€15bn cuts ‘pose threat to economic recovery’

THE Economic and Social Research Institute (ESRI) has warned that the economy could face a tipping point, if the €15bn cuts are pushed through in the next four budgets to get the deficit down to 3%.

The ESRI warns that the pressure to slash spending and raise taxes in the time agreed with the EU Commission could seriously undermine any chance of economic recovery further down the line.

Even in the more benign scenario, the institute is forecasting employment will average 1.86m this year, down 68,000 on 2009, a decline of 3.5% while unemployment is expected to average 13.25%. Next year employment will decline to 1.85m with unemployment to rise to an average of 13.5% for the year.