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Brian Cowen in the Dáil this afternoon. Photograph: BBC News 8.43am: Good morning from Dublin. We will be liveblogging today from Ireland, where the growing political unrest has spooked Europe and the markets.

Brian Cowen, the prime minister, is clinging to power by his fingertips – there is mutiny in the air, with Fianna Fáil backbenchers considering a no-confidence motion. A group of them are meeting today to discuss "a strategy in relation to a motion of no confidence."

"There's serious discontent within the parliamentary party. I believe it's now up to those who've spoken out to take soundings amongst their colleagues to take action to remove that man [Cowen] immediately," John McGuinness, who represents Carlow in the Dáil (parliament), said.

The political instability is horrifying Europe, which is nervous that the December budget may not even be passed. Olli Rehn, the EU's commissioner for monetary affairs, has said he wants to stop the "bush fire" in Ireland turning into a "forest fire" across the eurozone. He has called Irish MEPs to a meeting today.

The Irish Times is reporting that the embattled Cowen phoned the leaders of the opposition parties last night to try to secure their support for the budget.

Mr Cowen phoned Fine Gael leader Enda Kenny and Labour Party leader Eamon Gilmore late last night to offer to make available to them the financial advice underpinning the government's proposed budget.

While the taoiseach made no direct request to Mr Kenny or Mr Gilmore to help him get the budget through the Dáil on December 7th, his phone calls to them signalled the first move in a strategy to persuade the opposition to let the budget pass.

The cabinet meets later this morning for what will be a particular tense meeting of Fianna Fáil and Green party, which bounced the taoiseach into making his announcement that he would be seeking a dissolution of the Dáil following the passing of the budget.

Meanwhile, the IMF is seeking a cut in Ireland's minimum wage, a decrease in the long-term dole and more tax relief for women. The measures were published in a staff position paper note posted on its website last night.

It recommends a "gradual decrease of benefits over time of unemployment and stricter job search requirements". In an effort to increase the number of jobs it said public resources should be targeted to the "knowledge-based economy" and it wants to see more competition in energy and telecoms services such as broadband.

The IMF paper is also seeking a reduction in the cost of waste disposal and legal fees.

The most surprising measure, however, given the austerity measures in the upcoming budget, is its concession that women need more financial encouragement to come back to work.

The report says that "cutting labour income taxes paid by women by 5 percentage points" would increase the GDP by 1.75 percentage points.

I'll be following all the day's developments live today.

9.00am: Ireland's largest opposition party, Fine Gael, is demanding an election before Christmas and refusing to support a budget that it hasn't been consulted on. The move will horrify Brussels, which needs cross-party support for the budget and the four-year plan, due to be published tomorrow, as a condition of the IMF bail out.

Health spokesman James Reilly told RTE Morning Ireland:

What's the point in preparing a four-year plan that they're [Fianna Fáil] not going to preside over and they're not there to implement and they haven't consulted the people on? If we have an election tomorrow, it can all be done and dusted in 18 days, we all have an opportunity to put forward ... our respective plans for the country and people can vote on that and have their say and that government would have a mandate for the next four years to do what's necessary.

His remarks come just hours after the embattled Cowen telephoned opposition leaders requesting their support.

Last night Fintan O'Toole, the author and Irish Times columnist, said it was unthinkable that the electorate should go to the polls on the basis of a "secret deal" between the IMF and Fianna Fáil.

9.12am: One of the most bizarre spectacles in this morning's papers is the photo of a sombre-looking Green party TDs (MPs) lined up behind a desk in Leinster House yesterday.

Daisy Gogarty: 'curly-headed poppet'. Photograph: Julien Behal/PA

It was the most important press conference the Irish Greens have ever called and second from the left was one "bizarre" guest. Lise Hand in the Independent explains:

When the line of Greens walked into the room, there was a gasp from the gobsmacked press.

For Paul Gogarty had managed to upstage his party leader's most dramatic ever announcement by arriving into the press conference with his 18-month-old daughter Daisy in his arms.

