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SAPPED: Ireland Braces for IMF Fight

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Created on Saturday, 20 November 2010 09:42
Written by Chris Cook
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Ireland Braces for IMF SAP Fight
by C. L. Cook
Calling it the "darkest day" Ireland has faced since independence, opposition party leader, Eamon Gilmore says the Taoiseach, or prime minister, should resign and a general election be called.
 
Following weeks of denying the International Monetary Fund (IMF) was involved in addressing Ireland's economic crisis, Mr. Cowan's Fianna Fail party admitted Friday the IMF, and Eurpean Union (EU), with the EU Central Bank, were indeed in talks with the Irish government.

Demanding Cowan's ouster, Gilmore questioned the credibility of the government, saying;

"We should have an immediate general election and we should have a new government in place before Christmas that is able to negotiate with authority and with confidence with the IMF, the EU and the European Central Bank." 

While Fianna Fail defence minister, Tony Killeen called suggestions an IMF deal would be a "casting away" of Irish economic autonomy "hysterical," health minister, Mary Harney insisted the government had nothing to be ashamed of, was best suited to lead talks with international bankers, and echoed leader Cowan who said he was negotiating a rescue package he hoped would provide certainty and stability for the economy.
 


Talking of the IMF deal negotiations to reporters at the opening of Dublin Airport's second terminal, Cowan said;
 
"We want to make sure that that's the best possible one for Ireland. It's a support for the country to improve the situation and provide certainty."

He was backed by Green Party leader, John Gormley who said the arrival of the IMF could prove a positive opportunity to restructure the economy.
 
Shell-Shocked is how the Irish Independent newspaper is describing Fianna Fail party reaction to the news. In Saturday's edition, reporter, Dionnan Sheahan claims as many as 40 TD's, or members of the Irish parliament, believe the IMF's arrival will sound a political death knell for their chances in the next elections.

Sheahan cites "Fianna Fail sources" as saying they despair the situation, and reveal a sense of a "collapse of morale" among the ruling party, many of whom she claims will retire from politics rather than face the anger of the electorate at the polls. Added to this, she writes, is the question of the Taoiseach's credibility, which has suffered due to what she calls the "bizarre" denial of government bailout talks with the IMF; talks that reportedly amount to some 15 billion Euro. 

The IMF and EU have proposed a four year plan, expected to be published next week under the title of the 2014 Budget Road Map. The purported 150 page document is said to contain "significant reforms" to the tax system, and supposed plans to raise property and service levies on water delivery, among other things.
 
 
The Budget Road Map is also believed to mandate cuts described as "draconian" to social welfare transfers. But, Fianna Fail says they will not cede ground on the 12.5% corporate tax rate, the lowest in the EU, saying that is "non-negotiable."

 
The government is reputed to be open to selling off state assets, or what are being characterized as "semi-state assets" like: the country's electricity provider, ESB; Bord Gais, Ireland's leading natural gas energy provider; and the National Lottery license. This all occurring as Ireland's independent banks increased their dependence on the country's central bank to bolster by some 30 billion Euro since the summer their flagging deposits.

The trifecta failure of  government privatization of prize assets, drastic reductions in social benefit, while raising taxes, and the introduction of foreign financial control policies spells disaster for a ruling party whose sovereigntist beginnings seem now a sad joke.

The first test comes fast with next week's by-election in Donegal, one the government is expected to lose to a resurgent Sinn Fein, led by the re-energized Gerry Adams, who seems now to be the real soldier of destiny in Irish politics.