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Irish Ruling Party Meets Amid Speculation on Cowen's Future

Lawmakers for Ireland’s ruling Fianna Fail party are meeting today amid speculation that Prime Minister Brian Cowen may face a leadership challenge.

They began talks at 3 p.m. in Dublin. A spokesman said in a phone interview that nothing unusual was on the agenda.

Cowen “may well” face a confidence motion, broadcaster RTE reported, citing an unnamed minister. Cowen, who presided over Ireland’s 85 billion-euro ($113 billion) bailout last year, has been criticized this week by opponents over his contacts with former Anglo Irish Bank Corp. Chairman Sean Fitzpatrick two months before the government introduced its bank guarantee in September 2008.

The government, which relies on support from independent lawmakers, may fall if Cowen steps down.

“I will not be voting for an alternative Fianna Fail” prime minister, Michael Lowry, an independent lawmaker, said in a statement today. “Because of the political uncertainty and instability that prevails, it is imperative that this parliament be dissolved and an immediate general election take place.”

Cowen had contact with Fitzpatrick in July 2008, including playing golf and having dinner, according to a book “The Fitzpatrick Tapes,” published on Jan. 9. In September that year, Ireland guaranteed the deposits and liabilities of all its banks. Cowen said yesterday in parliament there is “no question of inappropriate behavior.”

Poll Slump

“There’s no motion, no item on the agenda this afternoon relating to confidence in the leadership, so the issue is not formally before the meeting today,” Finance Minister Brian Lenihan said today in remarks broadcast by RTE.

Cowen said last month that he will hold national elections early this year. Support for Fianna Fail plunged to 14 percent, according to a poll carried out this month. The largest opposition party, Fine Gael, is backed by 35 percent, the survey by Red C for Dublin-based bookmaker Paddy Power Plc showed.

Ireland agreed to a European Union-led bailout in November after losses at its banks became too big for the state to handle alone. The Irish yield premium over benchmark 10-year German bonds declined 6 basis points today to 524.6 points. It reached a record of 680 basis points on Nov. 30.

The benchmark Irish stock market, the ISEQ, fell 0.8 percent as of 3 p.m. in Dublin. The opposition Sinn Fein party said in an e-mailed statement today it has proposed a motion of no confidence in Cowen as prime minister.

Foreign Minister Micheal Martin is favorite to be the next leader, Paddy Power said on Jan. 6. Lenihan is second-favorite.

Cowen, who was born in Tullamore in the Irish midlands, was finance minister from September 2004 until he became prime minister in May 2008. Once a Gaelic football player, he worked as an attorney before he was elected to parliament in 1984 to take the seat vacated by the death of his father.

To contact the reporter on this story: Dara Doyle at ddoyle1@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.

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