The camera went berserk as the curly-headed poppet blinked in surprise as she clutched her teddy bear.

It was truly the most bizarre sights of a most surreal day. One impressed observer muttered: "That's the first time I've seen a politician kiss a baby before the election begins."

9.52am: Last night's Newsnight contained some interesting observations on the Irish crisis, as my colleague Paul Owen reports:

As well as reporter David Grossman's amusing explanation of why nobody wants to buy Irish bonds (14 minutes in) – "I'll give you this piece of paper, right, and then you give me £50, now, and then in a year's time I'll meet you back here and I'll give you £55" – the programme also featured a round-table discussion with Will Hutton of the Observer, Irwin Stelzer, the American economist often seen as "Rupert Murdoch's right-hand man", and Gillian Tett of the Financial Times (18 minutes in).

Stelzer was asked if the Irish bailout would work: "It will certainly calm things down for a bit," he said. "But in the long run if you mean: 'Will it work in the sense of saving Portugal for example from a similar experience?' the answer's no."

Hutton said, however, that the bailout would "sort out" Ireland: "The money is huge. Ireland is small. Effectively the banking system is going to be quasi-nationalised and taken over by the Europeans and Ireland's going to pay a very high price."

Most interesting was presenter Jeremy Paxman's final question: will the euro survive?

Tett: "Whether it survives with all its members intact is a pretty open question."

Stelzer: "I think you're going to get a euro north and a euro south, so that the troubled periphery countries can essentially devalue and then come back in ... " For these purposes, he said, Ireland belonged in the "euro south" or "euro periphery" group.

Hutton: "If the euro breaks up that will be one of the triggers of a wider crisis ... The augers don't look good."

Photograph: Reuters 10.10am: An Irish member of the European parliament has just stormed out of a "closed door" meeting of Irish MEPs in Brussels after the EU's commissioner for monetary affairs, Olli Rehn (left), told him the content of the meeting was to remain secret. He walked out after two minutes.

"What he said was: 'I could give the party line or share the real info,'" said Socialist MEP Joe Higgins, adding that Rehn spoke with a forked tongue – one for the media and one for MEPs.

The Irish MEPs had been invited to a meeting with Rehn following growing unease about the political unrest in Ireland.

Earlier this month Rehn flew to Ireland to urge opposition parties to put national interest first and support the upcoming budget.

10.23am: Here is a video of Brian Cowen talking about the bailout and calling on TDs (MPs) to pass the budget on 7 December:

The political and financial stability of the state requires no less ... The biggest statement of confidence that can be given by this country at this time is to pass this budget. And this budget is the context in which we're having discussions to ensure that we have the necessary funding going forward.

10.48am: My colleague Owen Bowcott has written a very clear primer for those unfamiliar with the basics of Irish politics. He runs through the four main parties and ends by summarising the current political situation:

The government has relied on the backing of several independent TDs and the Green party in the Dáil. The decision of the Greens to pull out of the government after the budget precipitated this week's political crisis.

With a precarious majority in the Dáil, Cowen's government has been resisting holding a string of long overdue byelections that would have undermined its hold on office.

The first of those elections, in Donegal South-West, is taking place on Thursday and will reveal the state of the parties. Sinn Féin, which has courted the opposition vote in the border constituency, is expected to win. Fianna Fáil's support has plunged.

10.51am: Opposition parties in Ireland are trying to derail Brian Cowen's government completely by calling for an election before Christmas.

The Labour party has today joined Fine Gael in calling for a general election in the next four weeks despite immense pressure from Brussels for the four-year fiscal plan and the €6bn (£5.11bn) budget to be passed as a condition of the IMF bail out.

Health spokeswoman Jan O'Sullivan told RTE's Pat Kenny show that "there was time for an election before Christmas". She added:

If I were the IMF and I was another EU country I would far far prefer the stability of a new government than what is on offer now.

But Fianna Fáil has hit back, branding this political posturing and calling on opposition to put the national interest first. Peter Power, the overseas development minister, said:

It is impractical to contemplate. The fact that we can do four things – have a general election, negotiate a programme for government, bring in the budget, bring in the four-year plan – and do all those things in four weeks is unreasonable ... Every member of Dáil Éireann [the lower house of parliament] are going to have to reflect on this now.

