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(Bloomberg) — Simon Harris’s Fine Gael party and coalition partner Fianna Fail look set to return to government after the Irish election, but the prime minister could face a battle to keep his post after his popular support appeared to drop.

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With counting still ongoing, early tallies and the official exit poll showed little to separate the two main incumbent parties and the opposition Sinn Fein. With no party having enough support to govern alone, the status quo will likely remain after both Fine Gael and Fianna Fail ruled out a deal with Sinn Fein. 

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Though the overall outcome looks increasingly clear, it’s far from certain Harris will emerge with the upper hand in what could be difficult negotiations with Fianna Fail. Micheal Martin’s party trailed in the official exit poll, but early results suggest it could emerge with the most first-preference votes — the simplest guage of popular support — putting him in a better position in talks.

“We do see a route to a very strong finish here in this election,” Martin told reporters, predicting that Fianna Fail would outperform the exit poll. He said there is a “very clear route” back into power, though he cautioned that electoral fragmentation meant forming a government would be “challenging.”

To be sure, the picture could change as counting takes in second-choice and subsequent preferences to determine final makeup of the Dail or parliament. 

A tight race is far from what Harris envisaged when he called the vote early — it wasn’t due to be held until March — to try to capitalize on Fine Gael’s surge in support since he became Taoiseach in April.

The media dubbed it the “Harris hop” and the 38-year-old made his campaign slogan “new energy” — despite being a former health minister and established government figure. A giveaway budget and what appeared to be a slump in support for Sinn Fein made it seem the optimal time to seek a new mandate.

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But Harris’s campaign was beset with slip-ups, starting with Ryanair Holdings Plc Chief Executive Officer Michael O’Leary using a Fine Gael event to make a jibe about teachers serving in government. The worst, though, was a video that went viral of Harris walking away from a disability care worker and dismissing her view that the government wasn’t doing enough. He later apologized.

“Fine Gael may be a little bit disappointed that they didn’t make more gains,” said Lisa Keenan, political science assistant professor at Trinity College Dublin, though she added that given the campaign gaffes, Harris is also likely to be somewhat relieved. “We’ve seen a stabilization there.”

From a commanding poll lead as late as September, Fine Gael appears to have slipped back into a three-party scramble to win the popular vote.

It’s a key moment. Whoever forms the next government will enjoy a budget surplus and soaring tax receipts from US firms including Apple Inc. operating there. What to do with Ireland’s billions has been a key focus of the election, with parties competing on spending ideas — even as the re-election of Donald Trump in the US and his threat of trade tariffs injected a sense of caution.

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Worryingly for Harris, the exit poll also showed the premier trailing his two main rivals on the question of who should be next Taoiseach. Only 27% said they want the Fine Gael leader leading the country, while 35% said they would like Fianna Fail’s Martin, and 34% preferred Sinn Fein leader Mary Lou McDonald.

McDonald’s strength comes from her support among young people, and that gels with the exit poll showing housing and homelessness were the biggest issues for voters, followed by the cost of living. Data published on election day showed homelessness in Ireland reached a record figure of almost 15,000.

Sinn Fein’s steady rise has shaken up Irish politics since McDonald took over from Gerry Adams as president in 2018, becoming its first leader unconnected to the sectarian violence in Northern Ireland known as the Troubles. 

Its left-leaning agenda appealed to voters struggling with a housing shortage and rising inflation. While its support is well below the start of the year, when Sinn Fein appeared on course to form a government, the exit poll and early counting shows McDonald has established Sinn Fein as an electoral force.

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That has major implications for Irish politics. Fianna Fail and Fine Gael led every government since the state was formed 100 years ago, and while that looks set to continue, Sinn Fein’s emergence changes the dynamic.

Still, without the option of a coalition with Fine Gael or Fianna Fail, Sinn Fein has no clear route to power. That means the focus in the coming days and likely weeks will be on Fine Gael and Fianna Fail and the arrangement they come to.

Early tallies suggest Fianna Fail will improve on its performance in 2020, when the party that was in power during the 2008 financial crash re-entered government for the first time in almost a decade.

It’s possible that it wins several more seats than Fine Gael, which would give it considerable bargaining power in coalition talks and potentially restoring Martin, who served as prime minister for almost two years as part of the job share agreement between Fianna Fail and Fine Gael last time, as Taoiseach.

Any deal between Fine Gael and Fianna Fail would not be the end of the story. Even combining their support, the two parties are likely to fall short of the 88 seats needed for a majority in the 174-seat parliament.

The third coalition partner last time, the Green Party, face losses — not unusual for minor parties and also reflecting trends for green parties across Europe. Tallies suggest it could lose the majority of its 12 seats. 

But other smaller parties are expected to make gains. The Social Democrats, whose leader Holly Cairns gave birth on election day, could pick up seats. Labour are also optimistic.

Though vote counting began at 9 a.m. on Saturday, a fuller picture is not expected until Sunday. Then the negotiations will begin.

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