Krugman: Recovery will take five years

THE winner of the 2008 Nobel Prize in Economics warned it would take five years before we get back to average EU growth.

Meanwhile, Paul Krugman warned Ireland will “suffer” falling wages and prices as the Government has no other policy options to call on because of our EU membership.

Wage cuts at the level of 7% will be required for the next few years to get the economy back to a reasonable growth path, he said.