11.00am: My colleague Graeme Wearden has worrying reports for Ireland – the bailout still isn't impressing the financial markets:

In the City today, investors are continuing to demand a higher return for investing in Irish debt following yesterday's drama.

The yield on Ireland's ten-year government bond jumped to 8.43% this morning, up from 7.971% – moving back to the 9% levels that sparked such panic earlier this month.

The cost of insuring Irish debt against default has also risen sharply – with the five-year credit default swap up by 26 basis points to 555bp. That's still half the level of Greece (which some analysts are convinced will default), but a sign that the financial markets are losing faith in Ireland's ability to repay its borrowings.

The political instability in Ireland helped to spark a share sell-off across Europe this morning, with the military clash between North and South Korea adding to nerves in the City. The FTSE 100 fell by 1.2% at one state, and there were similar falls in Spain, Portugal and Ireland itself – with Dublin's ISEQ index dropping by 1.9%.

11.06am: My colleague Henry McDonald is hearing that Fianna Fáil backbench anger is being directed as much at Brian Lenihan, the finance minister, as it is to the embattled Brian Cowen. This chimes with reports in today's Irish Independent, which said the "bare-knuckled fighting over the past few weeks has damaged his cause":

Party sources are furious that the finance minister had given them assurances last week not to worry about the fiscal crisis or claims that the IMF and the ECB would have to come to Ireland's rescue, one Fianna Fáil veteran said today.

Cowen's strategy meanwhile is to persuade the EU to in turn put pressure on the main opposition parties to allow the 7 December budget to pass.

One senior Fianna Fáil member told the Guardian he party was not confident that all of its TDs (MPs) will get behind the government and back the budget in the Dáil.

"If a few Fine Gael or Labour TDs go missing on the day it may pass but there are some in our own party who won't support it," he said.

The prospect of the government being unable to pass their budget would further "spook" the international bond markets, he added.

11.22am: Olli Rehn has fired a warning shot across the bows of Ireland's opposition parties, and one of the candidates in a key byelection has withdrawn, calling on voters to boycott the election.

Brussels has issued a clear warning to rowing Irish opposition parties to get behind Fianna Fáil and approve the upcoming draconian budget.

In a bid to contain the Irish disarray, Rehn, the EU's commissioner for monetary affairs, told MEPs in Strasbourg this morning that the provision of emergency aid to Ireland was "critical" for the preservation of stability in the euro area

Following the confidential meeting he said: "Every day lost increases uncertainty" and Ireland needed to get the budget "out of the way and move on".

His warning come as one of the candidates in Thursday's byelection in Donegal announced she was withdrawing. Independent candidate Ann Sweeney urged voters to "boycott" the election in protest at the Green party's decision yesterday to pull the plug on Brian Cowen's government.

11.26am: Graeme Wearden has more news from the City: banking stocks are worth buying.

The two British banks with the biggest exposure to Ireland saw their shares fall again in London this morning. Lloyds Banking Group lost 2% to 62p, while Royal Bank of Scotland dipped by 0.6% to 39.6p.

Both companies have fallen sharply since the Irish crisis blew up – RBS has lent £53bn to Irish companies and individuals, while Lloyds is on the hook for £27bn.

City analyst Arturo de Frias of Evolution Securities believes this is a great buying opportunity – unless the European single currency collapses, of course (see 9.52am). De Frias said: "If the euro is going to be abandoned, then the banking sector has to fall much more. We simply don't believe the euro can be undone without triggering a decade-long recession in Europe (again the Argentinean case comes to mind).

"But we still don't believe the European governments will let the euro collapse, and hence we reiterate our view that the sector looks extremely cheap, and also very oversold recently."

Ireland's central bank governor, Patrick Honohan, also tried to drum up interest in the Irish troubled banking sector – saying the nation's banks were all "up for sale".

