Irish Republic set for early election on 25 February
The Irish Republic is to hold an early general election on 25 February, its first national vote since the bail-out.
Prime Minister Brian Cowen announced that parliament was being dissolved, more than a year before his term in office was due to expire.
Mr Cowen, who is not standing for re-election, said the vote would define Ireland's future.
He was forced in November to accept an EU/IMF 85bn euro ($113bn; £72bn) bail-out, with an interest rate of 5.8%.
Once known as the Celtic Tiger for its strong economic growth, the Republic had ridden high on a property bubble.
But when property prices crashed, the economy slumped and several banks were left needing huge state hand-outs.
Analysts expect Mr Cowen's Fianna Fail party to suffer a crushing defeat at the election, as voters blame them for mismanaging the economy.
Nineteen Fianna Fail members of the Dail (TDs) and four ministers were standing down from national politics on Tuesday.
Addressing the Dail, Mr Cowen said his government had had to take unpopular decisions but he had always been loyal to his country.
His tenure had been "a time of great trial and test", he said.
"I believe we have worked hard to correct past failures and to secure the future recovery of our country.
"This election will define our economic future and it will decide whether Ireland moves forward from this recession or whether we prolong it or indeed succumb to it."
The centre-right Fine Gael party and centre-left Labour Party are favourites to take over with both determined to renegotiate elements of the bail-out.
Fine Gael leader Enda Kenny paid tribute to the outgoing prime minister, saying that while he had disagreed with many of his policies, he had had no doubts about his personal integrity.
The opposition leader told the Dail his party meant to "rebuild the country".
"We will make Ireland the best small country in the world in which to do business," he declared.
Mr Kenny, who had talks with European Commission President Jose Manuel Barroso in Brussels on Friday, has described the bail-out's 5.8% interest rate as "penal".
"I'm confident that this can and will be renegotiated," he said in an interview earlier on Tuesday.
John Gormley, leader of the Green Party which was until recently Fianna Fail's junior coalition partner, predicted that a Fine Gael-Labour coalition would fail.
It would be a case of "Tweedledum and Tweedle-dumber", he quipped.
There was surprise in Dublin when Mr Cowen, 51, announced he would not be fighting the election, the BBC's Mark Simpson reports.
It is the first time in Ireland's history that a serving prime minister has not contested a subsequent general election.
Mr Cowen has stepped down as Fianna Fail leader but says he will continue as taoiseach (prime minister) during the election campaign.
Former Foreign Minister Micheal Martin has been elected as the new leader of the party.
Mr Cowen said his party faced new challenges and would face them with "a new leader and a new team".