Former European Commissioner and Goldman Sachs International Chairman Peter Sutherland has said Ireland is in danger of losing credibility unless what he called 'hard decisions' on cutting costs are made.

He told the Institute of Directors in Dublin that Ireland's position in debt markets had deteriorated, despite the successful auction of €1.5bn of bonds earlier this week.

Mr Sutherland claimed that our costs, mainly but not exclusively on pay, were still far too high and we had failed to measure our costs against those of other European countries.

'If we did so, it would be apparent that we are still way above average in many areas, particularly in the public sector and this says nothing about pension costs,' he said.

Mr Sutherland said lower prices and wages were 'essential' to avoid unemployment.

Referring to the €3bn of measures mentioned for the next Budget, he said more cuts could be found if the main political parties accepted that more was needed and were prepared to say so.

The former commissioner said cuts would be painful, but the alternative was much greater pain through the higher cost of borrowing.

Economy will sink like the Titanic, warns Begg

The economy will sink like the Titanic unless the country is steered on a dramatically new course, ICTU General Secretary David Begg has warned.

Mr told graduates a ceremony for Union Learning Representatives that the Government's handling of the downturn was like the reaction of the crew on board the doomed ship.

‘It struck me, sadly, that this is an apt metaphor for what is happening to our country,’ he said.

The Congress chief, who will protest with other union bosses when the Dail resumes next week, said the country would stagnate and suffer in a ‘lost decade’ unless new policies are adopted.

‘Like the officers of the Titanic, by steaming on, we will compound our first error with a second. We must slow down and change course before we do irreparable damage to the economy and society,’ Mr Begg said.