"They are up for sale as far as I am concerned," Honohan said this morning. "I have been an advocate for a number of years for small countries to have foreign owners for their banks."

12.11pm: There were more minor incidents of social unrest in Ireland today.

The constituency office of one of the country's government ministers was attacked last night.

Windows were smashed at transport minister Noel Dempsey's office and the word "traitors" was sprayed on the building.

Police are investigating the attack, which is believed to have happened between 2.30am and 7.30am.

12.13pm: Here is some audio of the EU commissioner Olli Rehn on the Irish crisis and the upcoming budget vote:

Rehn has warned it is "essential" that opposition parties put electioneering behind them and pass the budget in order to get the IMF bailout Ireland so desperately needs (see 11.22am). Rehn said:

It is essential that Ireland will pass the budget in the timeline foreseen and certainly sooner rather than later because every day that is lost increases uncertainty. Let's adopt the budget, let's get it out of the way, and let's move on.

Rehn was speaking after a summit of Irish MEPs in Strasbourg this morning.

The Irish cabinet is meeting now to finally sign off on the four-year plan that forms the basis of the December budget.

Opposition parties, who smell blood, and rebel Fianna Fáil TDs (MPs) are threatening not to support it.

1.01pm: Pressure is growing on Brian Cowen to stand down as leader of the Fianna Fáil party as the cabinet meets to pass its crucial four-year economic plan.

Rebel TD (MP) Noel O'Flynn has warned that there would be a "bare-knuckle" fight within the party after Cowen's handling of the financial crisis, which has left Fianna Fáil's reputation in tatters.

He is one of a number of backbench TDs who are planning to meet tonight ahead of a parliamentary party meeting to discuss a motion of no confidence. Dublin TD Chris Andrews may also be at the meeting – he has called on Cowen to stand down "in light of developments this week".

There is now a sense of growing mutiny within the party – Cowen loyalists are insisting that he will lead the party into the next general election, but there is widespread feeling that he will have to fall on his sword.

One unnamed Cowen loyalist is quoted in the Irish Times as saying: "I just believe that for Brian Cowen the game is over, and I don't say that easily." The deputy added: "The parliamentary party will not accept going to the country with the present leadership."

The chances of Brian Lenihan becoming leader now appear to have waned. The reputation of the finance minister and one-time favourite for the post has been badly scarred by the events of last week, when the government sent out justice minister Dermot Ahern to dismiss press reports of a bailout as "fiction".

Lenihan, Ahern (probably mortally wounded by "fictiongate"), foreign affairs minister Michael Martin, transport minister Noel Dempsey and culture minister Mary Hanafin are being touted as the forerunners.

Hanafin was first out of the traps. She has already indicated she would put her name forward "if the leadership became available".

Scenting blood, opposition parties are calling for a snap general election and are refusing to be slapped down by Brussels, which is watching the political disarray with horror.

1.07pm: Here is a lunchtime summary:

• Olli Rehn, the EU commissioner for monetary affairs, has warned dissenting opposition parties Fine Gael and Labour they need to put politics aside and support the government's four-year economic plan and the budget in exchange for the IMF bailout (see 11.22am). Rehn said:

It is essential that Ireland will pass the budget in the timeline foreseen and certainly sooner rather than later because every day that is lost increases uncertainty. Let's adopt the budget, let's get it out of the way, and let's move on.

Irish Times columnist Fintan O'Toole said the difference between "farce and tragedy" in Ireland was now "indistinguishable".

• Anger continues over the Green party's decision to pull out of the government and call for a January election. An independent TD in Thursday's Donegal byelection announced on local radio today she was withdrawing from the race and called on voters to "boycott" the election in protest against the Greens' supposed treachery (see 11.22am).

• The Labour party and Fine Gael are calling for an election in the next four weeks (see 10.51am). A minister has called this "impractical". Pressure is growing on Brian Cowen to stand down (see 1.01pm).

• The two British banks with the biggest exposure to Ireland saw their shares fall again in London this morning (see 11.26am).

