

I wrote to the leader of Fianna Fáil last week seeking to open negotiations on an extension to the Confidence and Supply Arrangement and an agreed election date in Summer 2020. In the letter I set out the ambitious programme of work we want to achieve over the next 2 years.... pic.twitter.com/DxZR6JQHD6

— Leo Varadkar (@campaignforleo) September 4, 2018

This afternoon, Deputy Martin responded with his own letter, noting that Fianna Fáil remains committed to the current arrangement – which provides for three negotiated budgets followed by a review of the arrangement.

He said his party will not enter talks on an extension until the Budget is announced.

He warned that he does not “see a reasonable basis” for the Taoiseach’s concerns over Government stability.

“This has no grounds in our constitutional system and was not raised as an issue when the arrangement was negotiated,” he said.

“Indeed, it would be extraordinary if we were to agree that ministers could not be expected to do their jobs with advance assurance of a compliant Dáil.”

The Fianna Fáil leader Micheál Martin

Deputy Martin said “it is plain for all to see that there are still serious deficiencies, particularly regarding the emergency in housing and the crisis in our health services.”

He said Fianna Fáil had “fully honoured its part in this unprecedented arrangement” and “has done so often in the face of significant provocation.”

He said his party had also “provided the Government with the space and ability to take forward Brexit negotiations and this should be acknowledged.”

Deputy Martin said he “will be happy” to discuss an extension after the budget is announced in October.

Brexit

The Varadkar letter also warns that government uncertainty "weakens our hand in Brexit talks."

“It is my strong view that a government cannot function if it is living on borrowed time,” he said.

“Such uncertaintly weakens our hand in Brexit talks, domestic negotiations and, of course, those opposed or resistant to reform are simply more likely to wait us out.

“Such a scenario would not be in the interests of citizens, taxpayers or users of our public services.”

"Distraction"

Earlier, Fianna Fáil communications spokesperson Timmy Dooley accused Mr Varadkar of "distracting from the real issues" ahead of Budget negotiations.

“We have signed up to negotiating and delivering three budgets,” he said.

“The sequence is then - when that has been completed; when a budget is in place; when there is financial security and fiscal confidence in place - then we will begin a discussion about a review of the confidence and supply and whether or not we can agree an extension or a renegotiation of that,” he said.

“That will begin in due course.”

Fianna Fáil has pledged to make the upcoming a budget a “housing budget” – and Deputy Dooley said Mr Varadkar should be focusing his efforts on the crises in health and housing.

The two parties will tomorrow begin negotiations on the budget – which will be announced on October 9th.