American economist and Nobel Memorial Prize winner Joseph Stiglitz has warned that Ireland will experience a "lost decade" as a result of the European Union-International Monetary Fund bailout.

Mr Stiglitz is in Ireland as a guest of the UCD Clinton Institute and the Roosevelt Institute.

Speaking on RTÉ's Morning Ireland he said: "We know that austerity has essentially never worked and why that was not understood by the European leaders is beyond me.

"It was almost a religious notion if you sin so badly you have to feel the pain."

Mr Stiglitz, who won the Nobel Prize for Economics in 2001, said he was astonished at how little protest there was in Ireland following the decision to bailout the banks.

He said it was a "mistake" to burden taxpayers with bank debt.

"The ECB and others wanted to save the banks, so it was a trade off between banks all over Europe and the Irish citizens." 

Asked about the economy's prospects of recovery, Mr Stiglitz said: "Will you get back to the growth path you were on? Almost surely, no.

"Will you get back to where you were with maybe a lost decade? Yes, I think you will. But it will be a lost decade, at least."

"That's the reality that Europe needs to wake up to," he added.

Elsewhere, the European Commission has said that Ireland's implementation of the EU-IMF bailout programme was "steadfast" but has cautioned that spending in the health sector is still in need of monitoring.

In its first response since the conclusion this week by the Troika of the 12th and final review mission, the Commission said the Irish economy had been growing above the eurozone average since 2011, but that overall growth in 2013 would be "low".

Growth in 2014 was expected to reach 1.75%.

The Commission said spending control in the health sector "must be maintained" to ensure that the budget deficit target of 7.5% was met.

"Realising the proposed savings in health sector spending will require particular attention," it added.