EU urges Ireland not to postpone austerity plan

The EU urged Ireland Tuesday to adopt an austerity budget on time in order to receive an EU/ IMF bailout, Reuters reported.

The Dublin government is on a knife-edge with damaged Prime Minister Brian Cowen challenging the opposition to let the 2011 budget pass December 7 before he calls an early election.

"Stability is important," European Monetary Affairs Commissioner Olli Rehn told reporters in Strasbourg after meeting Irish members of the European Parliament. "We don't have a position on the domestic democratic politics of Ireland, but it is essential that the budget be adopted in time, and we will then be able to conclude the negotiations on the EU-IMF program in time."

A delay in adopting the budget would almost certainly prevent the release of the first bailout loans under International Monetary Fund (IMF) rules, according to Reuters.

However, Cowen's chances of passing the budget fell dramatically when two independent lawmakers said they were likely to withhold support.

Leftist Sinn Fein activists scuffled with police outside Parliament on Monday in a possible foretaste of social unrest over harsh wage and spending cuts to be announced this week.

Meanwhile, Greece, the first country to be bailed out by the eurozone and the IMF earlier this year, earned a vote of confidence from the EU and IMF watchdogs Tuesday after promising extra measures to shore up its ailing finances.

The thumbs-up means Athens is likely to receive a third tranche of its 110-billion-euro ($150 billion) aid package, despite problems with tax collection and health spending.

Agencies