Reuters International

Ireland's Prime Minister Enda Kenny looks on during the commemoration of the 100 year anniversary of the Irish Easter Rising in Dublin, Ireland, March 27, 2016. REUTERS/Clodagh Kilcoyne

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By Padraic Halpin and Conor Humphries

DUBLIN (Reuters) - Acting Irish Prime Minister Enda Kenny failed for the third time to be re-elected in a parliamentary vote on Thursday but made some progress towards breaking the political deadlock created by an inconclusive Feb. 26 election.

Ireland joined a growing group of euro zone countries with deeply fractured parliaments when voters angry at not feeling the effects of a much vaunted economic recovery ousted Kenny's coalition but failed to provide a clear alternative.

Ineffective attempts to break the impasse have left a weak minority government as the only realistic option to avoid a fresh election.

But Kenny has failed to secure the two things he needs to form one: the support of at least 58 deputies and the consent of the second-largest party, its historic rival Fianna Fail, to abstain in key votes.

Fianna Fail, which is open to facilitating a minority administration if Kenny can attract enough additional support, removed one hurdle when it abandoned hopes of forming a minority government of its own.

The two main parties still have to decide how a minority government would work after the 14 independent lawmakers undecided over whether to support Kenny said they would not take sides until the two main parties agree a detailed plan.

Kenny urged the parties to resume talks after the vote.

"We're now nearly seven weeks on from the election," Kenny told parliament. "It's time really to focus with a sense of urgency and I sincerely hope that in the short time ahead that this matter can be progressed to conclusion."

Kenny was backed by 52 members of parliament in the 157-seat lower house, one more than a similar vote last week. That meant he won the support of just two outside his own party and one of the 15 independents he wants to return to power alongside.

The independents on Thursday laid down a new demand, saying any deal would have to last long enough to implement at least three annual budgets.

The deadlock has so far had little effect on the fastest- growing economy in Europe. Ireland sold 750 million euros of 10-year bonds at a record-low yield of 0.817 percent at an auction earlier on Thursday.

However, the country's central bank has warned that more protracted uncertainty could have adverse consequences for economic growth, particularly with Britain, a key trading partner, voting in June on whether to leave the European Union.

(Editing by Larry King)

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