Monday, 22 August 2011

Leaders Handled Economy Like Intoxicated Joyriders...

Ahern and Cowen handled the Irish economy like 'intoxicated joyriders'...

FORMER Taoisigh Bertie Ahern and Brian Cowen handled the Irish economy like "intoxicated joyriders" before it collapsed, a leading academic has said.

Dr Ed Walsh, the University of Limerick's founding president, also launched a blistering broadside against the public sector as he delivered the annual Michael Collins oration at Beal na mBlath in Co Cork.

He described it as "flabby and over-paid" as well as "antiquated and dysfunctional".

And Dr Walsh said that the current Government had to reverse a ludicrous situation whereby Ireland had allowed its basic jobseekers' allowance to be greater than the average industrial wage of most EU accession states.

"The crisis that is convulsing Europe has its origins in the partisan management of the euro currency from the outset. Sustained low interest rates to facilitate a dominant Germany in the process of reunification were exactly what the overheated economies of Ireland and many other countries did not need," he said.

He added: "(Bertie) Ahern, (Charlie) McCreevy and (Brian) Cowen, with the economic insights of intoxicated joyriders, made no attempt to counteract this; but perversely poured fuel on the flames by incentivising speculative building and borrowing."

Unlike Denmark, Sweden and the UK, Ireland joined the euro and lost control of its interest and currency-exchange rates -- and also opened the economy to a wave of cheap credit that had disastrous consequences, the academic said.

Dr Walsh warned that Ireland now had no choice but to lower the standard of living, balance the national budget and try to negotiate concessions to the "harsh and unfair terms imposed by the EU". He laid the blame on successive governments who, for electoral gain, undermined the fundamentals of the economy.

"They permitted uncontrolled expansion of the public sector, doubling the cost to the taxpayer. They dislocated central government by attempting to dispatch parts of it to favoured regional constituencies.

"They eroded the tax base, appointed people of doubtful competence to public bodies, and ceded control in key areas to social partnership -- resulting in public-sector wages rising to the highest levels in the EU," he said.

The consequence, Dr Walsh said, was Ireland was now on its knees just 11 years after it was ranked the fourth-most competitive economy in the world.

He added that, without a fair and restructured eurozone deal, Ireland would inevitably slide into default.

report by Ralph Riegel - Irish Independent

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