By Andras Gergely
DUBLIN (Reuters) - Brian Cowen becomes Irish prime ministeron Wednesday in a planned transition of power but will need hisacknowledged discipline as policymaker to manage a weakeningeconomy and a challenging EU referendum campaign.
Bertie Ahern, who stepped down on Tuesday after acorruption investigation began to overshadow his government'swork, leaves as his legacy one of Europe's richest countriesand a peaceful Northern Ireland next door.
After a decade of construction-fuelled expansion, however,Ireland now faces much slower growth or economic contraction.
"The Strife of Brian," was how the Irish Examiner newspapercharacterised what lies ahead in a frontpage headline playingon a film title, adding that his in-tray was "stacked withproblems that would shorten any honeymoon".
Analysts hope Cowen will build on his track record asAhern's prudent finance minister and not overspend or agree toinflationary wage rises, which would hurt the competitivenessof exports and might tip Ireland into a recession.
Ireland's economic health remains enviable by moststandards, but falling consumer spending and house prices areworrying signs in a small, open economy that is more exposedthan many to a global economic slowdown.
Recent data show the economy has deteriorated sharply evencompared to early April when Ahern announced his departure,said Alan McQuaid, chief economist at Bloxham stockbrokers.
"It's a hard landing whichever way you look at it," McQuaidsaid, adding that Cowen, a tough fighter, was the right choiceas prime minister in that environment.
THE BIG LISBON MATCH
Cowen will also need to convince Irish voters to supportthe European Union's "Lisbon" reform treaty on June 12, in theonly referendum planned on the issue among 27 member states. Arecent poll showed most voters do not understand the treaty.
A cartoon in this weekend's Sunday Business Post newspaperlikened Cowen's position to that of Giovanni Trapattoni, thestar Italian coach hired recently to get the Republic ofIreland into the 2010 World Cup finals after missing out onEuro 2008.
"How do you fancy our chances in the big Lisbon match?," areporter asks Cowen in the cartoon.
"No bother. If we don't get a result in June ... we'llreplay in November," Cowen replies in an apparent reference to2001-2002, when Ireland staged an embarrassing repeat of areferendum on the Nice Treaty on EU enlargement to turn a first"No" vote into a "Yes".
Cowen, already elected leader of the main governing partyFianna Fail, is expected to be confirmed by fellow deputies asprime minister around 1330 GMT (2:30 p.m. British time) and tounveil his new cabinet later in the day.
Irish media named Enterprise and Trade Minister MichealMartin as favourite to become finance minister but bookmakerPaddy Power saw Foreign Minister Dermot Ahern as more likely.
Wednesday's newspapers said Cowen may have more room toreshuffle his cabinet to his liking after the resignation ofArts, Sports and Tourism Minister Seamus Brennan on Tuesday forhealth reasons.
(edited by Richard Meares)
