Police said they expected about 50,000 people to join a march against the four-year austerity package announced on Wednesday by Prime Minister Brian Cowen, aimed at slashing Ireland's huge budget deficit.

Up to 3,000 people gathered at the start of the protest, holding placards saying "Eire not for sale, not to the IMF".

"The cuts are not necessary. The banks are being rescued, not Ireland. The banks should take the hit -- cut them loose," said Marian Hamilton, 57, who was attending the protest with her seven-year-old grandson.

The demonstration will pile more pressure on Cowen the day after his Fianna Fail party suffered a humiliating by-election defeat which cut the FF/Green Party coalition's parliamentary majority to just two.

Cowen has been fighting off calls from opposition lawmakers to quit, insisting he must see through the austerity package and a budget due on December 7 because they are pre-conditions for the bailout.

European Union heavyweights Germany and France are urging a rapid conclusion to negotiations on the EU and International Monetary Fund loans, reportedly worth up to 85 billion euros (113 billion dollars).

Sources in Brussels said the talks, aimed at shoring up Ireland and stopping the crisis spreading to other troubled eurozone countries, would likely wrap up Sunday in time for an announcement before markets open Monday.

Media reports suggest Ireland might be charged 6.7 percent interest on the nine-year loans, significantly more than the 5.2 percent rate charged to fellow eurozone country Greece when it was bailed out earlier this year.

The 15-billion-euro austerity package will cut the minimum wage and slash 25,000 public sector jobs as Ireland strives to bring its deficit under three percent of gross domestic product by 2014. It is currently at 32 percent.

Irish Congress of Trade Unions president Jack O'Connor, the head of Ireland's biggest union SIPTU, said it was "the harshest budget since the foundation of the state".

"This is the result of allowing speculators, bankers and developers to run riot, pillaging and ruining our economy," he said.

Ireland's national sovereignty was at stake, he said, adding: "We must not stand idly by while the final nail is driven into the coffin."

Hundreds of police officers and a helicopter were mobilised for Saturday's march through Dublin city centre to the General Post Office, the highly symbolic site of the declaration of Irish independence in 1916.

Cowen's government has insisted that Ireland's austerity plan and next month's budget are crucial steps to show fellow members of the 16-nation euro area that it is putting its finances in order.

He refused to go to the polls until lawmakers have passed the measures, not likely before January, but opposition parties have said he no longer has a mandate to govern.

In Friday's by-election in Donegal, the opposition socialist Sinn Fein party took what was once a stronghold of Cowen's Fianna Fail party.

Labour Party leader Eamon Gilmore said the party "has neither the political mandate nor the moral authority to make the crucial decisions the country now faces."

The Irish Times said the budget would probably go through given the pressure from the EU and the IMF, but added: "There is a general consensus that Mr Cowen's days are numbered."

Meanwhile Michael Noonan, finance spokesman for the Fine Gael main opposition party, described reports of the 6.7 interest rate on the bailout loan as "very disturbing".

"This rate is far too high and is unaffordable on any reasonable projection of growth," he said.




An image for the news story Irish rescue talks in crunch, thousands protest
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27/11/2010 18:01

By Peter Graff and Lorraine Turner

DUBLIN (Reuters) - Irish talks to secure an 85 billion euro aid (72.2 billion pound) package entered the final hours on Saturday with opposition parties warning they would oppose any deal that forced the country to pay a high interest rate on EU/IMF loans.

Negotiators were holed up in a 250-year-old Dublin luxury hotel to finalise the deal, which the country needs to help it cope with mounting losses at state-owned banks and a massive budget deficit that will rise to nearly a third of total economic output this year.

The rescue, the second in the euro zone after Greece was bailed out in May, is expected to be announced after a teleconference of EU finance ministers at 1500 GMT on Sunday.

Thousands of demonstrators marched through the streets of the Irish capital to protest against the deal, which European leaders hope will calm markets and help put an end to a debt crisis that has shaken the 16-nation euro zone.

The fear is that investors could instead turn their attention to other high-deficit countries like Portugal or Spain, testing Europe's readiness to put up more taxpayer money to secure the future of its ambitious single currency project.

Irish opposition parties that are expected to take control of the government in the coming months said a deal would be unacceptable if the interest rate on loans from the EU and IMF was too high.

A media report late on Friday said the package could cost taxpayers as much as 6.7 percent a year, although the government denied the cost would be that high.

"If true, it would be an appalling capitulation by the Irish government," Irish Labour Party leader Eamon Gilmore told a party conference. "And it would be a betrayal of the founding principles of the European Union."

The government's communications minister Eamon Ryan told a radio talk show that the deal had not yet been sealed but that figure cited by RTE was "inaccurate" and the final rate would be lower.

Fine Gael, the main opposition party, has said it would consider any rate above 6 percent excessive.

Fine Gael and Labour are expected to rout unpopular Prime Minister Brian Cowen's Fianna Fail party in an election that is likely to take place within months. They have said they would be bound by any deal but may try to renegotiate details.

"NO PORTUGUESE PARALLELS"

European officials have been at pains to play down the links between Ireland and Portugal, widely seen as the next euro zone "domino."

Because of its close economic links with its much larger neighbour Spain, they fear a market assault on Portugal could set off a chain reaction engulfing the euro zone's fourth largest economy and stretching the 750 billion euro aid facility the EU and IMF set up after Greece was pushed to the brink.

"There are no parallels between Ireland and Portugal," Jean-Claude Juncker, who heads the group of euro zone finance ministers, told a Belgian newspaper.

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