Kenny Points To 'Lost Decade' Over Economy

The opposition leader has said Ireland will have a "lost decade" due to the crippling economic downturn.

Speaking in the Dáil debate on the IMF & OECD Reports, which both heavily criticised the Government's handling of the economy, Mr Kenny compared Ireland's plight to that of 1990's Japan.

The Fine Gael leader said the 'Lost Decade' was the term applied to Japan in the 1990s, after its economic bubble burst.

He said that Japan experienced a decade of stagnant growth when the its economic miracle disappeared.

"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," Mr Kenny said.

He went on to describe the IMF report as a "damning indictment" of the Taoiseach's record as a minister for finance and accused Mr Cowen of failing to properly regulating the banks to cool the property boom.

Mr Kenny said: "The figures produced by the IMF are truly terrifying. It estimates that the total losses in the banking system could be a massive €35 billion for property-developments loans alone. However, it also believes that losses are likely to extend well beyond the property-development sector. In other words, total losses may be well over €35 billion."

Meanwhile, a spokesman for the government has claimed the IMF report has shown that the government is on the right track with regard to banking and the public finances. In a statement released on Friday, Fianna Fail said the IMF had commended the government's handling of the economic crisis, saying it has met the challenge to stabilise the banking system through the guarantee to depositors and creditors, and the recapitalisation of banks.

The spokesman said: "The IMF report proves Fianna Fáil have the answers to deliver Ireland from this economic crisis, something which Fine Gael or Labour have failed to do. The opposition criticises the government at every turn, but they have consistently failed to offer any alternative as to how they would deal with the current economic crisis. It is ironic that the economic measures commended in the IMF report, are the same measures that Fine Gael and Labour recently criticised."

(DW/BMcC)