Already the most unpopular Irish leader in modern history, Cowen’s currency has been further devalued by revelations this week that taxpayers will have to foot a bill of up to 50 billion euros for cleaning up years of reckless lending during the “Celtic Tiger” era.

An Irish Times/Ipsos MRBI poll on Friday showed 61 percent of voters think Cowen should resign before elections which are due in 2012 but likely to be held before then.

Ireland officially exited two years of recession in the first quarter of 2010 before shrinking again in the following three months. Friday’s PMI data suggested the third quarter did not look much better.

The NCB Purchasing Managers’ Index, which measures the Irish manufacturing sector, fell sharply to 48.4 from 51.1 in August, dipping below the 50 mark separating growth from contraction for the first time since February.

Separate data showed retail sales rose 1.3 percent in August from a year ago. However, after stripping out volatile car sales the sales volume was 1.4 percent lower than in August 2009.

“If PMIs are weakening elsewhere, they are going to weaken in Ireland as well so we could see growth weaken again in Q4. What we are seeing here is an uneven recovery of activity,” said Oliver Mangan, chief bond economist, at AIB.

Cowen must unveil a four-year budget plan next month and push through a tougher 2011 budget than the 3 billion euros of adjustments originally planned to reassure investors Ireland will not need external assistance to see it through its crisis.

Only a growing economy will generate the tax revenues Ireland needs, alongside spending cuts and tax hikes, to reduce a debt mountain that the bank bailout will swell to 99 percent of GDP this year from 25 percent prior to the crisis.

The bank rescue will also blow the budget deficit out to a one-off 32 percent of economic output this year, more than 10 times the EU’s 3 percent cap and by far the worst in the union.

So far Ireland has managed to calm investor fears it will go the way of Greece, which suffered a debt meltdown that forced it to turn to its European Union partners and the International Monetary Fund for help.

IMF chief Dominique Strauss-Kahn said in a German newspaper he does not expect the euro rescue fund to be activated for Ireland, adding his voice to a clutch of policymakers who made the same prediction the previous day.

But data from Spain also heaped more pressure on lagging economies on the euro zone’s periphery on Friday, as manufacturing activity there also shrank for the first time in seven months, a day after unveiled it an austerity-driven 2011 budget.

Ireland’s national debt agency said there was no impending liquidity crisis, canceling all bond auctions for the rest of the year.

The National Treasury Management Agency’s (NTMA) said it would re-enter the debt market “fairly early” in 2011 and that canceling October and November’s auctions had been well received.

“From our contacts with the market, we are getting the feedback that there is no problem with this and it is viewed as a sensible and pragmatic step to take,” Oliver Whelan told national broadcaster RTE.