IRELAND'S "social stability" will fragment into Greek-style street protests if the Government fails to get tough with Europe on the €64bn bank debt, Taoiseach Enda Kenny has been warned.
Opposition leader Micheal Martin, along with a senior Fine Gael minister, warned Mr Kenny that middle Ireland is at the brink and needs to "see light at the end of the tunnel.
"If we bring middle Ireland onto the streets then it will be 'Goodbye Fine Gael'," the Minister said.
Banking expert and Fine Gael TD Peter Mathews yesterday said Mr Kenny's and Mr Noonan's overselling of the June 29 summit compared to Neville Chamberlain's appeasement policy before World the Second World War.
He said: " Chamberlain innocently sold his people, a pup rather than face the stark reality in front of them. It is the same here now."
Mr Kenny was"sucker-punched" by German Chancellor Angela Merkel, who on Friday insisted that there would be no bailout of legacy bank debt, says TD Stephen Donnelly in today's Sunday Independent.
As Government 'spin' went into overdrive in the past 48 hours, insisting that Ireland's debt plea is still alive, business leaders, leading economists, opposition TDs and even members of the Government showed a sustained unity of purpose.
They called on Mr Kenny to abandon the current "inept strategy" of talking up Ireland to our European partners.
And as Ms Merkel firmly shut the door on using the new EU bailout fund for a backdated injection of funds into banks, they described as "naive, wishful thinking" Mr Kenny's assertion that the June 29 statement represented a "seismic shift". They also dismissed Tanaiste Eamon Gilmore's talk of it being a "game-changer".
Following frantic calls from Mr Kenny's office on Friday, a statement was released yesterday from Ms Merkel's office, which reaffirmed its "support" for Ireland.
Leading economist Colm McCarthy described the statement as "crying out to be ignored".
This, however, was immediately dismissed as a sop by the opposition.
Yesterday, opposition leader Mr Martin said Mr Kenny should seek an immediate meeting with Mrs Merkel and "lay it on the line" that Ireland has a case.
Mr Martin also warned of unrest if a deal is not struck.
"The social solidarity which has characterised the Irish response to the crisis will not last if we do not see any light at the end of the tunnel," he said.
Mr McGrath said: "They need to stop saying everything is fine, when in truth things are extremely grim.
"They have been giving a false impression of how good things are to our European partners and that has to stop."
One senior Fine Gael minister said that unless a bank deal is secured, middle Ireland could be forced on to the streets in protest.
"The people are sick of austerity and not fit for it anymore. The people who are suffering are the people of middle Ireland. They want to see some light at the end of the tunnel," the minister said.
The minster also warned that if Ireland does not obtain a deal, the consequences for Fine Gael could be disastrous.
"If we bring middle Ireland on to the streets then it will be goodbye Fine Gael. We will go the same way as Fianna Fail".
The Fine Gael TD Peter Mathews said Ireland should stop trying to be the best boy in the class and called on his own leadership to play hard ball, including by refusing to pay the remaining €36bn to bank bondholders.
"We must claim an inability to pay. By being the good boys in the class, we are being lost in the melee.
"We must shout through our megaphones and get a deal on our debt," he said.
Mr Mathews also lashed out at Angela Merkel and her finance minister Wolfgang Shauble -- who he described as "brain dead" -- for placing the interests of Germany ahead of Europe.
Using the historical analogy once more he said: "Chamberlain naively gave his nation false hope in 1939, he didn't want to face the reality of going to war.
"It is the same here, they don't want to face the reality that the situation is very, very serious."
There is now acceptance within the Government that we will not receive any writedown of the €32bn of taxpayers money sunk into the former Anglo Irish Bank. But ministers are clinging to the hope of getting a deal on the other €32bn given to the 'pillar banks' of AIB and Bank of Ireland.
Separately, it is hoped that Ireland can abandon the controversial annual €3.1bn promissory-note arrangement for a longer-term bond. However, the agreement of the European Central Bank (ECB) has yet to be secured.
Writing in today's Sunday Independent TD Stephen Donnelly said Mrs Merkel's comments on Friday represented a "sucker punch" to Enda Kenny, while UCD economist Colm McCarthy writes that Ireland's best case for debt relief is to plead an "inability to pay".
"The insistence that things are going fine, budget adjustments are on schedule ... is a servable domestic political message. But it is also an open invitation to our European 'partners' to offer no assistance whatsoever outside the terms already agreed," Mr McCarthy asserts.
Publicly yesterday, several government ministers sought to insist the deal of June 29 still stands and that Ireland's debt-reduction campaign remains on track.
Social Protection Minister Joan Burton claimed that there remained a recognition in the EU that the Irish demand is fundamentally legitimate.
However, business leaders have reacted with anger and disappointment. Dave Fitzsimons, head of Retail Excellence Ireland said: "If we can't negotiate the bank debt, it is likely that we will remain in recession for the next decade or more."