Brussels, 24/02/2011 (Agence Europe) - Ireland will be holding general elections on Friday 25 February. The European Commission will not countenance any changes to the austerity programme negotiated with Ireland although anger with the country's international bailout programme in Ireland looks set to defeat the current government.
After the implosion of the ruling coalition and mutiny within his own party, Irish Prime Minister Brian Cowen was forced to hold early elections and has announced that he is withdrawing from politics after the election. However, this was not enough to prevent the collapse of his party, Fianna Fail (FF), a centrist party expected to be severely punished in Friday's election because it was the prime minister's party that signed the €85 billion bailout deal with the European Union and the International Monetary Fund (IMF) last year.
A spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn said that Ireland's economic programme had been reached in agreement with the European Union (negotiated by the European Commission) and Ireland, and in its broad strokes it had to be implemented. The spokesperson, Amadeu Altafaj Tardio, said that it would enable Ireland to return its economy to sound fundamentals and more sustainable growth, with banks that serve the wider economy, along with greater transparency so that the Irish will not have to pay in the future for excessive risk-taking and bad management. He added that talks would be taking place to ensure the programme is implemented as effectively as possible and reflects changes in the economy (the programme incorporates annual adjustments in line with economic indicators).
The Commission also explains that the talks about the loans for Ireland have taken place. The spokesperson recalled that the decisions about interest rates did not apply to Ireland alone but to all eurozone countries. The decisions taken at that time were not applicable to any country in particular. Questions related to the European Financial Stability Fund are currently being discussed by member states and the Commission but nothing has yet been changed, said the spokesperson.
The latest poll results, published on Wednesday 23 February, suggest that FF will get 14% to 15% of the vote and around 20 seats, compared with its current 74 seats. Its great rival, Fine Gael (another centrist party), is expected to win a landslide victory with 38% to 40% of the vote and 72 seats (compared with the current 51), not far off an absolute majority (83). If the results turn out like this, Fine Gael is expected to form a government with Labour, a left party expected to win 18% to 20% of the vote (the same as in the last election). Fine Gael's sudden hike in popularity is due to a belligerent speech by its leader, Enda Kenny, demanding a renegotiation of the conditions attached to the international bailout programme, a renegotiation desired by 82% of the Irish public. He said on Tuesday 22 February during the last televised debate of the election campaign that the interest rate had to be renegotiated, along with the cost of bailing out the banks. He said that the 6% interest rate charged by the EU on its loans was punitive.
When it comes to restructuring Ireland's banks, the Fine Gael leader wants the burden to be shared with bond-holders, an idea that is causing alarm in the EU markets. We will have to wait until Saturday night for the election results. (L.C./transl.fl)