Bank bailout channels Irish anger

By Steve Slater

DUBLIN (Reuters) - A winter of discontent is in store, as the Irish fume at a bailout plan which could burden a generation, and they say is way too generous to the banks who lent so freely when the "Celtic Tiger" was roaring.

Nurses, fire-fighters, senior civil servants and thousands more public sector workers are theatening to strike if their pay is cut to limit the damage on public finances, which economists see as inevitable in next month's budget.

While the public complaints echo criticism of bailout plans around the world, the options facing Ireland's government are limited. Its economy will shrink by 7.5 percent this year, a steeper fall than any advanced country aside from Iceland, according to the International Monetary Fund's latest estimate.

A euro member, Ireland has one of Europe's biggest budget deficits. The European Union has given it until 2014 to start shrinking it, but spending cuts are unavoidable.

"There is huge fury among ordinary people, who sense that the taxpayer is being made the patsy for what went wrong," said Richard Bruton, finance spokesman for Fine Gael, the main opposition party.

Prime Minister Brian Cowen's ruling Fianna Fail party, its majority in parliament thinned by resignations and by-election defeats, may face a snap election if backbenchers and coalition partners the Greens break ranks in the face of wide protest.

A lightning conductor for the problem is NAMA, or the National Asset Management Agency, the euphemistic name of a complex "bad bank" deal the government is trying to push through. Parliament is expected to approve it on Thursday.

A 54-billion-euro (49-billion-pound) sink for toxic assets to complete the clean-up of ailing banks, it shows taxpayers paying for the banks' recklessness and greed, people say.