Ireland's parliament was dissolved Tuesday for a long-awaited Feb. 25 election as Prime Minister Brian Cowen exited the political stage defending his management of the nation's plunge toward bankruptcy.

Cowen declared a formal end to his government two months after he was forced to negotiate a euro67.5 billion ($92 billion) loan package from the European Union and International Monetary Fund, a measure he had insisted Ireland did not need.

Cowen told a silent, somber parliament that his 2 1/2 years as prime minister "have been a time of great trial and test. I believe we have worked hard to correct past failures and to secure the future recovery of our country."

At the end, only lawmakers from his long-ruling Fianna Fail party — expected to suffer a battering of historic proportions in the Feb. 25 vote — stood to applaud him.

Cowen agreed to an early election, rather than trying to serve his full term to mid-2012, after suffering a string of humiliations and losing his parliamentary majority last month.

On Monday, Cowen, 51, announced his retirement from politics after a 26-year career. He became Ireland's first sitting prime minister not to seek re-election to parliament.

Twenty of Fianna Fail's other current lawmakers have taken the same decision, fueling speculation that the party — which means "soldiers of destiny" in Gaelic and has won the most seats in every election since 1932 — faces an unprecedented defeat Feb. 25.

Recent polls have rated Cowen as the most unpopular leader since Ireland won independence from Britain in 1922; he's leaving office with an 8 percent approval rating. Last week he was forced to resign as Fianna Fail leader to help boost the party's election prospects.

The most likely victors, opposition parties Fine Gael and Labour, are publicly committed to renegotiating terms of the EU-IMF rescue and Ireland's commitment to insure its banks against defaults, the policy that exposed the nation to potential insolvency.

Fine Gael leader Enda Kenny decried Cowen's government as "the worst in the history of the state." And Labour leader Eamon Gilmore said his party was determined to overturn Fianna Fail decisions "that brought down our country, that tied our state to the sinking and stinking misfortunes of the banks, and that sold us out in the deal with the EU and IMF."

Cowen said the winners of the election would wield the power to continue his government's policies of bank bailouts and deep austerity measures — and warned that taking any other course would lead to even greater economic disaster.

"This election will define our economic future. It will decide whether Ireland moves forward from this recession, or whether we prolong it or indeed succumb to it," he said.

Ireland's economy boomed from 1994 to 2007 on the back of heavy foreign investment and a homegrown property bubble. But Irish banks borrowed recklessly on international markets and loaned heavily to construction barons in Ireland, Britain and the United States.

When the global credit crisis in 2008 exposed Ireland's exceptional vulnerability to property loans, Cowen's government sought to prevent the collapse of Irish banks by offering them blanket insurance on all their deposits and — much more controversially — their global borrowings from foreign banks and hedge funds.

That strategy has left Irish taxpayers with a bank bailout bill likely to top euro50 billion ($70 billion) — or about euro11,000 ($15,000) per man, woman and child — as Dublin banks faced major defaults on their loan books and demands from foreign creditors for their money back.

The bank-bailout bill helped to drive Ireland's 2010 deficit to 32 percent of GDP, a postwar European record. Ireland is now facing 2011 spending cuts and tax rises totaling an unprecedented euro6 billion ($8.2 billion), a measure likely to increase unemployment already standing at a 17-year high of 13.5 percent.