Irish bailout brings political uncertainty
The emergency bailout for Ireland has resulted in political uncertainty after the Green Party (a partner in the Government) called for a general election.
The Green Party’s leader, John Gormley, said: “We have now reached a point where the Irish people need political certainty to take them beyond the coming two months.
“So, we believe it is time to fix a date for a general election in the second half of January 2011.”
The news resulted in the FTSE 100 falling after earlier gains, while the euro also lost ground after rising earlier on the news of the emergency bailout.
The bailout, which is currently being finalised by European officials and the International Monetary Fund, represents the second this year – Greece was the recipient of an €110 billion bailout in May.
The bailout comes despite Ireland’s Government denying claims that it would accept emergency funding, insisting it was fully funded until at least the middle of next year.
However, emergency conference calls over the weekend involving G7 partners in the US, Japan and Canada clinched the deal.
Since the credit crunch three years ago, Ireland’s public finances have been battered by having to prop up the banking sector, a collapse in its property market and one of the worst recessions in the euro zone.
The former “Celtic Tiger” economy is also battling a deficit of more than £16 billion and the Irish Government is introducing tough austerity measures – something which many fellow euro zone nations have implemented.
It is aiming to save €15 billion (£13 billion) between 2011 and the end of 2014.
However, like many other nations, the savings are likely to cause protests and trade unions have already warned of “civil unrest”.
There are also plans to cut the minimum wage by one euro to €7.65 (£6.55).