DUBLIN (AP) — Ireland's lower house of parliament passed a deficit-slashing budget designed to comply with a massive international bailout's requirements, in a victory for the embattled minority government.
The bill passed the Dail 81-to-76 Thursday and goes to the upper house, which will debate the issue Friday and Saturday, broadcaster RTE reported.
Meanwhile, governing party Fianna Fail's newly-elected leader assumed his post Thursday. Former Foreign Minister Micheal Martin, 50, was among the ministers who deserted Prime Minister Brian Cowen's cabinet in recent days.
Cowen resigned as party leader on Saturday. Ireland's government has been heading for collapse since November, when Cowen was forced to take €67.5 billion ($91 billion) bailout loan from the European Union and the International Monetary Fund to prevent the country from going bankrupt.
Cowen set early elections for March 11, and opposition parties are trying to force him to hold them earlier. Polls suggest Fianna Fail is headed for an electoral disaster.
Fianna Fail won Ireland's last six elections dating to 1987 but the party has fallen to record low levels of support after Cowen led Ireland from the Celtic Tiger boom to the edge of bankruptcy.
Under the bailout deal, Ireland must slash €15 billion ($20 billion) from its deficit spending over the coming four years. The harshest cuts are being imposed this year.
The parliament has already approved bills to cut welfare benefits, the salaries of Cabinet ministers and the minimum wage, and raise school fees. But the toughest measures are in the Finance Bill: increasing income taxes across the 2 million-strong work force, raising effective tax levels to 41 percent or more.
Ireland's financial plight is not unique in Europe. Greece required a bailout before Ireland did and many analysts predict Portugal will be next, as nations across the continent are imposing painful cuts to claw back deficits.