Tuesday, November 23, 2010

EU urges feuding Ireland not to delay budget


Reuters/Bdnews24.com . Strasbourg/Dublin

The European Union urged Ireland on Tuesday to adopt an austerity budget on time in order to receive an EU/IMF bailout despite calls for an immediate general election that could disrupt the rescue.
The Dublin government is on a knife-edge with damaged prime minister Brian Cowen challenging the opposition to let the 2011 budget pass on December 7 before he calls an early election.
Facing public fury over his handling of the rescue, Cowen is also under intense political pressure with opposition demands he step down. On Tuesday, one of the country’s smaller political parties tabled a motion of no confidence in him.
‘Stability is important,’ European monetary affairs commissioner Olli Rehn told reporters in Strasbourg after meeting Irish members of the European Parliament.
‘We don’t have a position on the domestic democratic politics of Ireland but it is essential that the budget will be adopted in time and we will be able to conclude the negotiations on the EU-IMF program in time.’
The prime minister has defied calls to quit, saying the national interest required that he press on to unveil a promised four-year austerity package on Wednesday.
A delay in adopting the budget would almost certainly prevent the release of the first bailout loans under IMF rules. A European Commission spokesman reminded Ireland that every day that passes was having an impact on its economy.
But anger at Cowen’s management of Ireland’s economic and banking crisis has ballooned since he announced the bailout, and his chances of passing the budget fell dramatically when two independent lawmakers said they were likely to withhold support.
One of the Irish lawmakers who met Rehn, independent Marian Harkin, told RTE radio: ‘He did not phrase it in the terms ‘No budget, no bailout’ but he said from the point of view of stability for Ireland and indeed for Europe (it is important) that there is some certainty.’
Leftist Sinn Fein activists scuffled with police outside parliament on Monday in a possible foretaste of social unrest over harsh wage and spending cuts to be announced this week. Sinn Fein said on Tuesday it had tabled a motion of no confidence in Cowen.
Greece, the first country to be bailed out by the euro zone and the International Monetary Fund earlier this year and which endured months of social unrest, earned a vote of confidence from EU and IMF watchdogs on Tuesday after promising extra measures to shore up its ailing finances.
‘The program is broadly on track and policies are being implemented as agreed,’ IMF mission chief Poul Thomsen told Reuters after talks with the Greek government.
The thumbs-up means Athens is likely to receive a third tranche of its 110-billion-euro aid package despite problems with tax collection and health spending.

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