Cowen Wins Vote of Confidence to Stay as Leader of Ireland's Ruling Party

Irish Prime Minister Brian Cowen’s party backed his leadership, prompting the resignation of his main challenger, Foreign Minister Micheal Martin.

Cowen, 51, won a secret ballot of 71 Fianna Fail lawmakers, spokesman John Curran told reporters in Dublin late yesterday. While Martin, 50, opposed him, Cowen won the backing of Finance Minister Brian Lenihan, helping swing the vote in his favor. The ballots were shredded and details of the vote won’t be released.

“I was not interested in tearing anyone down,” Martin told reporters. “We go into this election as a united party behind our leader.”

Cowen said in a statement today he had assigned himself the foreign-affairs portfolio after Martin accepted the “consequences” of his challenge. Martin made his bid as polls showed support for the party plunging to a record low before elections due within three months. Since Cowen succeeded Bertie Ahern 2 1/2 years ago, unemployment has doubled, the financial system came close to collapse and the government had to seek an international bailout.

“We are fighting for the survival of our country,” Cowen said. He said he accepted Martin’s resignation “reluctantly.”

The extra yield investors demand to hold Irish 10-year bonds rather than German securities of similar maturity climbed 11 basis points to 587 points today. That is still lower than a euro-era record of 680 points on Nov. 30, two days after Ireland accepted the bailout.

Slump in Support

Support for Fianna Fail, in power since 1997, has fallen to 14 percent, while support for Fine Gael, the main opposition party, stands at 35 percent, according to a poll carried out this month by Red C for bookmaker Paddy Power Plc.

The government has introduced four austerity budgets since 2008, raising taxes and cutting spending, as it tries to reduce the fiscal deficit to the European Union limit of 3 percent of gross domestic product by 2014.

Cowen presided over an 85 billion-euro ($113 billion) bailout last year as investors shunned the country’s bonds on concern that the scale of losses in the financial system was rising.

Martin said that the handling of the bailout was a “watershed moment” in undermining his support for the leader. Lenihan helped negotiate the bailout.

In an interview with RTE yesterday, Lenihan said that Cowen has shown “lapses of judgment,” including a golf game with Sean Fitzpatrick, the former chairman of Anglo Irish Bank Corp., months before the state guaranteed the debts and deposits of six Irish lenders.

Still, Lenihan said the country needs “stable political leadership” and he’d support the prime minister.

“Your first duty is to the country,” he said.

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net; Joe Brennan in Dublin at jbrennan29@bloomberg.net

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

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