New Irish PM Cowen faces tough fight on economy

By Andras Gergely

DUBLIN (Reuters) - Brian Cowen, who takes over as Irish prime minister on Wednesday, has a reputation as a tough fighter -- something he will need if he is to deal with a turbulent economy and a challenging EU referendum campaign.

Bertie Ahern, who resigned on Tuesday after a corruption investigation began to overshadow his government's work, leaves as his legacy one of Europe's richest countries and a more stable Northern Ireland next door.

After a decade of construction-fuelled expansion, however, Ireland now faces much slower or negative growth.

Analysts hope Cowen will keep the discipline he showed as Ahern's finance minister and not overspend or agree to inflationary wage rises, which would hurt the competitiveness of exports and might tip Ireland into a recession.

"Cowen gives the impression that he has a sort of bulldog strategy in that he may take a tougher line with the unionists than Bertie Ahern," said Alan McQuaid, economist at Bloxham stockbrokers.

Cowen will also need to convince Irish voters to support the European Union's "Lisbon" reform treaty on June 12, in the only referendum planned on the issue among 27 member states. A recent poll showed most voters do not understand the treaty.

A cartoon in the Sunday Business Post newspaper likened Cowen's position to that of Giovanni Trapattoni, the star Italian coach hired recently to get the team into the 2010 World Cup finals after they missed out on Euro 2008.

"How do you fancy our chances in the big Lisbon match?," a reporter asks Cowen in the cartoon.