• There is growing concern that the euro is now under serious threat and some predictions that peripheral countries such as Ireland may be able to withdraw, devalue and then return at a later date (see 9.52am).

1.22pm: Here's more from rebel Fianna Fáil TD (MP) Noel O'Flynn:

There are no excuses acceptable to me for your government being in denial all of last week. I feel betrayed and humiliated as do my own supporters and citizens of the state by you, taoiseach, as leader of the state. The public are living in fear of the unknown; they are deeply disappointed, angry and fearful of the future for themselves and their families.

1.22pm: On his way into the cabinet meeting today, Brian Lenihan, the finance minister, reiterated his party's commitment to tough it out:

We need to pass this budget. We need to publish our plan tomorrow, which we will be doing; the plan has been finalised, the budget will be introduced, and the necessary funding for the budget will be obtained. They are the priorities for this country at present.

A glazier works on the damage to Fianna Fail transport minister Noel Dempsey TD's constituency office in Trim, Meath, today. The word 'Traitors' was sprayed on it overnight. Photograph: Julien Behal/PA 1.37pm: First pictures of the vandalisation of minister Noel Dempsey's constituency home have emerged – screenshots can be seen here.

The damage is quite a spectacle.

Patrick Honohan, the governor of the central bank, has quipped that the Irish banks are for sale. It's the second time he has indicated this; two weeks ago he said he would welcome Chinese owners in response to a question from the Financial Times's Gillian Tett.

Local wags reckon it would be great news – because it would mean the banks would actually be open for business early morning and on Saturdays. Banks in Ireland don't open until 10am.

2.45pm: And here's an update on the Irish banking sector:

Irish bank shares fell again today 24 hours after the government announced restructuring was on the way and the governor of the central bank confirming the Irish banks are "for sale".

Shares in 36%-state owned Bank of Ireland fell 23% to 30c giving it a market capitalisation of around €1.77bn (£1.5bn), half what it was a month ago. Allied Irish Banks, whose government ownership will rise to around 95% after a planned rights issue, traded down 13% to 35c.

Irish Life & Permanent, the only Irish-owned bank to so far not have received any state aid, fell 4.5% to €0.80, following a 27% drop yesterday.

"The market is on its way to deciding there is no equity left in the banks," said Gary McCarthy, head of Quest, the quantitative research unit of broker Collins Stewart.

He said "the best thing could be to remove one big bank, such as AIB, from the state balance sheet".

2.53pm: My colleague Graeme Wearden sends this from the business desk:

Spain and Portugal came under more pressure from the financial markets today, despite the EU's best efforts to prevent the contagion spreading from Dublin and Athens.

The difference between the yield (or rate of return) on Spanish 10-year government debt and the German equivalent hit its highest level since the euro was created – rising to 233 basis points. That's a sign that Spanish debt is seen as a riskier bet. The spread between 10-year Portuguese and German debt also widened, to 444 basis points, as traders paid little heed to the words of the EU president, Herman Van Rompuy.

Van Rompuy insisted today that Portugal (seen as the next weak link in the eurozone chain) did not need financial help, pointing out that it had not experienced a Irish-style housing boom.

But Jim O'Neill, Goldman Sachs' highly regarded chairman of Asset Management, warned that Spain and Portugal were lurking in the background of the current crisis. O'Neill warned that the rescue package being created for Ireland is flawed because it does not fix the problems at the heart of the single currency.

"Unless there's an underlying solution to not just the debt challenge, but also to ... how European monetary union sits together involving all these domestic political partners, how can we forget about the problems lurking with Portugal and Spain," O'Neill said on Bloomberg TV this morning.

Photograph: Julien Behal/PA 2.56pm: A bit of a sideshow going on here on RTE's ever-popular phone-in with Joe Duffy.

Green TD Paul Gogarty is being mauled for taking his 18-month-old daughter Daisy (left) into the bombshell press conference yesterday at which the party called for a general election (see 9.12am).

He said he had behaved entirely "professional" and had been unable to get childcare for his daughter for the 25-minute press conference.

