Irish general election looms amid economic crisis

Ireland is to hold a general election within two months after the Green Party today stunned its Government partners by issuing a new year deadline for the vote.

Beleaguered Taoiseach Brian Cowen was dumped into a political crisis to match the economic chaos less than 24 hours after the Cabinet signed off on a multibillion bailout.

In a sensational twist, Green leader John Gormley signed the Government's death notice on day one of delicate negotiations with the International Monetary Fund (IMF) and Europe.

The Environment Minister demanded a general election by the second half of January as he lashed the spin machine behind the senior coalition partner Fianna Fail.

He accused strategists of last week ordering the Greens to toe an official line on how dire the Irish economic crisis had become.

"We were given an official line ... which was essentially a mixed message," he said.

The shock election deadline was set the day after Mr Gormley and Green communications minister Eamon Ryan sat with Cabinet colleagues for several hours working out how it would approach the IMF/EU for up to 90 billion euro (£77 billion) in loans.

Relations in the coalition had degenerated so far the Taoiseach was only issued with the ultimatum minutes before the Greens made it public in Leinster House, Dublin.

The threat quickly prompted calls from the opposition and two Independent TDs for an election.

Alongside eight members of the Green Party, including TD Paul Gogarty and his young daughter Daisy, Mr Gormley said the past week was traumatic for the Irish people, claiming they felt misled and betrayed.

"But we have now reached a point where the Irish people need political certainty to take them beyond the coming two months," Mr Gormley said.

In the midst of the sudden uncertainty over the Government's future, officials were working on a four-year Budget road map to recovery with headline figures on 15 billion euro (£13 billion) savings to be unveiled on Wednesday.

Department of Finance number-crunchers are analysing the finer detail of Budget 2011, due on December 7.

Mr Lenihan said the 8.65 euro (£7.39) minimum wage, the second highest in Europe, will have to be looked at. Social welfare cuts and new taxes are also on the cards.

The Government has faced damning criticism, calls for resignations and warnings of distrust among the public over the last week after initially insisting there were no talks with the IMF before conceding a loan might be needed and ultimately asking for one.

Several Fianna Fail backbenchers have warned that Mr Cowen's time is up.

Mr Gormley dismissed the idea of a general election on Friday only to meet his party on Saturday and decide on pulling out of Government.

But he said he wanted to back the draconian six billion euro (£5.1 billion) budget next month, the 15 billion euro plan and the IMF/EU funding before pulling the plug.

While he said he regretted the need for the IMF, he stressed support for an international bailout.

"I regret very much that the country is in the hands of the IMF and I think I and my colleagues are deeply upset by what has happened but we believe that we had to stay in government at all times to act in the national interest," he said.

But speculation is intensifying that Mr Cowen's beleaguered Government may not even make it to the new year, with a razor-thin majority to pass the worst Budget in the state's history next month and a by-election looming on Thursday.

Two rural Independent TDs, Michael Lowry and Jacky Healy Rae, warned the Government they can no longer be relied upon for support.

Fine Gael leader Enda Kenny said the Greens had plunged the country into further instability.

"What is needed now is an immediate general election so that a new government, with a clear parliamentary majority, can prepare the four-year economic plan, complete negotiations with the EU and IMF and frame a budget for 2011."

Labour leader Eamon Gilmore said the electorate should be able to vote in a new government as early as next month so it can begin leading the country to economic recovery.

"Fianna Fail has made a mess of the country; they have crippled the economy and brought national morale to an unprecedented low," he said.

Mr Cowen holds the constitutional power to dissolve the Dail at any stage.

About 50 protesters, some from Sinn Fein, forced their way into a security hut at the front gates of Government Buildings.

Among the demonstrators was one of the party's TDs, Aengus O Snodaigh, who said they were demanding the IMF leave the country and that a general election be called immediately.

"We're putting across the message that there is a huge level of anger out there amongst the normal punter, and that they're demanding that the Government goes, so we got that message across, hopefully, today," Mr O'Snodaigh said.

The groups marched from the gates of Leinster House, the seat of parliament, to Government Buildings which houses the Taoiseach's office.

A number tried to hold a sit-down protest after being escorted out of the grounds.

Fianna Fail members of the Cabinet are meeting tonight in Government Buildings.