Wednesday, November 5, 2008

Ireland's Unemployment Rate hits 6.7%-FG motion in Dail

According to the CSO, Ireland's unemployment rate now stands at 6.7% of the labour force, up from 4.6% this time last year. These horrendous figures were announced today.The Live register shows a seasonally adjusted increase of 15,800 during October. Ireland's deficit stands at 7% of GNP.

An FG motion in the Dail tonight calls for the following:

"The Government must overhaul FÁS and provide a public works scheme for the unemployed. We need to restore competitiveness and support business, especially small/medium enterprises. We can do this by freezing Government charges such as rates and development levies; bringing down utility costs for electricity, gas, water and telecommunications; investing in infrastructure, in particular broadband, road and rail; cutting back red tape; reversing the hike in VAT; suspending the pay deal; consolidating labour law and abolishing anti-employment provisions such as double pay for Sunday working in the catering sector, and crucially wasting no further time in recapitalising the banks so that business, large and small, can get credit."

The deficit has not been brought under control. A mini budget is likely in July of 2009 after the local elections to arrest the slide. Further cut backs may drive the economy into a deeper recession. Meanwhile unemployment will surely hit 300,000 by mid 2009. Looks like Hobson's choice for the government. The FF/PD government could have reined in public expenditure in the run in to the 2007 General Election. Instead it permitted a growth of 25% in public expenditure over two years. It might even have won the General Election without this. Now it may pay a heavy political price.Three rocky years lie ahead if we are lucky. Hopefully the fall in interest rates and fuel prices may offer some small respite.

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