He said the conference was called at short notice and his normal childcare arrangements weren't available, adding:

If I wanted to show her off the telly there were plenty of other opportunities.

My child was more comfortable sitting on my knee and I wanted to show solidarity with my leader John Gormley.

I would rather my child be comfortable sitting on my knee than be uncomfortable. I had to be there. There was an important message to send.

But listeners were having none of it. Paul Carroll fumed: "For him to think it's acceptable to come into an international media conference with a young child on his lap ... "

Carroll said if he had brought a child into an important presentation he probably would lose the business.

Gogarty says he worked seven days a week and was just stuck without childcare. "give me four out of 10 for politics but 10 out of 10 for being a father."

He said he didn't parade his child in front of the media normally and didn't use his family in promotional literature.

EU flags reflected in glass walls of EU headquarters in Brussels. Photograph: Dominique Faget/AFP/Getty Images 3.05pm: My colleague Ian Traynor sends this from Brussels, which he says has gone strangely silent on the Irish and the euro, perhaps because many of the top people involved are out of town.

Olli Rehn, the key European commissioner dealing with the crisis, has been five hours down the road in Strasbourg, where the European parliament is sitting, along with another central figure, Jean-Claude Trichet, the head of the European central bank.

In Dublin a couple of weeks ago, Rehn took time to try to cultivate opposition MPs in the Dáil. In retrospect, given the madness of the past 48 hours, Rehn may have been on to something first – that the Cowen government would be on its last legs as soon as the bailout went public and that opposition tolerance would be needed to get Brian Lenihan's crucial budget through.

Rehn was at it again in Strasbourg today, trying to soothe Irish MEPs of all political stripes.

But perhaps we should be thankful for the peace and quiet in Brussels since feet in mouth have been a recurring problem when the eurocrats and the politicians seek to out-argue the markets.

Luke Baker at Reuters Brussels bureau has been highlighting the politicians' hamfisted attempts to talk their way out of trouble today. Joshua Chaffin at the FT in Brussels also pointed up the problem last week.

Rehn lamented the problems of "communicating properly" on the crisis, voicing muted exasperation with the blunders of his superiors.

Chief among these is Herman Van Rompuy, the president of the European council, who last week made a bad situation worse by observing that the EU was fighting for its survival. He might have succeeded in getting his name in the papers, but for all the wrong reasons.

A few days before that in a speech in Berlin, he drew an asinine connection between Euroscepticism and war, suggesting that anyone but a true believer in the "European project" was a troublemaker.

Van Rompuy has been in Stockholm today where the Swedes, like the Brits outside the euro but unlike the Brits eschewing any Schadenfreude at the euro's travails, are keen to help the Irish, to help the euro, and will take part in the bailout.

Van Rompuy kept his feet strictly out of his mouth, sticking to the bland formulation: "We look forward to the rapid conclusion of the ongoing negotiations for a programme."

Photograph: Paul Owen 4.02pm: So as Ian says Europe is strangely silent. What about this grim assessment I've just spotted deep in one of Landon Thomas Jr's pieces in the New York Times?

"It will be the same story with all these countries [Spain, Portugal] — Ireland is just ahead of the game," said Desmond Lachman, a former policy executive from the International Monetary Fund who is now with the American Enterprise Institute in Washington. "They all have a fixed exchange rate and have to make these massive adjustments, so people are asking whether they are on the right path."

4.13pm: Expecting the taoiseach to announce the cabinet has agreed the four-year plan within the next half hour.

Brian Cowen has been taking regular questions in the Dáil and will return shortly to take more questions on the financial crisis. We'll keep you posted.

4.22pm: Cowen has arrived in the house.

4.22pm: Fine Gael leader Enda Kenny is addressing the house. He says people have watched in horror as the IMF, ECB and EU have arrived in Dublin and within three days the government has asked for a formal bailout. And there is "an ongoing attempt to cling to power at all costs", he says. People need confidence and stability, he adds.

4.24pm: Kenny says:

There are two dates that are within your grasp that can restore stability and confidence. The first is the budget ... Tomorrow the four-year fiscal plan will be announced. What I want to do know in the interests of certainty and confidence will you tell the Dáil now that you'll bring forward the budget for next week?

