Greece's debt battle stirs austerity row in bailout poster-child Ireland

By William James and Conor Humphries DUBLIN (Reuters) - Greece's bailout battle with Germany is casting a long shadow in Ireland, dividing political and public opinion over whether Dublin should stand alongside Athens as a fellow bailout recipient or push to ensure the Greeks don't get an easy ride. Greece is expected to feature heavily in an upcoming Irish general election with the centre-right ruling party Fine Gael already pointing to Greek woes to show it was right to ignore calls to take a confrontational style with its EU-IMF creditors. Finance Minister Michael Noonan's careful back-room diplomacy helped secured improved bailout terms and set the stage for a stunning recovery, but did not result in a debt write-down and most bondholders in failed banks were repaid. When Noonan was reported to have been one of the harshest critics of Greece in talks this week, the opposition quickly accused it of siding with the country's former EU-IMF tormentors to make sure Greece didn't get a better deal. Spain and Portugal, other recipients of bailouts in the past few years, have also taken a tough line. A banner headline across Ireland's best selling daily declared "Noonan backs Germans in Greek cash standoff." He denied the report in parliament, saying he had great sympathy for Greece and that reports to the contrary were based on "leaks, supposition and spin." Critics reminded him of the anger sparked in Greece when in 2012 he said Ireland's economic links to the country didn't go far beyond holidays and buying feta cheese in the supermarket. "It shows them to be brutal and mean to a government in a similar enough situation to the way Ireland would have been a number of years ago," said Paul Murphy of the hard-left Anti-Austerity Alliance, which has three seats in the 166-seat parliament. Despite the geographical vicinity with southern European neighbour Greece, Spain and Portugal have also been among the hardliners in the bailout negotiations. Both countries have conservative administrations, which chafe at the leftist ideals of Greece’s Syriza party. Moreover, the populations of Spain and Portugal have both suffered through painful cost-cutting and tax hikes over the past several years, as they have swallowed the austerity measures imposed on them in exchange for European aid. Portugal exited a three-year 78 billion euro bailout last year, and Spain got financial aid for its banks in 2012. "PR DISASTER" Greece's Finance Minister Yanis Varoufakis has twice this week appealed directly to Irish voters to support the Greek people, penning an opinion piece and giving a prime time radio interview. On Thursday, Prime Minister Enda Kenny ruled out a debt write-off for Greece and suggested Athens follow Ireland's example by focusing on pro-growth measures. Deputy Prime Minister Joan Burton accused the Greek government of "lecturing" Europe. It would be "a PR disaster if Ireland can be associated with being on the side of Germany now and sidling up with [German Finance Minister Wolfgang] Schaeuble," said Eoin O'Malley, politics lecturer at Dublin City University. Recent opinion polls show Prime Minister Enda Kenny's Fine Gael is likely to be the largest party at the election, which is due before April, but that it would struggle to form a majority with its current partner, centre-left Labour. Fine Gael's traditional rival, centre-right Fianna Fail, and left wing populists Sinn Fein are set to attack in a bid to secure second place and a possible place in the next government, almost certainly a coalition. Fine Gael is banking on the surging recovery from its 2010 bailout to win votes after it posted the fastest economic growth in Europe last year. But left-wing accusations that it was siding with the business elite and targeted most of its austerity measures at the poor fuelled mass protests earlier this year in which demonstrators demanding solidarity with Greece waved Greek flags. An informal poll of half a dozen people on the streets of Dublin, underlined the division in the electorate over Greece: half approved of Noonan's hard line and half opposed. "We had to face all that (austerity), why shouldn't they have to?" said a worker in Dublin's financial district, who declined to give his name on the grounds that he didn't want to upset his Greek neighbours. (Editing by Anna Willard)