FORMER Taoiseach Garret FitzGerald has blamed Ireland's dire economic state on a series of "calamitous" government policy errors.
According to the former Taoiseach, the first mistake was committed between the years of 2000 and 2003 by then Finance Minister Charlie McCreevy when he boosted public spending by 48pc while cutting income tax.
The second problem occurred when government policies allowed, or even encouraged, a housing bubble to develop, "on an immense scale".
This bubble was accompanied by a bubble in asset-related tax, he said, which helped to fuel further cuts in income tax. He went on to point out that revenue from asset-related tax is expected to fall this year to less than half its 2007 level.
Initial Government reactions to the crisis were slow, said Dr Fitzgerald.
However all was not lost, he said, with positive public attitude and decisive action from the Government making it possible for Ireland to come back from the brink of financial ruin.
With Taoiseach Brian Cowen promising to make pay cuts in the public service this year, "Ireland now has hope of emerging from a long, painful process with improved capacity to compete".