Kenny says he will facilitate bringing forward the budget.

4.25pm: Brian Cowen says he is not trying to cling to power. He says it is "very important that we proceed with the budget as we have set out and that timeline has been agreed with the commissioner when he came here".

Cowen, who appears serene but may simply be worn down by the events of the last two weeks, is now defending his government's denial that a bailout preparation was under way 10 days ago.

4.31pm: Enda Kenny now notices the absence of the Green party and asks the taoiseach whether "they've been sacked or about to be sacked". He reiterates his offer to facilitate the sitting of the house outside normal Dáil hours to facilitate a budget next week.

4.34pm: Cowen is on his feet again. He says he can't bring forward the budget until the tax take for November is in at the end of next week. (November is a big tax month.)

4.36pm: Is this a different Brian Cowen in the house today? Gone is the angry, defensive taoiseach, replaced by a conciliatory, calm Cowen. "I'm not questioning your attempt to be constructive or your offer to be constructive," he says gently to Kenny, the Fine Gael leader.

4.42pm: Enda Kenny holds a clenched hand to his mouth and looks impatient as Cowen reiterates that the four-year plan and the budget are part of the process of achieving the bailout.

"It is a matter of responsibility for us all whether this budget goes through or not," says Cowen.

4.44pm: Labour leader Eamon Gilmore is anxious to nail Cowen on his election timetable. He is concerned that the budgetary process won't be finished until March and an election won't be held till April. The budgetary process isn't completed until the finance bill is passed by the Dáil.

4.47pm: So if it's Cowen's timetable, there won't be an election until the end of February or March. That's because the taoiseach says he hopes it would be February when the budgetary process will be completed.

That's it for leaders' questions today.

So the general election may not be held until February or March.

5.00pm: The Press Association news agency has just filed a story on the debate in the Dáil. Here's the top of it:

Irish taoiseach Brian Cowen tonight denied he was clinging to power as the opposition directly demanded he bring forward next month's budget.

Under enormous pressure from within the parliament and his own party to resign, a subdued Cowen dismissed calls to revise a timetable to strike a deal on the €90bn (£76.1bn) bailout from the International Monetary Fund (IMF) and Europe.

"There is no question, the characterisation of clinging to office, being my motivation. That is not my motivation," the taoiseach told the Dáil (parliament).

"My sole motivation is to ensure that the four-year plan is published, as agreed with the people with whom we are dealing, and that a budget is passed by the house, put to the house."

The four-year plan setting out €15bn savings will be published tomorrow afternoon in Dublin.

5.05pm: Bloomberg news agency is reporting alarming comments from Mohamed A El-Erian of Pacific Investment Management Co (Pimco). According to the financial news agency, El-Erian said:

What you advise your sister in Ireland now is that you'd say take your money out of an Irish bank and put it in another bank headquartered elsewhere. That's what happened in Argentina and in emerging economies. People worry about their savings.

5.11pm: The euro dropped to a two-month low against sterling today, presumably due to fears that the eurozone's debt crisis could spread further afield from Ireland. Reuters news agency is reporting:

The euro fell 1% on the day against sterling to a low of 84.46p, its weakest since late September, having earlier dropped below its 100-day moving average around 84.70p.

It started the day at 86.25p.

5.19pm: My colleague Henry McDonald is already writing Brian Cowen's political obituary:

His long career in politics, which reached its zenith when he succeeded Bertie Ahern as taoiseach, is going to end in ignominious failure. He will go down in history as the premier whose government had to go with begging bowl in hand to the international community for an emergency dig-out. He is also going to held responsible for perhaps the greatest defeat to be sustained by Fianna Fáil in its long history.

His defenders will say that Cowen is an intelligent man with a grasp of economics and business. And that he is only pushing the country's four-year economic plan and the forthcoming cost-cutting budget forward in the national interest. What they tend to forget is that during the years of the fake boom he was in charge of the country's finances and failed to heed the warnings from various economists and opposition politicians that it was all built on shifting sands.

