Europe

Ireland bail-out: Calls for election intensify

  • 22 November 2010
  • From the section Europe

The Republic of Ireland's two main opposition parties have called for an immediate general election after an EU-led bail-out of the country's economy.

The Labour Party and Fine Gael spoke out after the Green Party, junior partners in the governing coalition, called for an election in January.

The government has accepted up to 90bn euros (£77bn; $124bn) in loans.

But PM Brian Cowen said he would not stand down, and his government would focus on preparing an austerity budget.

He said he would not dissolve parliament until after his emergency measures have been approved by parliament in the New Year.

The government is due to publish a four-year economic plan on Wednesday.

Earlier, Fine Gael leader Enda Kenny said in a statement: "What is needed now is an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan, complete negotiations with the EU and IMF, and frame a budget for 2011".

Labour leader Eamon Gilmore said it was "essential that we have a new government elected as soon as possible".

Mr Cowen was speaking after calling cabinet ministers to an emergency meeting late on Monday.

Meanwhile, police removed demonstrators from the grounds of Government Buildings in Dublin and there were clashes when some of those escorted out tried to hold a sit-down protest.

The austerity budget, to be unveiled on 7 December, will set out 4.5bn euros of spending cuts and new or increased taxes designed to raise 1.5bn euros.

A tough budget is the trade-off for the bail-out that Irish ministers agreed with the EU and the IMF on Sunday.

However, adding to the government's woes on Monday, two independent MPs helping to prop up the coalition said they could not give a commitment to support the budget unless the opposition had a hand in drafting it.

Narrow majority

Even with Green Party support, the crumbling government of Mr Cowen has just a three-seat majority in parliament and faces a by-election in one of those seats on Thursday.

In a statement, Green Party leader John Gormley did not say the party was pulling out of the coalition but he made a number of demands and said a general election date should be set for the second half of January.

Mr Gormley, the current environment minister, stressed the election should only be held after the 2011 budget had been passed.

"Leaving the country without a government while these matters are unresolved would be very damaging and would breach our duty of care," he said in a statement.

"The past week has been a traumatic one for the Irish electorate. People feel misled and betrayed. But we have now reached a point where the Irish people need political certainty to take them beyond the coming two months."

The BBC's Mark Simpson in Dublin says the most likely shape of the next government is a right-left coalition between Fine Gael and Labour.

European shares and the euro both fell following the election call from the Green Party.

They had risen in earlier trading after the announcement of the bail-out, final details of which are yet to be worked out.

The UK is expected to contribute about £7bn of the bail-out. Chancellor George Osborne said: "Ireland is a friend in need, and we are here to help."

The crisis in the Irish Republic has been brought on by the recession and the almost total collapse of the country's banks.

Once known as the Celtic Tiger for its strong economic growth - helped by low corporate tax rates - the country has experienced a property bubble burst, leaving its banks with huge liabilities and pushing up the cost of borrowing for them and the government.

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