Poll rout strains Irish coalition

By Darren Ennis and Carmel Crimmins

DUBLIN (Reuters) - Ireland's government was badly shaken on Sunday with the main party set to lose a European seat to an anti-Lisbon Treaty group and its coalition ally warning another tough budget could destabilise the administration.

Prime Minister Brian Cowen's left of centre Fianna Fail has already suffered a record rout in local polls and a humiliating defeat in two parliamentary by-elections amid anger over its handling of the worst performing economy in western Europe.

"What we have to do now is to get on with our work as a government," Cowen said.

But an exit poll for broadcaster RTE and the Sunday Independent paper showed 55 percent of 3,342 voters want a general election this year rather than waiting until 2012.

Cowen's junior coalition ally, the Greens, signalled they would support him in a motion of no confidence proposed by the opposition for this week but it is no longer business as usual for them following a meltdown in the local elections.

Asked if the Greens would still be in government in a year, party chairman Dan Boyle told local radio: "I worry about the budget in December, I worry because it needs hard decisions to be made, it needs a stable government to make those decisions."

While other governments pour cash into their economies to defeat recession, Cowen is having to hike taxes and cut spending after a spectacular property bust left the former "Celtic Tiger" economy with the worst budget deficit in the euro zone.

Cowen hopes his measures will save eight billion euros in 2010-11, but analysts said both Greens and Fianna Fail backbenchers may object to cuts to social welfare and the health sector.