DUBLIN — The Irish government lost its power base Monday, a day after being forced to accept a massive bailout from the European Union and the International Monetary Fund.
Irish Prime Minister Brian Cowen said he would call an early election next year, once Ireland passes an emergency budget and finalizes the bailout.
The admission represented a huge political blow to Cowen, who only days ago was denying even the need for a bailout to solve the problems brought on by Irish banks’ reckless speculation in overpriced real estate.
His coalition partner, the Green Party, forced his hand, saying it would quit the government and then demand an early election in January.
Cowen resisted pressure to resign immediately, but soon, even lawmakers in Cow en’s Fianna Fail party also called on him to go.
Cowen said he couldn’t quit now because that would delay Ireland’s deficit-slashing 2011 budget and the bailout negotiations — and jeopardize efforts to sustain the nation’s cash-strapped banks.
He insisted he would step down and face re-election only once Ireland’s most brutal budget in history is passed and ongoing negotiations with the IMF and the European Central Bank produce a bailout deal expected to approach $135 billion.
Analysts say Cowen faces an uphill struggle even to clear the first hurdle of the 2011 budget when it faces an initial vote after its unveiling Dec. 7.
Ireland’s rescue, which follows a Greek bailout in May, is the European Union’s latest attempt to win back market confidence and keep its 16-nation euro currency strong and stable. But the cost, both monetary and political, keeps rising by the day.
Several budget votes aren’t expected until late January or February, which under Cowen’s terms would mean an election in March — long after analysts expect him to be forced from office.
Cowen said Ireland can’t afford a national election now.
“The most important issue is the passing of this budget on the seventh of December,” he said.