Whether Cowen is felled in an internal party coup before the budget or limps on as a lame-duck leader until Fianna Fáil's inevitable defeat in a new year election, the 50-year-old former Gaelic football player can comfort himself with one thought. That those who will replace him in Fine Gael and Labour will have to carry out the same round of brutal cost-cutting in terms of jobs, wages and services in order to keep the IMF and the ECB happy.

5.22pm: In this special edition of the Guardian's Business podcast, our experts examine how Ireland's once booming economy has come to this humiliating pass.

5.37pm: My colleague Ian Traynor has sent some more from Brussels:

In the Bundestag in Berlin, Germany's formidable finance minister, Wolfgang Schaeuble, has just been steering his budget for next year through (it passed). Hard times mean hard decisions, he argued, putting deficit reduction (€80bn in spending cuts over the next four years) at the heart of the Merkel government's policy.

Pre-empting or trying to stifle the grumbling about Germany having to dig deep to help Ireland at a time of budget cuts (if it's €90bn for Dublin, Germany could face a bill of €25bn), Schaeuble pledged that Berlin had no option but to accept "its responsibility."

He appeared to be buttering up the tabloids, the TV, and public opinion for the inevitable.

"Our common currency is at stake," Schaeuble warned. "Ireland's request to come under Europe's rescue shield shows that this financial and economic crisis is still having an impact and that we have to continue to do everything to get on top of it."

Before Ireland was rescued, the European Commission, the European Central Bank and the IMF would need to rule that the situation in Ireland could destabilise the entire eurozone.

"We have to take on our responsibility. The consequences would be incalculable."

As for Germany's own fiscal and budget situation, the envy of most in Europe, Schaeuble was stern: "We're not swimming in money, but we're drowning in debt."

5.39pm: Here is an evening summary:

• Attempts to force a snap general election in Ireland appear to have failed today with taoiseach Brian Cowen indicating he won't be going to the polls until February at the earliest (see 4.47pm).

The taoiseach denied accusations by opposition leader Enda Kenny of Fine Gael that he was trying "to cling to power", rejected a bid to have the budget brought forward to next week and said the long-awaited four year fiscal plan for the country would be published tomorrow.

"My sole motivation is that the four-year plan is published and a budget is passed by the house," he said.

Under persistent questioning by Labour leader Eamon Gilmore in the Dáil, he conceded the election couldn't happen until February, or possibly April, because of the length of time it takes for legislation associated with the budget to be passed.

• Feuding opposition parties were warned by EU commissioner Olli Rehn that the passing of the four-year plan and the budget were a critical part of the process of getting a bail out from the International Monetary Fund (see 11.22am).

• However, Cowen's leadership remains in the balance with continued unrest on the backbenches. A handful of TDs are meeting tonight ahead of a parliamentary party meeting to discuss the possibility of a vote of no confidence. Cork TD Noel O'Keefe, who is leading the dissidents, warned of a "bare-knuckle affair" at tonight's meeting (see 1.01pm).

• The political turbulence in Ireland and elsewhere continued to infect the already-jittery markets (see 5.05pm).

One of the world's biggest bond dealers and former deputy director of the IMF said there could be a run on Irish banks. And he predicted ordinary deposit holders would take flight soon.

"What you advise your sister in Ireland now is that you'd say take your money out of an Irish bank and put it in another bank headquartered elsewhere," said Pacific Investment Management Co (Pimco)'s Mohamed A El-Elrian. "That's what happened in Argentina and in emerging countries. People worry about their savings."

"The numbers so far have shown that the Irish banking system has been bleeding deposits," he told Bloomberg Radio. "It will seriously undermine the prosperity of this country for a generation. The first thing they must do is execute on what they announced this weekend – which is a big external aid package and steps by the Irish government."

• Bank shares in Ireland tumbled today with AIB and Bank of Ireland taking significant hits.

Although some calm appeared to be restored to the political stage this afternoon, the country remains on a knife-edge.

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