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1 February 2011
Last updated at 10:14 ET
The Irish Prime Minister, Brian Cowen, has announced that parliament is being dissolved, to allow for the first election since the bail-out.
Mr Cowen, who is not standing for re-election, told the Dail he hoped to see the next parliament meeting on 9 March.
The forthcoming election, he said, would define the Irish Republic's future.
Mr Cowen agreed to the early vote after a series of political setbacks including a vote of confidence.
He is expected to announce the election date formally after seeing Irish President Mary McAleese later on Tuesday.
The Minister for the Environment, Eamon O Cuiv, said earlier that 25 February was the most likely date for the general election.
The Irish Republic was forced to accept an 85bn euro ($113bn; £72bn) bail-out, with an interest rate of 5.8%, from the EU and IMF in November last year.
Once known as the Celtic Tiger for its strong economic growth, the Republic had ridden high on a property bubble.
But when property prices crashed, the economy slumped and several banks were left needing huge state hand-outs.
Analysts expect Mr Cowen's Fianna Fail party to suffer a crushing defeat at the election, as voters blame them for mismanaging the economy.
Nineteen Fianna Fail members of the Dail (TDs) and four ministers are standing down from national politics on Tuesday.
Opposition pledge Addressing the Dail, Mr Cowen said his government had had to take unpopular decisions but he had always been loyal to his country.
"This election will define our economic future and it will decide whether Ireland moves forward from this recession or whether we prolong it or indeed succumb to it," he said.
The centre-right Fine Gael party and centre-left Labour Party are favourites to take over with both determined to renegotiate elements of the bail-out.
Fine Gael leader Enda Kenny paid tribute to the outgoing prime minister, saying that while he had disagreed with many of his policies, he had had no doubts about his personal integrity.
The opposition leader told the Dail his party meant to "rebuild the country".
"We will make Ireland the best small country in the world in which to do business," he declared.
Mr Kenny, who had talks with European Commission President Jose Manuel Barroso in Brussels on Friday, has described the bail-out's 5.8% interest rate as "penal".
"I'm confident that this can and will be renegotiated," he said in an interview earlier on Tuesday.
"We will renegotiate it on the basis of accepting the [deficit] reduction to 3% [of GDP] by 2014/2015 and my focus is on the level of interest rate and the failed banking structure at its heart."
'Proud and grateful' There was surprise in Dublin when Mr Cowen announced he would not be fighting the election, the BBC's Mark Simpson reports.
It is the first time in Ireland's history that a serving prime minister has not contested a subsequent general election.
Mr Cowen has stepped down as Fianna Fail leader but says he will continue as taoiseach (prime minister) during the election campaign.
Former Foreign Minister Micheal Martin has been elected as the new leader of the party.
Mr Cowen said his party faced new challenges and would face them with "a new leader and a new team".
"I am proud and grateful to have served with each and every one of my party colleagues," he said.
"I pledge them my full support and wish them well."
Mr Cowen was first elected to the Dail in the Laois-Offaly by-election of 1984, caused by the death of his father.
Tuesday is his last day as a member of the Dail.
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Mr Cowen, who is not standing for re-election, told the Dail he hoped to see the next parliament meeting on 9 March.
The forthcoming election, he said, would define the Irish Republic's future.
Mr Cowen agreed to the early vote after a series of political setbacks including a vote of confidence.
He is expected to announce the election date formally after seeing Irish President Mary McAleese later on Tuesday.
The Minister for the Environment, Eamon O Cuiv, said earlier that 25 February was the most likely date for the general election.
The Irish Republic was forced to accept an 85bn euro ($113bn; £72bn) bail-out, with an interest rate of 5.8%, from the EU and IMF in November last year.
Once known as the Celtic Tiger for its strong economic growth, the Republic had ridden high on a property bubble.
But when property prices crashed, the economy slumped and several banks were left needing huge state hand-outs.
Analysts expect Mr Cowen's Fianna Fail party to suffer a crushing defeat at the election, as voters blame them for mismanaging the economy.
Nineteen Fianna Fail members of the Dail (TDs) and four ministers are standing down from national politics on Tuesday.
Opposition pledge Addressing the Dail, Mr Cowen said his government had had to take unpopular decisions but he had always been loyal to his country.
"This election will define our economic future and it will decide whether Ireland moves forward from this recession or whether we prolong it or indeed succumb to it," he said.
The centre-right Fine Gael party and centre-left Labour Party are favourites to take over with both determined to renegotiate elements of the bail-out.
Fine Gael leader Enda Kenny paid tribute to the outgoing prime minister, saying that while he had disagreed with many of his policies, he had had no doubts about his personal integrity.
The opposition leader told the Dail his party meant to "rebuild the country".
"We will make Ireland the best small country in the world in which to do business," he declared.
Mr Kenny, who had talks with European Commission President Jose Manuel Barroso in Brussels on Friday, has described the bail-out's 5.8% interest rate as "penal".
"I'm confident that this can and will be renegotiated," he said in an interview earlier on Tuesday.
"We will renegotiate it on the basis of accepting the [deficit] reduction to 3% [of GDP] by 2014/2015 and my focus is on the level of interest rate and the failed banking structure at its heart."
'Proud and grateful' There was surprise in Dublin when Mr Cowen announced he would not be fighting the election, the BBC's Mark Simpson reports.
It is the first time in Ireland's history that a serving prime minister has not contested a subsequent general election.
Mr Cowen has stepped down as Fianna Fail leader but says he will continue as taoiseach (prime minister) during the election campaign.
Former Foreign Minister Micheal Martin has been elected as the new leader of the party.
Mr Cowen said his party faced new challenges and would face them with "a new leader and a new team".
"I am proud and grateful to have served with each and every one of my party colleagues," he said.
"I pledge them my full support and wish them well."
Mr Cowen was first elected to the Dail in the Laois-Offaly by-election of 1984, caused by the death of his father.
Tuesday is his last day as a member of the Dail.
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