Europe

Baku – APA. Ireland’s government saw its parliamentary majority cut to two on Friday, as voters in one of the ruling party’s heartlands punished it for seeking an IMF bailout and backed maverick nationalists Sinn Fein, APA reports quoting “Reuters”.
The loss of a seat in the remote northwestern county of Donegal complicates the country’s politics even as the deeply unpopular government enters the final days of a tense negotiation for an IMF/EU bailout for its banks and budget.
In what was expected to be the last day of trading before the terms of the bailout would be announced over the weekend, the extra yield investors demand to hold Irish debt reached a record high of nearly 7 percentage points above benchmark German bunds.
Deputy Prime Minister Mary Coughlan conceded that the ruling Fianna Fail party’s candidate had lost the seat to Sinn Fein, a nationalist leftwing party which has capitalized on popular anger over the government’s handling of the economic crisis.
The winner, Sinn Fein’s Pearse Doherty, said he was headed to Dublin to vote against the government’s budget on December 7 and try to force an election.
"I will try and bring down this government and make sure all of the parties get to go to the people," he said.
An election will take place soon anyway because Fianna Fail’s junior coalition partners, the Greens, said this week they will pull out of the government after the legislation underpinning the budget is passed, probably in the spring.
Sinn Fein’s head Gerry Adams, best known internationally as a leader of the nationalist movement during decades of violence in British-ruled Northern Ireland, said the goal was to take power in Dublin and end IMF-imposed austerity measures.
"We didn’t buy into the austerity. We’re not for the savage cuts where once again in the four year plan the wealthy get off," he told reporters, referring to a package of 15 billion euros in spending cuts and tax hikes announced this week by Cowen.
Sinn Fein, which now has a fringe role, is expected to emerge as a bigger opposition force, a sign of how dramatically the country’s politics are being upended by its economic crisis.
With nearly all ballots sifted, Doherty was leading the Fianna Fail candidate by 40 percent to about 20 percent, according to party representatives monitoring the count.
BAILOUT
The decision to take money and instructions from Europe has provided plenty of material for Irish comedians.
The country’s top talk radio show, the "Joe Duffy Show" played the "new" Irish national anthem to the tune of "Deutschland Ueber Alles" on Friday.
Cowen is expected to agree to an 85 billion euro assistance package from the IMF and the EU at the weekend, meant to prevent trouble spreading in the euro zone.
Portugal is already under pressure to follow Ireland and seek a bailout amid concerns Lisbon’s debt problems could drag down Spain, triggering a region-wide crisis.
Spanish bond yields rose on Friday amid mounting anxiety over where the crisis might spread to next.
Cowen needs to tackle the worst deficit in Europe as part of the condition of a bailout and a failure to get the 2011 budget passed next month would trigger the downfall of his government.
Cowen’s majority now depends on two independent members of parliament who have signaled they might vote the budget down. Nevertheless, a former leader of opposition Fine Gael, which is planning to take power soon, said the party would probably not allow the budget to fail.
"It doesn’t suit the opposition to defeat the budget although they may talk about it," said Garret FitzGerald. "If it was defeated it wouldn’t get them anywhere, then they would have to bring in the measures."
The measures, including cuts to the minimum wage and higher income taxes, are needed to reassure the IMF and Europe, which has been propping up Irish banks and stands ready to fund the Irish state for years.
The bailout is expected to see the state pour billions of euros into Allied Irish Banks, Bank of Ireland, Anglo Irish Bank and other lenders, on top of 46 billion euros already pledged, to reassure depositors.
The deal will see Dublin control its top three lenders, and according to a report in The Irish Times senior bondholders in the banks may also be compelled to pay some of the costs.

• Ukraine brings back 49 Ukrainians from captivity -PHOTO
• Gas reserves in European UGS facilities reach 93.4%
• Sweden postpones Türkiye security meeting due to airplane trouble