Economy won't begin recovery until 2010, EU says

The economy will not begin to recover from the recession until 2010, European officials claimed today.

The country is tipped to be one of the worst performing states in the EU over the next two years.

Only Latvia will be worse off.

Senior economists in Brussels said the world economy is facing its worst crisis since the Second World War and Ireland will only see a very mild recovery during 2010.

Joaquin Almunia, Economic and Monetary Affairs Commissioner, also warned about the growing national debt in Europe.

“To boost confidence, it is also crucial that Member States explicitly commit that they will reverse the deterioration of public finances as soon as we return to normal economic times,” Mr Almunia said.

The EC economic review warned Ireland would be hit by a very rapid rise in government debt, to above 60% of GDP by 2010, as the economy, as measured by GDP, shrinks by 5% this year.

Meanwhile, trade union Siptu issued its latest economic bulletin with president Jack O’Connor warning workers they were facing a battle to prevent pay cuts.

In a letter to union branches and shop stewards, the union leader said the banks should be brought under public control to ensure they act in the public interest, especially on home repossessions.

Siptu also called for a rigorous regulation to stop the reckless behaviour seen in the top levels of some of the banks.