Ireland's main opposition Fine Gael party will seek to renegotiate an IMF/EU 85 billion euros rescue package to get a lower interest rate if it is elected to power next year, a senior member said on Sunday.
The centre-right Fine Gael party and the centre-left Labour party are expected to form a coalition government following a parliamentary election, possibly in February or March, and are campaigning to redraw the terms of the bailout.
"What we are going to look for is a mandate to renegotiate the deal to get a lower interest rate," Leo Varadkar, Fine Gael's spokesman on energy, communications and natural resources, told national broadcaster RTE.
"It's not going to work, the current deal, as it stands. We are not going to be able to make those payments."
Prime Minister Brian Cowen's administration has pledged to tackle the worst budget deficit in Europe, shrink the country's banks and subject Dublin to close financial scrutiny in order to access the external funding. Fine Gael and Labour have complained about the terms of the bailout and accused Cowen of squandering the nation's sovereignty but they accept its overall austerity targets, squeezing their room for manoeuvre.
Ireland is contributing 17.5 billion euros of the 85 billion euros package and its debt management agency has said the remaining 67.5 billion euros is based on an average interest rate of 5.82 percent.
The actual rate charged will depend on the market rates at the time of each drawdown. Ireland, whose 10 year paper is currently trading around 7.8 percent, is expected to tap the first tranche early next year.
Cowen will put the EU/IMF deal to a parliamentary vote on Wednesday, in a politically charged move designed to put the main opposition parties under pressure.
Labour has said it will vote against the agreement. Fine Gael has said it will decide its stance after a parliamentary meeting on Tuesday but Varadkar said he expected the party to give it the thumbs down. "My expectation is that we will vote against it on the basis that we want to renegotiate it."
Emboldened by the ease at which a record austerity budget is passing through parliament, Cowen is clearly confident the bailout will get the thumbs up from the chamber despite his razor-thin majority and plunging popularity.
The IMF's board will vote on its portion - 22.5 billion euros - of the bailout on Thursday, provided the Irish parliament approves the package.