The worst mistake Labour can make is tell themselves joining a coalition with Fine Gael would be good because they can moderate the worst excesses of the austerity policy. If you want to put checks on government policy, make FG form a minority government and control them from the parliament.

The Lib Dems tell themselves they're moderating the Tory disaster but they've destroyed themselves as a party in the process.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman