Ireland will have a general election in the new year but only after a new austerity package is finalised, the Taoiseach has said.
Fianna Fáil leader Brian Cowen has refused calls to stand down, saying that he wanted to stay in power to pass the crucial €6bn savings in next month’s budget.
Despite Opposition demands for a snap election, he declared the drastic cuts were in the national interest.
“We believe that there is a clear duty on all members of Dail Eireann to facilitate these measures in the uniquely serious circumstances in which we find ourselves,” the Taoiseach said.
“The political and financial stability of the State requires no less.”
The Taoiseach was dumped into a political crisis to match the country’s economic chaos less than 24 hours after the Cabinet signed off on a multi-billion bailout – unaware his two colleagues in the Green Party, leader John Gormley and Eamon Ryan, spent Saturday plotting an exit strategy.
Mr Cowen denied he felt betrayed.
After an emergency meeting with Fianna Fail Cabinet members in Government Buildings, the Taoiseach dismissed talk of a heave against him or that he had been pushed by the Greens into agreeing to go to the polls.
He said all colleagues had given him full support, including Mr Gormley.
Mr Cowen called for solidarity on a €15bn four-year roadmap to recovery due tomorrow (Wednesdsay) and the estimated €90bn bailout loan from the International Monetary Fund and Europe.
He said that passing Budget 2011 on December 7 would be the greatest statement of confidence Ireland could give the world.
“I believe that in relation to this issue at this time for this country, this country’s interests at the moment go well beyond any personal considerations of me as Taoiseach, or anyone else in the party or anyone else in any other party,” he said.
“It is always been my intention to ensure that we get the job of national importance done in the interests of the country and then to see what positions will be taken thereafter.”
Junior coalition partners the Greens had earlier stunned the Taoiseach by issuing a new year deadline for a general election.
Mr Gormley signed the Government’s death notice on day one of delicate negotiations with the IMF and Europe demanding an election date be set for the second half of January.
Mr Cowen said he planned to dissolve the Dail (parliament) in the new year.
The Greens also claimed a confusing spin machine was operating behind the senior coalition partner Fianna Fail. Mr Gormley accused strategists of last week ordering his party 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.
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.
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.
But the Taoiseach said he later spoke to Mr Gormley who had pledged his support for the Government.
About 50 protesters, some from Sinn Fein, forced their way through the main gates of Government Buildings during an afternoon march.
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.
The opposition and two Independent TDs also demanded a vote.
Several Fianna Fail backbenchers have warned that Mr Cowen`s time is up.
Mr Gormley dismissed the idea of a general election last Friday only to meet his party on Saturday and decide on pulling out of Government.
But speculation is intensifying that Mr Cowen may not make it to the new year, with a razor-thin majority to pass the worst Budget in the state’s history on December 7 and a by-election looming on Thursday.
Main opposition Fine Gael leader Enda Kenny said: “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: “Fianna Fail has made a mess of the country; they have crippled the economy and brought national morale to an unprecedented low.”
In the budget the €8.65 minimum wage, the second highest in Europe, look set to be cut by one euro along with social welfare cuts and new taxes on the cards.
The Government has faced 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.