Up to 120,000 protest in recession-hit Ireland

DUBLIN (AFP) — Up to 120,000 protesters brought Dublin city centre to a standstill on Saturday over government austerity measures aimed at stabilising the once high-flying economy now wracked by recession.

The demonstration came a day after the global economic crisis led to another political casualty elsewhere in Europe, with Latvia's prime minister quitting as his country grapples with deepening recession.

Organised by the Irish Congress of Trade Unions (ICTU) and featuring teachers, police, civil servants and others, the Irish protest was the "first step in a rolling campaign of action," ICTU general secretary David Begg said.

Police put the number of protesters at up to 120,000.

Marchers are particularly opposed to a pension levy on some 350,000 public servants which is designed to save about 1.4 billion euros (1.8 billion dollars) this year.

According to IMPACT, Ireland's biggest public sector trade union, the levy will cost low to middle-income earners between 1,500 euros and 2,800 euros a year.

The union's general secretary Peter McLoone has said his members were angered by the way in which public servants were singled out by the levy for "a harsh and inequitable penalty".

Irish Prime Minister Brian Cowen is bringing in an initial two-billion-euro package of cuts designed to stabilise the one-time Celtic Tiger economy, which entered recession in the first half of 2008.

Cowen has said the economy will shrink by up to 10 percent by 2010 and warned of total savings of 15 billion euros needed over five years in a bid to stabilise Irish finances.

In a statement to coincide with the demonstration, the government said it recognised that the measures it was taking "are difficult and, in some cases, painful" but they were also "necessary and fair."

"They are necessary because it is essential that we show a credible start on the correction of an emerging unsustainability in our public finances," it said.

"Failure to show that credible start means that we impact directly and severely on our international reputation among investors and, in particular, on our capacity to raise funds, and on the direct cost of servicing the borrowing which we are able to undertake."

The ICTU describes the government's measures as "lacking in fairness and focussing only on 'stabilising' the public finances at the expense of economic renewal and job protection."

The global economic crisis, which has hit many European countries hard, has led to political instability in several parts of the continent.

Iceland's government became the first political casualty of the downturn when it was forced to step down on January 26 following months of protests against politicians and central bankers.

A new interim government comprising the Social Democrats and the Left Green party has been in power since February 1, and new elections are expected to be held in April.

More recently, Latvia's Prime Minister Ivars Godmanis quit his position on Friday, amid widespread discontent over belt-tightening and politicians' alleged corruption and nepotism.

Latvia showed the fastest economic growth in the European Union in 2006 but its economy is expected to contract 12 percent this year, with unemployment soaring to 12.7 percent from the current 8.3 percent.

Fellow Baltic states Lithuania and Estonia face similar troubles.