Fiscal prudence is essential as the Republic enters what has the potential to become a period of sustained growth, the new president of employers' organisation IBEC said last night.

The economy has become less competitive in recent years and some of this lost ground needs to be recouped, according to Mr Gary McGann, chief executive of Jefferson Smurfit Group, who has just taken up the position.

Higher oil prices must be accepted as an economic reality, he said, speaking at an IBEC dinner to mark his appointment last night. Attempting to counter the effect of the climbing cost per barrel through wage increases is counterproductive, as it only furthers damage the economy, he said.

In these circumstances it is essential that the government resist the urge to raise energy taxes in the next budget, said Mr McGann.

Prior to joining the Jefferson Smurfit Group in 1998 Mr McGann held various senior management positions. He joined Gilbeys of Ireland as finance director in 1988 and was made chief executive in 1991.

In early 1994, the Government appointed him group chief executive of Aer Lingus, a position he held until 1998. He joined the Smurfit Group as chief financial officer in August 1998, becoming president and chief operations Officer in December 1999.

He was named chief executive Officer in November 2002. In 2003, he was appointed chairman designate of the new Dublin Airport Board

He succeeds Mr Maurice Pratt, Group Chief Executive, C&C Group plc.