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Lack of "political fortitude" and poorly run institutions to blame for the financial crisis

The IMF is blaming the government and low quality financial institutions for failing to legislate to avoid disaster. The organisation will meet on Monday to discuss Ireland’s situation.

The IMF's Ajai Chopra will lead a meeting to discuss Ireland's situation on Monday
The IMF's Ajai Chopra will lead a meeting to discuss Ireland's situation on Monday
Image: Niall Carson/PA Wire/Press Association Images

A NEW REPORT by the International Monetary Fund is blasting the previous government for lacking the political courage to take steps to avoid economic disaster.

The Irish Independent reports that the IMF is also criticising the Central Bank, along with the Department of Finance for their performance between 2005 and 2008, saying that a lack of “political fortitude” along with badly run institutions are to blame.

The review found that the rise is unemployment is one of the most disastrous outcomes of the financial crisis, and warns that people leaving the labour market will have a negative effect on the “social fabric” of the whole of Europe. The IMF recommends that Ireland’s policy of protecting its permanent workforce while maintaining a temporary flexible workforce is something which needs to be addressed by introducing balancing measures across all sectors of the workforce.

The twice-yearly report on the European economy warns that the weak banking systems of countries like Ireland, Greece and Portugal remain a threat to the financial health of other governments in the eurozone, according to the Wall Street Journal.

The IMF is to meet on Monday to discuss Ireland’s situation and the findings of this latest report. Spokeswoman Caroline Atkinson said yesterday that:

The Irish program is on track. Of course there are difficult challenges.

She was responding to – or rather sidestepping – a question about whether the IMF is concerned about recent downgrades to economic growth here, and whether Ireland will be able to meet its targets.

The minister for public expenditure and reform Brendan Howlin said yesterday that the government is to seek a rescheduling of Ireland’s debt, in order to avoid defaulting by lengthening the maturity of the loan.

About the author:

Emer McLysaght

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