Leocadia blog

Irish prime minister to make statement on future

DUBLIN (Reuters) – Ireland's Prime Minister Brian Cowen will announce on Sunday evening whether he will stay as leader of the ruling Fianna Fail party in the wake of damaging revelations about his relations with former bankers.

Cowen, deeply unpopular because of an economic crisis, is already expected to lose power in an election planned for coming months. Should he announce his resignation, he could stay on in a caretaker role for a few months to push through a final 2011 budget bill, or he could call the election sooner.

"The Taoiseach (prime minister) has decided what he is going to decide and it is a matter for the Taoiseach to articulate that and not me," Deputy Prime Minister Mary Coughlan told state radio RTE. "He will be making a public announcement later on in the evening."

Fianna Fail said Cowen would make a statement at 1700 GMT (12 p.m. EST).

A number of ministers have told the 51 year old he needs to step down following revelations he played golf with the former chairman of Anglo Irish Bank just months before the scandal-riddled lender was taken into state care.

The media reports have revived allegations of cozy relations between Fianna Fail and the bankers and property developers whose reckless loans brought the country's economy to its knees, forcing Dublin to seek a humiliating EU/IMF bailout last year.

Fianna Fail parliamentarians are fearful of losing seats in what is set to be a record rout. Polls show the party that has dominated Ireland for nearly all its nine decades of independence losing half its seats.

Some hope that the party can reduce its losses if Cowen goes now, although others may believe that pushing Cowen out will not help. Would-be leadership challengers, including Foreign Minister Micheal Martin and Finance Minister Brian Lenihan, may prefer to let Cowen lead the party into defeat and then pounce.

The Labour party, which will table a vote of no confidence in the government later this month, said Cowen's credibility as prime minister had been hammered.

"The notion that a Taoiseach would go to negotiate on behalf of this state and not even have the confidence of his own political party would be wholly unacceptable," Brendan Howlin, a Labour party MP, told national broadcaster RTE.

"He is diminished and the country is therefore diminished."

Surveys show the center-right Fine Gael party and center-left Labour party are likely to form a new coalition government after a general election.

(Reporting by Carmel Crimmins)