MP resignation adds to pressure on Irish leader to hold early elections

The Irish government's majority was cut to just three after a senior party MP resigned from parliament yesterday, complicating Taoiseach Brian Cowen's efforts to tackle the worst budget deficit in Europe.

Deeply unpopular and struggling to convince investors that Ireland is not on the verge of a Greek-style debt crisis, the prime minister must push through the first of four rounds of austerity budgets in December.

Jim McDaid's surprise resignation makes an early parliamentary election next year more likely because there are now four empty seats in the lower house and Mr Cowen will be under pressure to hold votes for all four positions early next year.

With Mr Cowen's Fianna Fail party slumped to record lows in opinion polls, the government would struggle to win any of the four seats, wiping out its majority in the 166-seat lower house, and leaving it vulnerable to opposition attacks.

Mr McDaid, who had been stripped of his Fianna Fail party privileges for voting against the government two years ago, said he had resigned to spark an early parliamentary election.

"The country needs a stable government with a good majority and that is the reason why I did it," he said. "The current government with the current Dil (lower chamber] arithmetic cannot make the political decisions that are necessary," said the former minister for tourism.

Mr McDaid had threatened last week to vote against the 2011 budget unless his local hospital was protected from health cuts, so his departure will not threaten the plan's passage.

"He certainly wasn't a reliable vote so to some extent I don't think it's going to significantly change the arithmetic," said Theresa Reidy, lecturer in politics at University College Cork.

"But it is more of, 'the death by a thousand cuts' that had been suggested would take place and it brings us a step close to collapse. Sooner or later, the government is going to collapse because it is losing support quite regularly."

Mr Cowen is set to unveil a four-year plan detailing how his government will get the budget deficit under control later this month. But analysts are sceptical Dublin can shrink its shortfall back to the EU limit of 3 per cent of GDP by 2014.

The deficit will hit a jaw-dropping 32 per cent of GDP this year due to the one-off inclusion of a mammoth bill for purging Irish banks of soured property loans.But even on an underlying basis the shortfall will be 12 per cent.

However, Mr Cowen is hoping the four-year plan will bring Irish borrowing costs down to more manageable levels, enabling Dublin to resume sovereign bond auctions in January.

Mr McDaid said it would be better to hold a general election this year while Ireland was not seeking funding.

He said: "Can you imagine us looking to the bond markets at the same time as we are having a general election? You'll be paying through the nose."

Mr Cowen has signalled he will hold by-elections for three empty seats before the end of April. Opposition politicians have called for him to hold a vote for Mr McDaid's Donegal seat in tandem with those polls.

Nationalist opposition party Sinn Fein said elections for the positions needed to be called immediately.

"Jim McDaid's resignation is a signal that time is now up for this government," said Sinn Fein's Padraig MacLochlainn.