Debt-laden Ireland’s embattled government faced a major protest against its sharp cutbacks yesterday, a day after Irish Prime Minister Brian Cowen’s party took a battering at the polls.
Tens of thousands of protesters were expected to join a national demonstration called by the trade unions against a draconian austerity package designed to slash the one-time “Celtic Tiger” economy’s massive deficit.
The demonstration comes after voters inflicted a humiliating by-election defeat on Cowen’s Fianna Fail party, cutting the FF/Green coalition’s parliamentary majority to just two.
The austerity package, announced on Wednesday, will cut the minimum wage and slash 25,000 public sector jobs, as Ireland strives to bring its deficit back under 3 percent of GDP by 2014. It is currently running at 32 percent.
The by-election defeat, and Saturday’s protest, increased the pressure on Cowen to call an immediate general election even as the government battles to finalize an international bailout.
EU heavyweights Germany and France are urging a rapid conclusion to talks on assistance for Ireland worth 85 billion euros (US$113 billion), with a possible announcement today.
Irish Congress of Trade Unions president Jack O’Connor, the head of Ireland’s biggest union SIPTU, said the government had promised “the harshest budget since the foundation of the state.”
“This is the result of allowing speculators, bankers and developers to run riot, pillaging and ruining our economy,” he said.
The country’s national sovereignty was at stake as a result of the government’s policies, he added.
“We must not stand idly by while the final nail is driven into the coffin,” he said.
O’Connor dismissed suggestions that the rally could turn violent, as happened in recent protests against austerity cutbacks in neighboring Britain.
Police Chief Superintendent Michael O’Sullivan said a large turnout was expected, but warned there were “individuals and groups who seek to exploit such events for their own ends.”
Opposition parties wasted no time in ramping up the pressure on Cowen after the socialist Sinn Fein party won the northwestern Donegal constituency on Friday, previously a Fianna Fail stronghold.
They said the prime minister had no mandate to push through the cutbacks and should call a general election immediately.
Ireland’s austerity plan and a budget on Dec. 7 are crucial steps to show fellow members of the 16-nation euro area that it is putting its finances in order.
However, Cowen has refused to go to the polls until lawmakers have passed the budget, which is unlikely to happen until January.
Labour Party leader Eamon Gilmore said Fianna Fail “has neither the political mandate nor the moral authority to make the crucial decisions the country now faces.”
The Irish Times in an editorial in its Saturday edition, said the budget would probably go through, given the pressure from the EU and the IMF.
“There is a general consensus that Mr Cowen’s days are numbered ...” it added. “Powerful forces within Fianna Fail are pushing for a leadership change in early January to present the electorate with a different image.”
Sources in Brussels said that the bailout talks with Ireland would wrap up today, probably in order to make an announcement before markets open tomorrow.
Meanwhile, Michael Noonan, finance spokesman for the Fine Gael main opposition party, described as “very disturbing” an RTE report that Ireland might be charged 6.7 percent interest on its nine-year emergency loans.
“This rate is far too high and is unaffordable on any reasonable projection of growth,” he said.
The Irish Times newspaper, citing a source involved in the talks, said the interest rate would be lower than that, but still higher than the 5.2 percent charged to Athens for its bailout, as the Greek loan was only for three years.
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