October 1, 2009 / 12:29 PM / 10 years ago

FACTBOX-Ireland's main political and socio-economic risks

DUBLIN, Oct 1 (Reuters) - Ireland faces several threats which could topple Prime Minister Brian Cowen’s unpopular government this year.

Here are some of the main risks ahead for Cowen’s coalition, from Friday’s referendum on the European Union’s reform treaty to the parliamentary vote on its 54 billion-euro ($78.7 billion) “bad bank” plan and December’s expected budget cuts.

LISBON TREATY REFERENDUM

- If Irish voters reject the EU’s Lisbon reform treaty for the second time in as many years on Friday it would encourage the ruling Fianna Fail party to replace Cowen as premier or even lead to a snap election that would banish them to opposition, given the government’s near record low ratings.

(For a story on consequences of the vote for the EU please click on [ID:nLS75770])

Opinion polls indicate a majority of Irish voters are in favour of the treaty, with a big enough margin to make a last-minute swing to the “No” side less likely than at the June 2008 plebiscite, but that cannot be ruled out. [ID:nLQ726413]

THE GREEN PARTY AND THE BAD BANK SCHEME

- Members of the Green Party, the junior members in Cowen’s coalition, are holding a conference on Oct. 10 to vote on the National Asset Management Agency (NAMA), Ireland’s “bad bank” plan, as well as on the review of the government programme.

If two-thirds of members vote to oppose either the government programme or NAMA, the Greens have said they will walk out of government. [ID:nLQ283996]

Analysts expect the Greens to remain in the coalition but there are precedents for them to cause an upset. Last year 63 percent of their members voted to support the Lisbon Treaty, short of the two-thirds mark, meaning the Greens could not conduct an official campaign ahead of that year’s referendum.

If the Greens’ support is secured for NAMA, Cowen still needs to convince some independent deputies and two members of his Fianna Fail party who have resigned their party whips to get it passed. [ID:nL5523518] That is seen as less problematic however than the Green vote.

BUDGET CUTS AND STRIKES

- After two emergency budgets focused on raising taxes, Ireland is still looking for 4 billion euros of savings in the 2010 budget to be unveiled in December.

Finance Minister Brian Lenihan has said he will not increase taxes further apart from introducing a new carbon levy, but the alternatives — such as cutting welfare payments or public sector pay — are just as likely to unleash a storm of protest.

SIPTU, one of the country’s biggest unions with over 200,000 members, has said industrial action is inevitable and IMPACT, Ireland’s largest public sector union, has already started balloting employees for potential strike action. [ID:nLS212034]

In a sign of growing discontent among public sector workers, police officers and other emergency workers united in the “Frontline Services Alliance” have become some of the most vocal opponents of spending cuts.

Health workers are demanding a pay increase. [ID:nLT665833]

THREATS TO NORTHERN IRISH PEACE, GANGLAND CRIME

- Attacks this year by dissident Republican groups in the UK province have threatened to undermine the peace process based on a power sharing executive between pro-Irish and pro-British political groups.

Cooperation between the executive’s joint leaders has come under pressure due to differences over plans to devolve policing powers to Belfast from London.

Authorities on both sides of the border say the Republican splinter groups are closely linked to criminal gangs engaged in smuggling, drug dealing and other criminal activities across the island of Ireland.

The Irish government, citing a threat to the “very foundations” of the legal system, has introduced tough new laws to crack down on gangland crime allowing non-jury trials, secret hearings and “opinion evidence”. [ID:nL8499395]

For an analysis on the hurdles ahead click on [ID:nLN18574]

For an economists’ poll predicting Lisbon win [ID:nLU446974]

Reporting by Andras Gergely; Editing by Elizabeth Fullerton

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