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Ireland confronts political mutiny in wake of bailout

Ireland's Green Party has said it will pull out of its coalition under Prime Minister Brian Cowen. Cowen has called for elections in early 2011, but opposition leaders want a vote now.

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Just two hours after the Green Party announcement, things got much tougher for the government when the two independent parliamentarians, Jackie Healy-Rae and Michael Lowry, announced they were unlikely to continue supporting the government, including a budget that made cuts to old-age pensions.

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Until this morning, the government had a slim majority of just three votes in the Dáil, Ireland’s parliament. If Mr. Lowry and and Mr. Healy-Rae move to the opposition benches, it would precipitate an immediate general election.

Fine Gael and Labour call for snap election

Opposition parties seized on the defections to attack Fianna Fáil's credibility and call for a snap election to avoid further political uncertainty.

“What is needed now is an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan, complete negotiations with the EU and IMF, and frame a budget for 2011,” Enda Kenny, leader of the main opposition party Fine Gael, said in a statement.

Eamon Gilmore, leader of the center-left Labour Party, also said an election was needed now. “After thirteen years of bad government and weeks of lying to the Irish people, the unprecedented decision taken on Sunday effectively represents the handing over of the deeds of the country to the EU and the IMF," he said.

The prospect of EU-IMF aid being used to plug the gap in the country’s stricken finances has proved controversial – as have the figures, generally estimated to be around €90 billion ($123 billion).

But the true figure will come closer to €250 billion ($341 billion), says Trinity College Dublin finance Professor Brian Lucey, who is not alone in this bleak prognosis. Economist Constantin Gurdgiev of Trinity College also says the reported bailout figure of €90 billion is low, estimating it will come closer to €160 billion.

Anger bubbles over

Anger has not been confined to the parliament or halls of Irish universities. Left-leaning republican party Sinn Féin demonstrated outside Dáil Éireann, Ireland’s parliament, this afternoon to protest at austerity measures and the EU-IMF bailout.

BBC news footage shows Sinn Féin lawmaker Aengus Ó Snodaigh, who represents a predominantly working-class district of Dublin, being attacked by a police officer as the protesters pushed their way past the gates of the parliament.

European stock prices and the euro currency fell on international markets at the news of Ireland’s political crisis. Both had risen yesterday in response to apparent stabilization of the Irish situation.

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