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Irish Economist Marc Coleman has defended Ireland’s financial reputation after the country’s economy was attacked by Labour’s Holyrood leader Iain Gray (pictured) on Thursday at First Ministers Questions.

Speaking on BBC Radio Scotland Mr Coleman described the comments made by Gray, who had described Ireland’s economy as being “on the brink of collapse”, as politically motivated and lacking credibility.

Iain Gray had questioned the ability of Scots to govern themselves by attacking Ireland whose economy he said was “on the brink of collapse” and “teetering” on the edge.  The Labour group leader also claimed that an independent Scotland could not have coped with the banking crisis given that Scottish banks were significantly larger than Ireland’s.

Mr Coleman rubbished the 'brink of collapse' claim by pointing out that Ireland’s economy is stable with retail sales growing and unemployment falling.  Mr Coleman pointed out that as far as debt was concerned Ireland is in roughly the same debt position as the UK.

Mr Coleman, who spoke warmly of “our cousins in Scotland”, went further and explained that Ireland is the second highest income country in the EU and has a GDP per capita that is in fact higher than the UK and 30% higher than the EU average.  Mr Coleman also suggested that 10 years of Labour rule had not been good for Scotland.

Mr Coleman said: “I understand that Iain Gray is a Labour party politician ....

“... ten years of Labour leadership has left Scotland with a GDP per capita that is significantly lower than the EU average.

“Perhaps the credibility of that remark [Ireland ‘on the brink of collapse’] should be filtered through that simple fact.”

Mr Coleman also went on to explain that this week’s forecast for Ireland was a “worst case scenario” and that Ireland, unlike the UK, had a reserve pension fund of £20 billion that could be called upon. 

The comments by Iain Gray echo similar remarks made by ex Secretary of State Jim Murphy who in November 2008 described Ireland as being part of an ‘arc of insolvency’ along with Norway and Iceland.  Then the Labour MP’s comments provoked an angry response from each of the nations including one from Bjarne Lindstrøm the Norwegian Ambassador who sent a letter rebuking both Mr Murphy and media reports.

Hear Marc Coleman’s full interview here:

Oil Fund
In the same parliamentary session Iain Gray also questioned the viability of a Scottish oil fund.  However the Labour group leader’s understanding of how Norway built up her own fund had to be corrected by First Minister Alex Salmond after Mr Gray wrongly stated that Norway’s fund had been due entirely to state oil company Statoil.

Norway has been protected from the effects of the banking crisis by an oil fund currently sitting at almost £300 billion and growing.  Norwegian Finance Minister Sigbjørn Johnsen recently said of the fund: “It’s kind of like a dream.  The size of the fund exceeds the expectations of most of us.” Good husbandry of her natural resources has given the Norwegians an extremely high standard of living and future generations will be able to benefit from the discovery of oil.

This is in contrast to Scotland who will find her grant from Westminster savagely cut, this year and beyond, as the UK braces itself for the effects of dealing with the deficit left behind by Labour.

The SNP recently repeated their calls for an oil fund after new discoveries were made in the North Sea, one of which 'Catcher' is estimated to hold around 300 million barrels of oil.

In a recent BBC interview Nobel Prize winning economist Professor Josef Stiglitz accused successive UK governments of having “squandered” North Sea oil wealth and claimed that without an oil fund future generations of Scots could be left impoverished.

The interview with Professor Stiglitz.

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