Irish multibillion bailout depends on four-year savings plan ­– minister

Ireland’s multibillion bailout is only secure if the government pushes ahead with a drastic four-year savings plan despite calls for a snap election, a senior minister said yesterday.

Transport Minister Noel Dempsey vowed the Cabinet would continue to finalise the €15 billion road map to recovery, due to be published today.

Mr Dempsey also called for co-operation across the political system after Prime Minister Brian Cowen defied demands for an election before Christmas.

He said the opposition needs to put the country first, put aside politics and back the estimated €90 billion bailout loan from the International Monetary Fund (IMF) and the European Union.

“The easiest thing for us to do at the moment is to walk away from this, to have an election, to allow somebody else to come in and wash our hands of the whole thing,” said Mr Dempsey, whose constituency office in Trim, Co Meath, was targeted on Monday night by vandals who spray-painted the word “traitor” and smashed windows.

“But that is not what we believe is the right thing to do,” he added.

“We don’t have the luxury of time in relation to this. We went, we asked for assistance, we were given that assistance on the basis that we were going to produce this four-year plan, that we were going to produce a budget and that budget would pass. If we can’t do that then the assistance isn’t there.”

On Monday night, hours after the junior coalition Green Party called for a general election, an embattled Mr Cowen said he wanted to stay in power to pass the crucial €6 billion savings in next month’s budget.

Mr Cowen also called for solidarity on the 150-page four-year plan, which will contain significant reforms to the tax system, with new levies in property and water and cuts to social welfare.

It is being inspected by experts from the IMF and the European Commission.

The Prime Minister, who will dissolve Parliament in the New Year, later rang Fine Gael leader Enda Kenny and Labour Party leader Eamon Gilmore directly about the vital cuts, which will be the harshest in the history of the state, and offer access to officials in the Department of Finance.

Mr Dempsey said the purpose of the phone call was to inform the leaders the message from the European Central Bank was that any assistance was granted on the basis of the plan and budget.

But both parties again called for an immediate general election.

Fine Gael’s deputy leader James Reilly said: “What’s the point in people preparing a four-year plan that they’re not going to preside over and they won’t be able to implement and that they haven’t consulted the people on?”

A Labour spokesman said it was in the best interest of the country for a new government with the mandate of the people to make the needed adjustments.

The embattled Prime Minister was dumped into a political crisis to match the economic chaos less than 24 hours after the Cabinet signed off on a multibillion IMF/EU bailout.

In a twist, Green leader John Gormley signed the government’s death notice on day one of delicate negotiations on the loans, calling for a date to be set in January for the election.

But Mr Cowen said it was not in Ireland’s interests to go to the polls immediately.

He said the decision to continue leading the government was sincere, honest and based on a well-informed belief.

Mary Hanafin, Tourism Minister, claimed the Greens’ election call suggested the party did not have the best interests of the country at heart.

“I’m very annoyed by it,” she said.

“It certainly wasn’t expected. I’m not sure that they have shown that they have the best interests of stability of the country at heart but we will just work with them over the next couple of months.”

The IMF mission to Ireland was in negotiations yesterday with the Department of Finance. Colm McCarthy, University College Dublin economist who last year compiled a report on government spending cuts, was also invited in for meetings.

On Monday, the Fund issued an academic paper, signed off by lead negotiator in Dublin Ajai Chopra, that minimum wage and dole payments should be cut.

The position paper said Ireland had to tackle its rising unemployment rate and should gradually reduce benefits over the time a person is out of work and impose stricter job search requirements.

The IMF called for more resources to be pumped into the unemployment agencies, like Fas, to provide efficient assistance to the growing number of people looking for a job.