Ireland has thriving economy, insists Lenihan

 

Ireland "has a thriving economy", and it would be wrong to compare the country's economic situation with that of Iceland's, Minister for Finance Brian Lenihan has said.

Speaking on BBC's Newsnightlast night ahead of consultations with employer and trade union groups on plans to tackle the crisis in the public finances, Mr Lenihan warned the Government had ruled nothing out.

"The Irish economy has headed into the current recession in a very strong shape. We doubled our workforce in the last 20 years and we have very low public debt, but like economies throughout the world we're under a severe challenge . . . and we have to take firm decisions as a Government to control our fiscal position," he said.

"There's been an alarming growth in our public borrowing this year, and the Government is determined to check that and take whatever corrective decisions are required.

In a wide-ranging interview on the state of the country's economy, Mr Lenihan rejected suggestions that Fianna Fáil's policies were to blame for the crisis.

He admitted that while there were domestic causes due to a correction in the housing market, this had been exacerbated by the problems facing the global economy.

Mr Lenihan rejected claims that Ireland's economy mirrored that of Iceland's - which has been rocked by the collapse of its banks last year following a decade-long boom fuelled by cheap foreign funding. The Minister said that it was "completely untrue" that the countries were in a similar situation.

"We've a very low public debt. We have a thriving economy. We're not a glorified hedge fund, we are a country with more than two million people at work. We've a very strong, vibrant economy," said Mr Lenihan.

Mr Lenihan also denied suggestions Ireland had joined the euro too early or that being a member of the euro zone had made it more difficult for the Government to manoeuvre its way out of the recession.

He claimed that the euro had given great strength to Irish banking and financial system and said Ireland had never freely floated its currency.

"For many years we were linked with sterling now we are linked with the euro. We've never had a huge scope for manoeuvre as a Government with regard to currency measures . . . small countries which have their own currency tend to be speculated against. We don't want to be put our country in that position so we link to a stronger country," he said.