"Handshake across the Himalayas"
India and China will study new ways to ease tensions along their ill-defined border, Chinese Premier Li Keqiang said on Monday in his first foreign trip since taking office, which comes just weeks after a military stand-off between the Asian giants in the Himalayas. Full Article | Slideshow
Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage
Whoever leads Ireland is stuck with bailout
DUBLIN (Reuters) - Ireland's opposition parties may grumble about the terms of an EU/IMF bailout, but when they come to power in a matter of months as widely expected they will have little room to escape the measure.
Prime Minister Brian Cowen and his ruling Fianna Fail party are headed for defeat in an election early next year that is all but certain to put the opposition Fine Gael and Labour parties in control of the country.
Both, especially Labour, have complained about the terms of the bailout and the details of a four-year plan of tax hikes and spending cuts that underpins it.
Their anger was on display in the hours after the deal, in the tough language common to Irish political discourse.
"It's hard to imagine how the deal could have been much worse. People are right to feel frightened and worried about the future when our own government has sold out the country on such lousy terms," said Fine Gael finance spokesman Michael Noonan.
Labour's Joan Burton said: "The trap is closed on Ireland and we are hovelled as a country, and the EU and the IMF have us where they wanted us and our negotiators seem to have been less good at playing negotiations."
But both parties nevertheless generally accept the overall austerity targets the International Monetary Fund and European Union are demanding, which will leave them little scope for big policy changes.
Most Irish political analysts expect Cowen will be able to enact the country's toughest budget ever as his swan song next month, delivering the first 6 billion euros of the 15 billion in cuts he has promised to make by 2014.
The vote on the 2011 budget will nevertheless be extremely close, with Cowen's two-seat majority depending on two independent members of parliament who say they have not made up their minds. In extremis, Fine Gael could end up being pressed to abstain rather than voting against the budget.
Cowen's Fianna Fail party's junior coalition partners, the Greens, have already said they would pull out of the government after the budget was settled, meaning an election would probably take place by February or March.
LITTLE PUBLIC UNREST SEEN
The Irish are furious with the government for its management of the economy and see the bailout as a loss of sovereignty, particularly humiliating in a country where political discourse is steeped in the long struggle for independence from Britain.
The public have already endured two years of spending cuts, tax hikes, wage cuts and relentless job losses that have pushed the unemployment rate from about 4 percent to 14 percent.
Nevertheless, there has been little civil unrest of the type that has hit other European countries like Greece or France.
About 50,000 people took to the streets of Dublin on Saturday. Their protest was peaceful and largely aimed at the government's austerity measures rather than at the IMF or EU.
Despite the global economic woes, Ireland is still a much wealthier country than it was a generation ago and its generous social welfare system has so far shielded most families from poverty.
People are resigned to the bailout and most remain proud that Ireland is an open economy. They are more inclined to blame their ills on the government than on international institutions.
In a country with a long history of emigration, many Irish are voting with their feet. Net migration turned negative last year for the first time since the boom when the country attracted tens of thousands of extra workers each year.
Here is a breakdown of the impact of the austerity plan on Ireland's main political parties.
Fianna Fail - Cowen's centre-right party, which has dominated Ireland's politics for nearly all of the 90 years of its independence, is reviled by the public for causing the recession and faces defeat in the polls. It could lose half its seats in parliament or more.
Fine Gael - The biggest opposition party and Fianna Fail's historic rival on the centre-right, Fine Gael supports the targets of 6 billion euros in cuts or tax hikes next year and cutting the budget deficit to 3 percent by 2015. It may have difficulty explaining to voters just how it would differ from Fianna Fail. Some critics within the party have questioned the leadership appeal of leader Enda Kenny.
Labour - The centre-left party is third in parliament and will face a tough task beating Fine Gael to lead the next government. More likely, it will join Fine Gael as the junior partner. Labour speaks out more forcefully than Fine Gael against the government's economic programme, and would like fewer cuts and more tax rises. It wants 4.5 billion rather than 6 billion euros in cuts next year and more emphasis on growth to meet deficit targets, but its leaders say they will not be able to renegotiate major points of the bailout agreement.
Sinn Fein - The left-wing party, known for its role at the forefront of the nationalist movement during decades of violent resistance to British rule in Northern Ireland has so far played only a fringe role in the Irish republic. It has just five seats in parliament but hopes to make big gains in the next election as the main voice opposing the entire programme of cuts and tax rises. It says it wants deficit reduction to be put off by a number of years to allow economic growth.
The Green Party - Fianna Fail's junior coalition partners with just six seats are probably headed for a wipeout in the next election amid disgust with the government.
(Additional reporting by Carmel Crimmins)
- Tweet this
- Share this
- Digg this