Gilmore: Quitting will not rock the Coalition

Outgoing Labour leader Eamon Gilmore has insisted the Coalition will not be plunged into instability as a result of his resignation as Labour leader. He urged his successor to keep the party in Government until the end of its mandate in 2016.

However, doubt has been cast over the ability of a new leader to achieve the biggest task of agreeing a budget with its Fine Gael partners in the face of an anti-austerity backlash, after Finance Minister Michael Noonan said there is room to ease the €2bn of planned cuts.

While tax and employment data pointed to a brighter fiscal outlook, Mr Noonan said he would have limited scope to ease up on cuts in October.

“We’ll have a better idea as the summer goes by of what the quantum of adjustment necessary is but these things are governed by the new fiscal rules in Europe, so there isn’t that much domestic discretion regardless of what the political pressures are to vary from the targets,” he said.

Speaking in Brussels, Mr Gilmore said the budget would have to address the problem that people are not experiencing economic recovery in their lives. He announced his resignation earlier this week after an implosion of his party’s support in the local and European elections which left it with dramatically reduced representation on councils and without any MEPs.

Reflecting on the results yesterday, Mr Gilmore said: “I had a sense during the election campaign that people were saying: ‘Yes, we understand what you had to do to rescue the country from an economic disaster. Yes we do understand that jobs are being created and we’re seeing economic growth again. But my household budget is down and it’s tightened... and we have challenges’.”

Social Protection Minister Joan Burton is expected to announce her candidacy today, which will focus on the need to “improve living standards” for families. She is likely to be the most popular candidate among the 5,000 grassroots members who will have a vote, according to party sources.

Dublin Mid-West TD Joanna Tuffy last night confirmed she would be backing Ms Burton.

Junior health minister Alex White is also expected to announce his intention to contest the job, and some TDs say he has bigger support among the parliamentary party.

Public Expenditure Minister Brendan Howlin hinted he would also contest the post, saying he would be part of the “reform” of the party but “what role I’ll play I’m going to decide in the next day or two”.

Nominations opened last night and the new leader will be decided by July 4, when Mr Gilmore will step down as leader but stay on as a TD. The Tánaiste dismissed suggestions that the contest could destabilise the Coalition. “There will be an orderly transition to a new leadership and there is no question in relation to the stability of the Government,” he said.