The general election of 1989 was precipitated by the defeat of the minority Fianna Fáil government in a private members motion regarding the provision of funds for AIDS sufferers (haemophiliacs who had been infected with contaminated blood products by the health service).

While a general election was not necessary – the motion was not a vote of confidence, and therefore defeat was merely an embarrassment for the government – Charles Haughey, the Fianna Fáil leader, sought a dissolution of the Dáil.

Opinion polls had shown that the party's strong performance in government had increased their popularity and an overall majority for Fianna Fáil could be a possibility.

While these rumours were dismissed at the time, it was revealed more than ten years later that Ray Burke, Pádraig Flynn and Haughey himself had received substantial personal donations during the campaign.

However, twenty-seven days after the general election, Fianna Fáil entered into a coalition for the first time in its history – with the Progressive Democrats, forming the 21st Government of Ireland, led by Haughey as Taoiseach.

In February 1992, Haughey resigned and was succeeded as Taoiseach by Albert Reynolds, forming the 22nd Government of Ireland, continuing in coalition with the Progressive Democrats.