Irish PM to dissolve parliament

DUBLIN: Ireland's Prime Minister Brian Cowen will seek a dissolution of parliament and name the date for an election on Tuesday, paving the way for the two main opposition parties to form a coalition government within weeks.

Cowen, who stepped down as leader of the ruling Fianna Fail party last month and will not seek re-election to parliament, is likely to name February 25 for the poll that surveys say will hand his party a record rout.

The center-right Fine Gael party and center-left Irish Labour Party are the overwhelming favorites to take over with both parties determined to renegotiate elements of Ireland's 85 billion euro IMF/EU bailout deal agreed late last year.

"I'm confident that this can and will be renegotiated," Fine Gael's Enda Kenny told Newstalk radio on Tuesday.

"We will renegotiate it on the basis of accepting the (deficit) reduction to 3 percent (of GDP) by 2014/2015 and my focus is on the level of interest rate and the failed banking structure at its heart."

Kenny said he recognized Ireland could not renegotiate on a bilateral basis and in practice his hands will be tied by the poor state of the economy and the fact that any changes will need to be agreed with the IMF, the European Commission and the European Central Bank.

However, Kenny noted the growing support for giving Greece more time to pay back its EU bailout. Labour said on Sunday it would like to see Ireland given longer than the current period of around seven years to repay its loans.

The two parties have been at loggerheads this week over when the country should reduce its budget deficit to meet the EU limit of 3 percent of GDP, with Labour urging the EU on Sunday to look toward giving Ireland an extra year, until 2016.

That prompted one Fine Gael lawmaker to deem his future cabinet colleagues "not ready for government."