The White Paper on Estimates of Receipts and Expenditure for 2009, published today, confirms the full cost of Cowenomics to the Irish people.

The fiscal position as outlined marks a remarkable deterioration in this country’s economic situation in just twelve months.

It is worth recalling that in 2007, Ireland had a current budget surplus of €7 billion, the General Government Balance was a surplus of 0.5% of GDP, and the exchequer borrowing requirement was only €1.6 billion. Now the projected deficit for 2009 will be almost €15bn or -7% of GDP.

The fall in the fortunes of the Irish economy as reflected in these figures is the most rapid and severe in the history of the state. In 1997 Fianna Fail inherited a modest budget surplus. When the leave office they are likely to leave behind the biggest deficit every seen.

While the good times rolled, this Government never ceased congratulating themselves on their economic prowess. Now that they have finally admitted that the country is in a recession, suddenly it is everybody else’s fault but their own.

Yes, the recession has been made worse by the international credit crunch. But let us be absolutely clear: Ireland is suffering hard and deep because our recession has its
origin firmly in the house-price bubble which Fianna Fáil stoked, mishandled and refused to dampen. It is no accident that Ireland is the first of the Euro-zone economies to go into recession.

Everyone knew that, for the past seven years, the Irish economy has been too dependent on the construction sector. Everyone knew – from the IMF to the man on the street to the three Bacon reports commissioned by the Government – that spiralling property prices were simply unsustainable. Yet the Government refused to intervene to dampen house prices.

Their continued mishandling of the banking crisis is further evidence, if it were needed of Fianna Fáil’s utter failure to manage the Irish economy.

What Ireland needs in the budget next week is a strategy to protect jobs and promote growth. If the Government-inspired leaks are to be believed, it is clear that we will get no such thing.