EUROPE's bank chief yesterday warned Fine Gael and Labour -- set to be the next coalition partners -- there will be no renegotiation of the IMF-EU bailout deal.
European Central Bank President Jean Claude Trichet shot down suggestions a new Government would get a better deal on Ireland's bailout, insisting it was "absolutely essential" that Ireland sticks to the agreed plan.
But Fine Gael and Labour both insisted last night that the interest rate was not a decision for the ECB as it's a matter for the EU's political leaders.
Mr Trichet's comments came as the prospective coalition partners try to convince voters they can get a better deal on the €85bn bailout agreed with the ECB, the European Commission (EC) and the International Monetary Fund (IMF).
But the ECB chief has ruled out any changes to the €85bn bailout deal provided to the State, which has a crippling 5.8pc interest rate.
The development also came as Taoiseach Brian Cowen travels to Brussels today for a crucial meeting of all EU leaders to discuss possible changes to how the EU helps and funds member states in financial difficulties.
The final decision could be made at another summit of the European Council on March 24-25. Fine Gael and Labour indicated they will attempt to negotiate better terms for Ireland if they are in office by then as they unveiled their economic plans yesterday.
Labour leader Eamon Gilmore warned of the nightmare scenario that will devastate the country if the next government is unable to renegotiate the IMF-EU deal.
"The deal that Fianna Fail struck with the EU and IMF which ties the hands of any future government will cripple the Irish economy. We will find ourselves in 2014 with people having to pay more taxes, more cuts in services, higher unemployment and we won't have recovery," he warned.
Mr Gilmore was asked what would happen if the EU refused.
"We are confident that we can renegotiate it because the current deal is not going to work," he said.
He said that it was not possible to get an outcome unless his party could go to the table with some authority.
"That's why it is so important that the Irish people give us a mandate. It's either 'Frankfurt's way or Labour's way'," he said.
But in the ECB's headquarters in Frankfurt yesterday, Mr Trichet dismissed suggestions a new Government could get a better deal on Ireland's bailout.
"Let me only say, there is only one of us [in the eurozone] that has a medium term plan approved by the international community. The implementation of that plan is absolutely essential for Ireland ... for the credibility of the country," he said.
Finance Minister Brian Lenihan yesterday cast doubt on the ability of Fine Gael and Labour to renegotiate the bailout deal. He said they had demonstrated an "unwillingness to deal with realities".
Fine Gael and Labour both pointed out the interest rate was a political issue for EU leaders -- and Mr Trichet is not a political leader.
"At the end of the day, it's the European Council will make a decision on the interest rate. But we remain committed to getting a lower interest rate and fairer deal on the bailout," a Fine Gael spokesman said.