Cowen says economy is at turning point

TAOISEACH BRIAN Cowen said yesterday that the Irish economy had reached a turning point but he spoke of the challenge he faced in communicating the scale of the problem to the public.

He told the National Treasury Management Agency’s Government Borrower’s Forum at Dublin Castle that the current extraordinary times would leave a profound mark on the future shape of the global economy.

“I have certainly never experienced the rapidity of events, the necessity for rapid decision making, and the impossibility of avoiding risk in managing the crisis to ensure a country is not overwhelmed by it,” said Mr Cowen.

“It has also been very challenging, in the face of understandable anger and worry, to communicate with the public about what are complex issues that must be addressed on an ongoing basis,” he said.

The Taoiseach said an economic policy was not much use if it did not gain the acceptance of the public and failed to result in the decisions necessary to enable recovery.

“It is not an exaggeration to say that public finances across advanced economies are in a worse state today than for a very long time, except for wartime episodes and their immediate aftermaths.”

Mr Cowen said the word unprecedented did not come near to describing the magnitude of the events that have occurred since the summer of 2008.

“These events have led many to question the very basis of the global financial system. They have led us to rethink the role of the State in relation to financial markets and markets in general.”

Mr Cowen said that within the EU recent events had initiated a hugely important discussion about future governance and the operation of the Stability and Growth Pact and Ireland was participating constructively in that dialogue.

He said the positive news was that the decisive action taken since the crisis began had seen much greater stability restored and the latest indicated that the economy would return to growth during the course of the year .

Further evidence that the turning point had been reached was that consumer sentiment was back to levels last seen in early 2008, exports had been remarkably resilient and the latest exchequer returns showed that revenues were now on target for the period to the end of April.

“Despite this progress, events internationally remove any scope for complacency,” he said.