Nobel Prize winner and New York Times columnist Paul Krugman has called the “suffering of Irish people outrageous” in the current economic recession.

Krugman wrote on his blog  that they (The Irish)  “find themselves forced into savage austerity because they’re saddled with debts that by and large weren’t even used to finance Irish investment.

“Ireland was both a large borrower and a large overseas investor, and because its investments were risky, the crash in asset prices pushed it deep into net debt.

“Actually, Iceland is a similar story, on an even more extreme scale. But the Icelanders, of course, basically said that their citizens weren’t liable for the sins of their bankers.” Krugman wrote.

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Meanwhile, Irish Government leaders are "working with the lights out," writes a leading Irish financial advisor James Fitzsimons in the Independent and their actions will plunge Europe into "a depression that will last for generations."

Fitzsimons writes that the EU is heading back into a recession and leaders failed to make the "tough decisions" to prevent it.

Consumer demand has fallen and big businesses have scaled back production, while banks "still control the purse strings," he says. If action is not taken soon, the collapse of the euro and the break-up of the European Union is inevitable.

"Without fundamental changes to how banks operate, falling interest rates and recapitalisation will be wasted. Financial regulation is being used to justify reckless banking decisions while it pays lip service to protecting the consumer," warns the financial advisor.

He adds," Bank failure is looking more likely as the key political players dither."

He says that the EU is unstable and that Ireland needs to set its own course.

He concludes,"This doesn't mean we abandon the austerity measures, but this time they need to be in our own best interest."