Irish minister resigns in difficult day for coalition

Reuters News
Posted: Sep 26, 2012 4:07 PM
Irish minister resigns in difficult day for coalition

DUBLIN (Reuters) - An Irish junior minister resigned on Wednesday, the second Labour minister to stand down in 12 months, delivering another blow to the coalition government after its hopes of a deal to ease its bank bailout terms were called into question.

Roisin Shortall, minister for state at the Department of Health, said in a statement on Wednesday evening that there was a lack of agreement on plans to reform in Primary Care and she would stand down.

Her decision follows a much-publicized dispute with Health Minister James Reilly, of the senior coalition party Fine Gael, over how to reform Ireland's health system.

Reilly is under pressure to rein in a large overspend on health care, and raised the prospect a month ago of public pay cuts in December's budget.

The split reflects wider tensions between the center-right Fine Gael and center-left Labour over the budget.

Shortall also said she would also be resigning as the whip of the parliamentary Labour party, the fourth Labour whip to quit since the government was formed.

The government was on Wednesday forced to insist that plans for an easing of the terms of its bank bailout were still on track after Germany, the Netherlands and Finland issued a joint statement on Tuesday.

The trio, the euro zone's strongest advocates of rapid deficit reduction as the price for aid, seemed to call into question much of what was agreed at a European Union summit in June, when leaders paved the way for the direct recapitalization of problem banks.

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They made a sharp distinction between future banking problems and "legacy" issues, dealing a potentially fatal blow to Dublin's hopes of selling stakes in its viable lenders to Europe's new rescue fund, and limiting its options for easing the burden of failed banks.

(Reporting by Lorraine Turner; Editing by Kevin Liffey)