Jim Power: 'Leadership let us down'

Charlie McCreevy, Brian Cowen and a "lack of integrity" in the church, the banks and even the GAA have plunged the country into the "deepest economic recession since independence", according to one of the country's leading economists.

In a hard-hitting paper to be delivered at the MacGill summer school in Glenties, Co Donegal, tomorrow, Jim Power, economic consultant to Friends First, says that "at all levels of society, Ireland's leadership has let us down in a big way".

Policy makers, and indeed the rest of us, became totally caught up in the booming economy and "Ireland became fat and arrogant", Power says.

"We cannot accept ever again the ethos of the last two finance ministers, Charlie McCreevy and Brian Cowen, who operated on the principle that if the money was there it will be spent, and if not, then it won't. This is no way to run a small company, not to mention a country. An inordinate dependence on the construction sector, along with the government's general economic illiteracy, mis-management of public finances, flawed fiscal policy, pandering to vested interest groups and inability to make tough decisions, led to Ireland's current heightened vulnerability."

And in a week in which it was revealed that the government had ignored advice about the bank guarantee scheme, the banks and the regulator come in for particular criticism.

"The banking system will have to be re-engineered – those responsible for the crisis cannot be left in place. We should not allow the banking system to forget that it is a wealth facilitator rather than a wealth creator in its own right," warns the Friends First economist.

Power suggests a special levy on the banks to pay for "past and future banking failures" and says it would be best now to wind down Anglo Irish Bank. "Integrity has to become a bigger feature of Irish life. Such integrity is sadly lacking across Irish society, from public bodies to the church, to the banking system and sporting organisations such as the GAA," he says.