Firms could be ‘wiped out in new bust’

Ministers have been accused of ignoring the threat of a new economic crisis triggered by a wave of businesses forced to go bust.

Morgan Kelly, the first economist to predict the scale of the Irish financial crash, warned that moves by the European Central Bank to “clean up” around €32bn in bad debts owed by small and medium sized firms (SMEs) could plunge the country back into disaster.

Stating that “real crisis” may not yet have hit the Irish economy, Prof Kelly said: “We could be facing something really, really terrible, quite soon.