A leading Irish economist has insisted that the country will not make a full financial recovery for at least another five years.

Colm McCarthy, a University College Dublin academic, was one of the few to predict the demise of the Celtic Tiger.

Speaking at the Cantillian Summer School in Tralee on Thursday, Mr McCarthy told the audience that Ireland has had two macro-economic cock-ups in a generation.

“Ireland is probably now in an even worse position that it was during the last recession in the 1980s because the banking sector has collapsed this time around, while a currency devaluation made the economy competitive and a pick-up in global demand in the early 1990s created an appetite for Irish exports," he said.

He also noted that another major problem is global distrust in  bond markets. Despite interest rates being higher in the troubled 1980s, Ireland was still in a good position when it came to borrowing money.

"I've been watching these markets since I was a kid and I've never seen them as nervous as I've seen them in the last few years," he said. McCarthy insisted that things “will keep going north for the next few years."

McCarthy called for a comprehensive overhaul of government, which included the abolition of the Seanad to be replaced by a single tier government. He is also in favor of more independent think-tanks and further debate in newspapers.

McCarthy criticized the Irish banking system and expressed his disbelief that so many culpable bankers remained in “situ after they destroyed their companies." He added that this would not occur in countries like the US where they take their capitalism seriously.

McCarthy spearheaded An Bord Snip Nua, a major cost cutting project for the government last year aimed at cutting public spending by over €5 billion.