Irish prime minister steps down as party leader

Irish prime minister steps downNEW: Four senior Fianna Fail members are vying to head the partyBrian Cowen, hit hard by Ireland's economic crisis, relinquishes leadership An opposing party leader wants an immediate electionIrish voters are set to go to the polls March 11

(CNN) -- Embattled Irish Prime Minister Brian Cowen said Saturday that he will step down as leader of the Fianna Fail political party but stay on as prime minister until the March 11 elections.

A new leader will be elected at a special party meeting on Wednesday afternoon. At least four senior Fianna Fail members have signalled that they intend to stand for the leadership post.

They include Finance Minister Brian Lenihan and Micheal Martin, who earlier this week resigned as foreign affairs minister.

Two others doing double duty after being named to additional posts this week. Social Protection Minister Eamon O Cuiv, who was recently appointed Defence Minister, and Mary Hanafin, Minister for Tourism, Culture and Sport as well as the recently named head of the government's Department of Enterprise, Trade and Innovation, have also joined the race to lead Fianna Fail.

The focus should be on what policies the political parties are offering rather than the narrow focus of personality politics.
--Prime Minister Brian Cowen

Cowen, who recently called for the elections following the resignation of six government ministers in less than 24 hours, said he will concentrate on governing the country while the party comes up with a new leadership candidate.

"The focus should be on what policies the political parties are offering rather than the narrow focus of personality politics," he said at a news conference in Dublin.

Cowen cited internal criticism of his leadership as a factor in stepping down as ruling party leader.

"My attention now is to concentrate fully on government business and continue to implement the recovery plan," he said. "We must cast off the shroud of negativity."

Enda Kenny, leader of the main opposition party Fine Gael, said Fianna Fail was now a "leaderless party with a powerless" prime minister and called for an immediate election.

Kenny said he will move a motion of no confidence in Cowen as prime minister in next Tuesday's parliament session unless there was a dissolution of the parliament.

Another opposition party, Labour, had already put forward a motion of no confidence, not specifically in Cowen, but in the government. That motion is due to be voted on on Wednesday.

"It is simply not tenable for Mr. Cowen to remain on as (prime minister) as his colleagues in Fianna Fail squabble over the remnants of their party," said Labour leader Eamon Gilmore.

Sinn Fein President Gerry Adams, who is leaving Northern Ireland politics to stand in the Irish election, said Cowen's decision would lead to further instability.

"The government and Fianna Fail are in chaos. Their focus is not on the problems facing the country," Adams said.

Cowen survived a vote of confidence from his own party members this week, but top rebel Martin, the foreign minister, opposed him and resigned Tuesday.

Four more ministers resigned Wednesday night, and another quit Thursday, shortly before Cowen addressed the Irish legislature.

His government has been under pressure since applying for an international financial bailout last year, after insisting it did not need one.

As he called for new elections, Cowen said he "deeply" regrets "that people are suffering and experiencing immense hardship because of this recession."

But, he said: "Our budgetary strategy has helped to stabilize our economy, and return it to economic growth."

Wednesday's resignations included Minister for Health Mary Harney, Minister for Justice Dermot Ahern, Minister for Transport Noel Dempsey and Minister for Defence Tony Killeen.

Minister for Enterprise, Trade and Innovation Batt O'Keeffe quit on Thursday.

Cowen announced replacements for all of them on Thursday: Mary Coughlan at Health, Pat Carey at Transport, Brendan Smith for Justice, as well as Hanafin for Enterprise and O Cuiv for Defence.

Cowen took over the foreign minister's portfolio himself.

He has become a lightning rod of controversy, largely for his leadership in the economic crisis the country is facing.

Ireland accepted an 85 billion euro (U.S. $113 billion) bailout package last month from the European Union, International Monetary Fund and individual European nations.

Cowen requested the loan in November after days of claiming Ireland did not need help.

The government went deep into debt to bail out the country's banks during the financial crisis.

The goal of the aid, his Fianna Fail party said, was to return the nation's economy to sustainable growth and restore the health of its banking system.

A related four-year government austerity plan achieves savings through welfare cuts worth 10 billion euros ($13.2 billion) and higher taxes, expected to bring in 5 billion ($6.6 billion).

Ireland also unveiled a tough new budget, changing the income tax system, raising taxes on gasoline and diesel fuel, and reducing benefits for parents.

Dublin is cutting 6 billion euros (nearly $8 billion) from its budget as it tries to claw its way out of massive debt.

Journalist Peter Taggart contributed to this report.

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Irish leader won't quit over Ireland's debt crisis

Published January 13, 2011

| Associated Press

DUBLIN –  Irish Prime Minister Brian Cowen refused to resign Thursday despite mounting anger within his own party over his management of Ireland's European-record deficit and its international bailout.

Cowen successfully appealed to lawmakers planning a no-confidence motion to hold fire for a few more weeks. Crucially, his perceived chief rival for the party leadership, Foreign Minister Micheal Martin, declined to declare his interest in ousting Cowen as many lawmakers expected.

The premier stressed he must be permitted to stay in power long enough for his government to pass emergency deficit-slashing legislation in coming weeks. Then he would call a spring election — a vote his Fianna Fail party is forecast to lose amid record unpopularity.

"There's very few people who feel he'll be (prime minister) after the general election. So Fianna Fail face a strategic decision whether they'll do any better or worse without him as leader for that election campaign. Either way he's already a caretaker leader," said Kevin Rafter, a political analyst at Dublin City University.

He said it was "quite obvious" that Thursday's swirling rumors among lawmakers of an imminent push to oust Cowen came from supporters of Martin.

Cowen's survival leaves Ireland's parliament on course to debate and pass the Finance Bill 2011, a measure that will raise income taxes as part of a wider plan to slash €6 billion ($8 billion) from this year's deficit, which has reached 32 percent of gross domestic product last year, a postwar European record, because of mammoth bank-bailout costs.

Unable to keep paying those bills, Ireland in November negotiated a €67.5 billion ($90 billion) loan agreement with European Central Bank and International Monetary Fund experts.

Cowen was finance minister during the final years of Ireland's 1994-2007 Celtic Tiger boom, which was driven in its later years by tax incentives that fueled a runaway property market. He became prime minister in 2008 right at the moment the boom started to go bust amid fears that Dublin banks had become critically overexposed to souring property loans.

Determined to stop an outflow of cash from Dublin banks, Cowen insured their global creditors. That gesture didn't prove sufficient. Five banks had to be rescued anyway in a bailout and nationalization program expected to cost taxpayers at least €50 billion ($65 billion) — a bill Ireland found impossible to finance on its own.

Pressure within Fianna Fail for Cowen's removal has been growing since his U-turn on taking the EU-IMF bailout, a rescue that Cowen had long insisted Ireland would never need.

Criticism has risen this week after a new book disclosed Cowen's previously secret meetings with former leaders of Anglo Irish Bank, the most reckless of the Dublin lenders responsible for most of Ireland's losses.

He told lawmakers Wednesday that he did have two dinners and played golf with Anglo directors in the weeks before introducing the state insurance for bank debts — but insisted they had only been "shooting the breeze" and never discussed Anglo's funding crisis.

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