Fine Gael leader Enda Kenny today told the Dáil the recent report from the International Monetary Fund (IMF) on Ireland was a "damning indictment" on the Taoiseach and predicted Ireland would suffer a decade of economic stagnation.
In a speech earlier today, Brian Cowen defended his Government's handling of the economy during a debate on the reports from the IMF and the Organisation for Economic Co-operation and Development (OECD).
Irish banks face losses of €35 billion to the end of 2010, the economy will shrink by 13.5 per cent from 2008 to 2010 and unemployment will climb to 15.5 per cent next year, according to IMF. The OECD said it expects the State's economic output to fall by 9.8 per cent this year.
Mr Kenny told the Dáil: "The IMF’s recent report on Ireland, Taoiseach, is a damning indictment of your record as minister for finance. The report makes it clear that your failed policies have given Ireland the worst recession of any of the advanced economies. Thousands of people have lost their jobs because you failed to do yours.
"The IMF leaves no room for doubt. On page 8 of the report it states: 'Ireland was perhaps the most overheated of all advanced economies'. On Page 21 it argues that: 'Well before the crisis hit, public finances had developed serious structural weaknesses.'," the Fine Gael leader said.
"The current Minister for Finance [Brian Lenihan] has certainly got the point. No sooner was the report out, but he was popping up on the media like some latter-day Pontius Pilate. Yes, he told the media, the economy was overheated - and then he slyly reminded everyone that he was not a member of the Government at the time."
Mr Kenny said: "The “Lost Decade” was the term applied to Japan in the 1990s, after its economic bubble burst. . . . Ireland, it is now clear, is going the same way as Japan in the 1990s.
"Using the IMF’s own forecasts, Ireland’s GDP will not reach 2007 levels until 2017. That’s your legacy as Minister for Finance, Taoiseach. A decade of growth wiped out, and tens of thousands of long-term unemployed."
Labour leader Eamon Gilmore said the debate was an important one "because vital decisions are going to be made by Government during the summer recess; decisions which it may be impossible to reverse".
"Because the report of the IMF in particular, calls attention to fundamental flaws in the Government approach to the banking crisis in particular, which it is not too late to address," he said.
Mr Gilmore said the IMF-identified crises involving employment, banking, and public finances were interlinked. "Unless we deal with each of them, in particular unless we do more for jobs and businesses, we risk making the other problems even harder to manage."
Labour deputy leader Joan Burton said the ordinary people were first in line for cutbacks while people "Golden Circle" were being assisted.
"This Government has a different mindset that the plain people of Ireland are to be the first in the firing line, the children of Ireland are to be the target of cuts in welfare, in education, in health care before any effort is made to face down the elite that has been the favoured recipient of public largesse, of tax breaks, of easy tax exile status, of Cinderella rules, of public contracts," Ms Burton said.
"For all the patriotic rhetoric we get from Minister Lenihan, we all know a deeper truth. The purpose of public policy at this point in time is to offer a rescue package to the FF Golden Circle," she said.
Sinn Féin economic spokesman Arthur Morgan said there was no stimulus plan contained in the IMF report, "just proposals for more inequitable cuts and bad bank bailouts”.
“If the recommendations of this report were to be implemented, we would see this economy spiral into depression. There is no stimulus here, just slash and burn policies. It is what we have come to expect from the IMF and this Government," the Louth TD added.
