Market turbulence ‘would derail recovery’

IRELAND has to “hope” there will not be further turbulence in the financial markets that would derail economic recovery, according to Taoiseach Brian Cowen.

The Taoiseach told the Dáil the “only way” to create jobs was to make the economy more competitive and insisted the Government was focused on that.

“All actions of Government are about making sure that growth comes back to the economy. And in the second half of this year it has been confidently predicted that it will,” Mr Cowen said.

“Indeed, from the last quarter of last year to the first quarter of this year, some finance houses have suggested that growth is returning,” he added.

Data published yesterday showed the economy grew in the first quarter of this year by 2.7%, meaning Ireland has technically emerged from recession.

But that figure included the profits of foreign-owned multinationals based in Ireland. When they were stripped out, the domestic economy actually shrank by 0.5% in the quarter.

Mr Cowen admitted the Irish recovery was at the mercy of international developments. “We have to hope that there will not be further turbulence in the markets,” he said.

He was responding to claims by Labour leader Eamon Gilmore that the Government had no plan to tackle unemployment.

Mr Gilmore said unemployment had reached record levels, with 452,882 people on the Live Register, the highest number in the history of the state.

That did not count the substantial numbers of people who had emigrated, he added. “The biggest crisis that the country is facing at present is the level of unemployment,” he said.

“Forty percent of those who are out of work have been out of work for more than a year. One in every three young men in the workforce is out of work.”

This impacted hugely on the public finances because every unemployed person represented a cost of approximately €20,000 to the state through lost tax and social welfare payments, Mr Gilmore added. “No active measures are being taken by the Government to get people back to work,” he said.

But Mr Cowen rejected that contention, saying the Government had doubled the number of training places. He also stressed that reducing costs and increasing exports was the only way ahead for the economy.

“That is the way back for this economy and it is the only way back,” he said.


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