Ireland is edging closer to political uproar today, with Taoiseach (i.e. prime minister for goddsake) Brian Cowen being accused of “clinging to power”, and rumours that members of his own party, Fianna Fail, may vote against him.

A successful no-confidence motion would throw preliminary plans for an Irish bailout into disarray, since Germany, the EU and the IMF are all demanding that the government put in place a full austerity plan immediately, ahead of a more comprehensive budget, before any potential change of leadership takes place. But increasing numbers of Irish people are suggesting that that is to put the cart before the horse, and that Cowen should call an election immediately.

The Cowen government is a coalition between Fianna Fail (with 71 seats in the 150 seat lower house of the Dail) and the Greens with six seats. The Greens have already told Cowen that they will not support the government past December, obliging him to schedule a January election.

However, he would only need to lose the support of three Fianna Fail members for a no-confidence motion to have a chance of success. Realistically it would need to be a larger split, as the opposition is fractured between several parties — Fine Gael (51 seats), Labour (20), Sinn Fein (4), and 11 independents. Even if the three parties lined up against Cowen — by no means a certain proposition — he would be bound to get the support of some independents.

The centrepiece of the rescue package is a takeover of the (private) Bank of Ireland by the government — though it won’t be full nationalisation, it will be close enough. The plan is a full surrender to financial markets, and the purest expression of the socialisation of debt principle. As everywhere else, the whole austerity approach will simply trap Ireland into years of reduced demand and underdevelopment, as the gap between the European centre and its peripheries widens.

Meanwhile, politics in the Republic has come roaring back with a vengeance. At the beginning of the year, when Greece was in meltdown, the proud boast of those marching was “we are not Ireland” — a reference to the supine way in which the Irish had accepted their first austerity package in 2009.

But the situation has moved on from then. It’s precisely because the Irish accepted an austerity package so willingly that they are now doubly angry — having done everything asked of them they are still being punished by the markets and the EU. With a by-election in Donegal due on Thursday — one that Fianna Fail will lose (though the seat they held has been vacant for some time) to Sinn Fein — and mass rallies planned for the weekend, the pressure on Cowen will only increase.

At the moment all sorts of different approaches are being suggested as a way of kicking the politics to the next level. Sinn Fein has taken the running as the most clearly oppositional party, with Gerry Adams suddenly detached from the business up north to lead the charge in the Republic. Others, such as the writer Fintan O’Toole, are arguing for a mass civil protest movement and a caretaker government of minimal scope prior to an election

Various mouthbreathers and financial journalists will continue to say that the Irish should just knuckle under and take their lumps, that this was simply the fault of the banks, lax regulation regimes and so on.

It isn’t of course, anymore than froth drives the wave it sits atop of. The overwhelming cause of the economic devastation hitting the whole of the European periphery comes from the application of a failed and flawed laissez-faire economics, which allows untethered finance markets to take monopoly power over the process of capital allocation and development.

Those countries that managed to develop prior to this takeover — the northern European social democracies — laid a basis for themselves by developing a cycle of social investment that gave them a highly educated workforce with a highly developed export oriented economy.

The creation of the euro and the role of the ECB in setting national fiscal policy effectively made that strategy impossible for later contenders. The figures are clear: the euro has wrecked the export potential of the entire European periphery. Corruption etc plays no great role in this.

Greece was as corrupt in the 50s as it was in this decade — the difference being that in the 50s, with generous US funds and a national development strategy, it grew by 8% a year, for 15 years. The draining effect of the euro has left places like Ireland with no option but the reverse strategy — a race to the bottom (slashing tax rates), and a pumped-up, import inflated, funny-money economy in the place of real development.

Does the euro have two years left? It’s started to slide in the markets, and if the Irish troubles cause Portugal and Spain to start to creak at the joints, then it may go through the floor. Though people think of Europe as a dead place and the past, it’s suddenly stepping into the future again — a place where politically literate populaces confront obviously failed systems and a desperate political class trying to keep them going. Anything’s possible at the moment and symbolism abounds everywhere — such as the fire sale the bank of Ireland will be holding of its art collection. It’s scheduled for the Shelbourne Hotel — where 88 years ago Michael Collins and others drafted the Irish constitution and launched the Republic.

You couldn’t make it up and no one knows what’s next…