gloom the recession could drag on for years.

And Mr. J. Michael Collier said Government should show leadership by setting an example.

The Bank of Butterfield's chief general manager went on to urge Finance Minister the Hon. David Saul to put Government programmes under the microscope.

He suggested committees from the public and private sectors could team together to come up with cost-cutting measures.

"We strongly urge Government to reduce waste, cut out the fat without cutting into muscle.

"Reducing Police recruitment activities is, for example, cutting into muscle and is an unwise move.'' Government was also called on to slash the number of GP vehicles on the roads.

Bermudians were irritated by the sight of 75 or more Government vehicles during a recession.

Mr. Collier hit out in yesterday's letter to the bank's shareholders.

He said the United States' economic performance -- crucial to Bermuda's financial health -- had been disappointing over the last three months.

Debt piled up during the 1980's overshadowed the benefits of low interest rates, he added.

Japan's economy is likely to remain stagnant until early 1993, and prospects in Europe will remain clouded for some time.

"These factors along with the uncertainty over the upcoming US elections suggest that the pace of recovery in the United States will remain subdued for the balance of the calendar year.'' Mr. Collier painted a gloomy picture of Bermuda's economic health -- describing Dr. Saul's forthcoming budget as a "real challenge.'' "Very few Bermudians have experienced such a long down turn in our economy and therefore businesses and individuals are finding it increasingly difficult to cope under such conditions.

"Clearly, we must cut our cloth to suit the circumstances. The Country is looking to Government to set the example and instead of increasing taxes find ways to alleviate the tax burden.

"The Ministry of Finance should carry out forthwith an evaluation of all Government programmes to determine whether or not they generate value for money and at what cost.'' Mr. Collier went on: "Constant irritants to hundreds of Bermudians at a time of continuing recession are the seventy-five or more Government private GP vehicles which move about the Island day in and day out.

"Only a decade and a half ago there was only one such vehicle. The Ministry of Finance should establish a quota of vehicles and substantially reduce the number of GP vehicles on our roads.

"If necessary a small pool of vehicles could be requisitioned based on seniority and need.'' Mr. Collier also appealed for the number of Government employees to be curbed, returning to the level in 1983/4.

"A reduction in Government expenditure and, consequently, taxation would give the local economy the stimulus for growth and increased employment in the private sector would follow.'' Mr. Collier continued by urging the lid be placed on Government salaries.

"In order for tourism to recover fully, Bermuda must have a period when local prices are at least stable: this implies that wages and salaries must remain static for a period of time.

"We call upon the Government to take a leadership role in this area by setting the example.

"There is currently no indication that there is movement out of this recession, which may go on for some years. Government must plan major cut-backs in expenditure, perhaps targeting them over the next seven years.''