Irish Government Faces Test

As it faces mounting challenges in the banking system, the economy at large and international bond markets, Ireland’s government faces a struggle for its own survival when parliament reconvenes Wednesday after a 12-week summer break.

While struggling to retain the confidence of bond investors, the government in the days to come will receive the Central Bank of Ireland’s most recent estimate of the cost of restructuring nationalized Anglo Irish Bank Corp.

But the government faces another battle: to maintain its majority in the Dail, the nation’s parliament, as it prepares for further budget cuts that it plans to announce in its Dec. 7 budget. It seems increasingly likely that the government will lose its majority in the early months of next year, and that voters will have to choose a new administration.

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