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Irish prime minister wins confidence vote, as expected


Latest update : 2009-06-10

Brian Cowen, prime minister of Ireland, won a vote of confidence by Parliament thanks to the support of the Greens. The opposition Fine Gael party had proposed a motion of no confidence after Fianna Fail's election losses.

REUTERS - Irish Prime Minister Brian Cowen won a vote of confidence on Wednesday as widely forecast, but he is expected to remain under pressure from the junior coalition party and backbenchers as he implements tough fiscal measures.

Cowen won by 85 votes in favour and 79 against in the parliamentary vote, thanks to the support of the Greens, who have warned another austerity budget in December could make their partnership difficult.

Markets are worried that political pressure in the aftermath of humiliating government losses in local and European elections will discourage Cowen from unpopular spending cuts to tackle the worst budget deficit in the eurozone.
Finance Minister Brian Lenihan said he would not shy away from further unpopular measures needed for economic recovery.

"The government will continue to take actions to restore order and sustainability to the public finances," Lenihan said in the closing speech before the vote.

Investors are concerned about the amount of debt Dublin will need to raise to cleanse its banking sector of soured loans following the collapse of a local property bubble.

Moody's will conclude its review of Ireland's AAA rating after a visit to the country in the coming weeks but the prospects do not seem rosy after rival agency Standard & Poor's cut its rating to AA, the second reduction in three months, and kept the outlook on negative this week. [ID:nL8601886]

Not bankrupt

Dublin has to squeeze 8 billion euros in spending cuts and tax hikes, on top of previous measures, in 2010-11 to bring its budget deficit under European Union limits by 2013.

"The reality is that this country is not bankrupt," Lenihan said. "As a country, we are moving from a decade-long position of being a net borrower from abroad to being in a position where Ireland's external debt is actually falling."

Local bookmaker Paddy Power has said Cowen is still odds-on favourite to be prime minister next year and the odds on a parliamentary election this year had drifted due to a view that the Greens would not pull the plug on the government.

The Green's leader John Gormley has said he will consult party members in the next few weeks on their election defeats, which saw their number of councillors cut to three from 18.

Cowen's Fianna Fail party lost 75 seats on local councils and fell behind the main opposition party for the first time following the June 5 poll.

"We heard from the electorate last Friday, we have to work harder and more effectively to lead Ireland to recovery," said Transport Minister Noel Dempsey, who directed Fianna Fail's election campaign.

Fianna Fail also lost its European Parliament seat for Dublin to a member of the Socialist Party and was routed in two parliamentary by-elections.

The opposition Fine Gael party proposed a motion of "no confidence" in the government after Fianna Fail's election losses. However parliament on Wednesday instead voted on a counter-motion of "confidence" in the government tabled by the cabinet, which Cowen won.

Date created : 2009-06-10