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Irish PM faces pressure over budget, early elections

By the CNN Wire Staff
STORY HIGHLIGHTS
  • Opposition party leaders demand to know when a new election will be held
  • Cowen: We'll dissolve parliament after the bailout, budget and fiscal plan are dealt with
  • Green Party called for new elections after the Cabinet signed off on the $11 billion bailout
  • Europe, IMF and Ireland continue to negotiate details of the bailout

Dublin, Ireland (CNN) -- Irish Prime Minister Brian Cowen came under attack from political opponents Tuesday as he faced them in person a day after announcing early elections.

Fine Gael leader Enda Kenny and Labour Party leader Eamon Gilmore hammered Cowen over the timing of elections and over the budget.

Kenny said politicians would work overtime to get a "slimmed-down" emergency budget passed, while Gilmore demanded to know when voters would get the chance to choose a new government.

But Cowen held his ground, making no concessions despite the pressure his government is under.

The Irish government has been in crisis since Sunday, when it announced it would seek international financial help to deal with serious budget problems.

The government had insisted earlier it did not need the bailout from the European Union and the International Monetary Fund. The rescue package is estimated at tens of billions of dollars.

On Monday, the Green Party, one of several parties in Ireland's coalition government, called for new elections.

Green leader John Gormley wants the elections to be held at the end of January.

Cowen confirmed later Monday that he would seek the dissolution of the Dail, Ireland's parliament, but only after legislators have passed the 2011 budget and published a four-year fiscal plan, and the bailout loans have been confirmed.

"This past week has been a traumatic one for the Irish electorate. People feel misled and betrayed," Gormley said in a written statement. The party has said that its involvement in the government would go on "as long as it was for the benefit of the Irish people," but added, "We have now reached a point where the Irish people need political certainty to take them beyond the coming two months."

"So we believe it is time to fix a date for a general election in the second half of January 2011," he said.

The international bailout comes with required spending cuts that Irish politicians are saying will be a shock for voters.

Cowen requested substantial "financial assistance" from the EU and the IMF on Sunday evening, and pledged spending cuts and tax increases.

The request came less than a week after the prime minister said Ireland had "made no application for external support" for its debt-ridden banks, which Dublin has spent billions trying to buttress.

In addition, the British government offered Ireland a 7 billion-pound ($11.3 billion) direct loan on Monday.

Labour's Gilmore had called on the Greens to bring the government down if the senior party, Fianna Fail, didn't agree to new elections in January. He praised the Green announcement, saying the coalition partner "has at last recognized what the country has realised for many months -- that this government is long [past] its sell-by date and that it is incapable of leading the country to economic recovery."

Fine Gael's Kenny called for "an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan" to spur Irish recovery.

Fears about Ireland have pushed down the value of the euro against the dollar and put stock markets under pressure.

Ireland is forecast to run a deficit of 11.9 percent of its GDP in 2010. And overall, the country is grappling with a running tab of debt that will total 98.5 percent of its entire economy this year, Cowen said last week.

Since 2008, Ireland has enacted strict budget-cutting measures, slashing about $20 billion off the country's budget. Now it's time for round two, as Cowen plans to cut an additional $20 billion over the next few years.