Ireland's junior coalition party withdrew from Prime Minister Brian Cowen's government on Sunday, signaling the end of a crisis-riddled administration and hastening an election due on March 11.
The Greens said, however, they would support legislation underpinning the 2011 budget, as agreed under an 85 billion euros EU/IMF bailout, to ensure a swift election, possibly in February.
The Green Party's move highlighted continuing political uncertainty over efforts to cope with financial crisis rooted in a collapse in the property market and a malaise of the banking system.
"It conjures this picture of a country where there is deep political crisis as well as economic crisis," said Austin Hughes, chief economist at KBC. "It will hurt sentiment."
All of Ireland's mainstream parties want the finance bill, which legislates for tax changes already implemented in the budget, passed before the poll.
The two main opposition parties, the center-right Fine Gael and center-left Labour, have issued an ultimatum to Cowen to get the bill passed by Friday or they will pursue motions of no-confidence in him and his government this week.
"I don't want another weekend of this kind of uncertainty where we're the subject of jokes and puns internationally," said Labour MP Pat Rabbitte.
Over the past week, eight ministers have resigned, an ill-judged cabinet reshuffle backfired and Cowen stood down as leader of the Fianna Fail party.
Without the support of the Greens, Cowen would certainly lose any confidence vote and have to call an immediate election, shelving the finance bill but not damaging Ireland's fiscal goals given that the tax measures in the 2011 budget have already taken effect.
The premier, attending a Gaelic football match in the central Irish town of Portlaois while his government was imploding in Dublin, said such a timetable was too tight.
"It's not possible to get it done in a week," Cowen said, adding that Finance Minister Brian Lenihan would meet with counterparts from all opposition parties on Monday to discuss how to fasttrack the finance bill.
AN ASYLUM
The Greens have been itching to end their partnership with Cowen's Fianna Fail party since November when the government was forced to apply for an 85 billion euros bailout from the EU and the IMF to save the banking sector from collapse.
Their three and a half year tenure in government saw Ireland transformed from economic star to euro zone basket case on the back of a disastrous property bubble.
With the administration lurching from crisis to crisis, Greens' leader John Gormley recently likened being in government to being in an asylum.
Relations between the two parties broke down completely last week when Cowen, fresh from winning a vote of confidence within his party, tried to reshuffle the cabinet in an apparent bid to boost the election chances of his colleagues.
Cowen's subsequent decision to resign as leader of the Fianna Fail party amid mounting internal criticism but remain as premier prompted the Greens to finally end the partnership.
"Our patience has reached an end," Gormley said in the same five-star Dublin hotel where Cowen had on Saturday announced the end of his leadership of Fianna Fail.
But on the streets of Dublin there was little praise for the Greens, who like Fianna Fail, are fighting for their survival in the forthcoming poll.
"They have been halfway out the door for weeks now. It's a joke. They should have pulled the plug months ago," said Geraldine Feeney, 42, a part-time sales assistant.
The Greens' withdrawal leaves Cowen with just seven ministers, the constitutional minimum, to fill 15 ministries. He said he would reassign the two Green ministerial portfolios to an already overburdened cabinet.
Opinion polls indicate that Fine Gael and Labour will form the next coalition government.
His Fianna Fail party will elect a new leader on Wednesday with bookmakers expecting former foreign minister Micheal Martin to beat three other challengers, including Finance Minister Brian Lenihan, in the contest.
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