Irish Prime Minister Brian Cowen vowed late Monday to remain on the job until the country's latest budget is passed and negotiations for a 100 billion-euro bailout are complete, despite calls for him to step down from both the opposition and his own party.
After a three-hour cabinet meeting, Cowen told reporters, with his ministers by his side, that he will remain on the job until December 7 when the 2011 budget is presented and voted on.
The European Union-International Monetary Fund bailout is contingent on Ireland passing its budget, and a number of lawmakers have suggested they won't support it if it contains severe cuts to key programs such as pensions, welfare and health care.
Cowen said the worst thing for Ireland now is to delay the budget vote and, therefore, the bailout negotiations with a three-week election campaign, saying further delays "would in fact weaken our country's position."
"The most important issue is the passing of this budget on the 7th of December," Cowan said. "Not to proceed with it would do grave damage to our interests."
Cowen told reporters that a general election will be called once the budget passes through parliament. In that case, an election could happen in January or February. In the meantime, Cowen said, his government plans to publish its four-year economic plan later this week, present the budget and move forward with negotiations with the EU and IMF.
Cowen faces opposition from other parties and from within his own Fianna Fail party, who say his credibility is in tatters after his abrupt about-face on the bailout.
One Fianna Fail lawmaker, Chris Andrews, called Cowen a failed communicator who "no longer has the confidence of the people right across the country. We must put the country first."
Leaders of the Labour party and Fine Gael were unbowed by Cowen's refusal to step down and promised to introduce a no-confidence motion in parliament on Tuesday.
Earlier Monday, the news that Ireland will accept bailout funds left Cowen's already-unpopular coalition government bracing for the political fallout.
Responding to news of the bailout, the junior member of the governing coalition announced his intention to force an early election.
Green Party leader John Gormley said Monday his party would continue to support Cowen's Fianna Fail party through the budget, but not long after.
"Leaving the country without a government while these matters are unresolved would be very damaging and would breach our duty of care," Gormley said. "But we have now reached a point where the Irish people need political certainty to take them beyond the coming two months."
Fianna Fail currently holds a three-vote majority in parliament, propped up in part by the Greens' six elected lawmakers. Cowen had been hoping to cling to power until 2012.
Ireland admits it needs help
The political storm followed the Irish government's admission earlier Monday that it needs the bailout loans after weeks of insisting it could manage its financial crisis.
Irish Finance Minister Brian Lenihan said that five state-supported banks will likely be unable to access normal credit markets for the next year and will need to be reorganized.
The country's banking problems have cost Irish taxpayers up to 50 billion euros (US$69 billion) over the past two years, as Irish authorities nationalized three banks and took major stakes in two others since September 2008.
While Ireland is said to have enough money to stay afloat until the middle of 2011, the country will receive loans from the EU and IMF worth up to 100 billion euros (US$137 billion).
BNN's Michael Kane said the EU-IMF bailout is intended to give Ireland some long-term stability as it sorts out its problems.
"The rescue package will keep the country solvent for at least the next three years, or at least, that's the plan," Kane said Monday morning.
Stock markets and the euro rose in response to the bailout plan Monday morning, before reversing course as attention turned to the other problems still plaguing the most debt-burdened members of the eurozone.
Ireland's credit rating will also take a hit, ratings agency Moody's said, announcing a plan to rate the island just above junk-bond status.
Risky property investments led to crisis
The Irish finance minister said his country's banks put themselves at risk by investing in soaring Irish, British and American property markets over the past decade.
"Because of the huge risks they took earlier this decade, they became a huge risk not only to this state but to the eurozone as a whole," Lenihan said.
Those banks will now be sold off, cut down or merged as part of the reorganization. Lenihan said the banks that remain will be reconfigured to focus on serving individual savers, home owners and businesses in Ireland.
In the long-term, Lenihan said the goal is for Ireland's banks to be able to borrow from open markets as soon as possible.
"We're not bust. We have substantial cash reserves and the EU recognize that," Lenihan said in an interview with Irish state broadcaster RTE, suggesting his country can follow the example set by South Korea, which resumed borrowing from open markets one year after it received an IMF bailout in 1997.
Lenihan has repeatedly insisted that the rescue loan will not exceed US$137 billion. But he said the numbers would only become clear after further negotiations with the IMF, the European Commission and the European Central Bank.
EU officials have indicated the rescue talks could be completed by the end of November.
With files from CTV's Tom Kennedy and The Associated Press
