Political chaos engulfs Ireland, threatens bailout

Rebels from PM's own party press to oust premier; opposition leaders demand an election before Christmas

Topics: Ireland, Economics, European Union,

Political infighting engulfed Ireland on Tuesday, threatening to trigger a quick election and delay a massive EU-IMF bailout. Rebels from Prime Minister Brian Cowen’s own party pressed to oust him and opposition leaders demanded an election before Christmas.

Despite the discontent, Cowen’s Cabinet colleagues in the Fianna Fail party said they were confident the rebels have too few votes to pursue a no-confidence motion against Cowen.

At stake is the future course of the potentially euro100 billion ($135 billion) European Union and International Monetary Fund rescue of Ireland, a nation heading toward bankruptcy next year because the government cannot pay an ever-escalating bill to save its state-backed banks.

Ireland’s deficit this year is 32 percent of GDP, the highest in Europe since World War II. Its banks are running short of cash because they can’t borrow on open markets. Analysts increasingly warn that Ireland’s bank-bailout bill could ultimately reach euro90 billion ($125 billion) — double the government’s current forecast — because of defaults looming down the road, particularly in residential mortgages.

The Irish political and economic crisis, and its uncertain solution, drove up borrowing costs Tuesday for Portugal, Spain, Greece and Italy, all of whom face their own mounting debt-financing struggles. The rising interest rates on eurozone bonds reflect fears that a third member of the 16-nation eurozone — after Greece and Ireland — might be backed into its own bailout corner soon.

The Irish Cabinet gathered at Cowen’s office to complete a four-year plan for unprecedented budget cuts — a condition of Ireland’s international bailout. The plan, which proposes to slash euro15 billion ($20 billion) from the country’s 2011-14 budget deficits through a combination of cuts and tax hikes, is to be published Wednesday. The 2011 budget will follow Dec. 7.

Transport Minister Noel Dempsey said the EU-IMF rescue aid couldn’t flow until Ireland began slashing euro6 billion ($8.2 billion) from its 2011 deficit.

“We don’t have the luxury of time in relation to this,” Dempsey said. “We asked for assistance. We were given that assistance on the basis that we were going to produce this four-year plan, that we were going to produce a budget, and that budget would pass. If we can’t do that, then the assistance isn’t there.”

Two separate Fianna Fail meetings were scheduled for Tuesday — one led by party rebels, the second by the party’s full 70-strong bloc in Dail Eireann, Ireland’s parliament.

“There’s serious discontent within the parliamentary party. I believe it’s now up to those who’ve spoken out to take soundings amongst their colleagues to take action to remove that man (Cowen) immediately,” Fianna Fail lawmaker John McGuinness said.

But Cowen loyalists said McGuinness and other rebels wouldn’t be able to gather the 18 signatures required for a no-confidence vote to be scheduled.

Cowen conceded Monday night he must call an election next year but sought to delay it as long as possible. His hand was forced when the junior party in his coalition, the Greens, said it would withdraw support once the 2011 budget passed.

The Greens said they expected the country to hold an election by late January, but Fianna Fail officials say the budget will require multiple votes on different tax increases, which could drag the process into February.

The Fianna Fail minister for tourism and the arts, Mary Hanafin, accused the Greens of undermining Ireland at a critical moment.

“I’m not sure they (the Greens) have shown they have the best interests of the country at heart,” Hanafin told Irish state radio RTE.

Hanafin said she wouldn’t back any push to oust Cowen — but would put her name forward if the leader’s post became vacant.

At the European Parliament in Strasbourg, France, EU monetary and financial affairs minister Olli Rehn gathered Ireland’s 12 European lawmakers for a confidential briefing — and came out stressing they must stop the political infighting long enough to pass the 2011 budget.

“It is essential that Ireland pass the budget in the timeline foreseen, and sooner rather than later, because every day that is lost increases uncertainty,” Rehn said.

Cowen pleaded with opponents not to force him from office until the budget becomes law and the EU-IMF money is flowing into Irish banks. But opposition lawmakers emphasized they were determined to oust him as soon as possible in pursuit of a pre-Christmas election.

“What’s the point of a government preparing a four-year plan that they won’t preside over, that they won’t be there to implement, and that they haven’t consulted the people on?” said Fine Gael lawmaker James Reilly.

Reilly and Labour lawmakers both contended that, if Cowen resigned immediately and dissolved parliament, an election in mid-December could lead to the new government’s revised budget being passed by Christmas. Dempsey of Fianna Fail, however, called that schedule “quite impossible.”

Labour and Fine Gael are refusing to say whether they will actually vote against the budget, should Cowen survive to Dec. 7. If either party’s members abstained, the budget would pass by default.

“It may be the case that the main opposition parties will abstain on the vote. It’s imperative they do that in the national interest,” said Dermot O’Leary, analyst at Goodbody Stockbrokers in Dublin.

Shares in Ireland’s three remaining banks on the Irish Stock Exchange tumbled for a second day Tuesday as investors foresaw increasing bailouts and state control as inevitable.

Patrick Honohan, the Irish Central Bank governor, fueled those fears with a speech Tuesday to Dublin accountants. He said Ireland’s bank-rescue efforts were right in theory but had failed to restore the confidence of foreign investors, who have withdrawn tens of billions’ worth of deposits since the summer.

He said Irish banks must greatly increase their own reserves in response and actively seek foreign buyers.

“They’re all for sale as far as I’m concerned,” he said of Ireland’s six banks, three of which have already been nationalized.

Bank of Ireland shares plummeted 33 percent to a new record low of euro0.26 before recovering slightly. Allied Irish Banks fell 17 percent to euro0.34. Insurance and mortgage specialist Irish Life & Permanent — Ireland’s only bank yet to receive a state bailout — shed 9 percent to euro0.76, then recovered virtually all of its losses in afternoon trade.

The government already owns 36 percent of Bank of Ireland and 18 percent of Allied Irish. The latter bank expects to hand more than 90 percent ownership to the government next month after it offers euro6.6 billion in new, overpriced shares for sale — and finds the government is the only buyer.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>