Ireland's unemployment rate eases
Ireland's unemployment rate slightly eased last month to 12.6 percent, the government's Central Statistics Office reported Wednesday, and Prime Minister Brian Cowen said the recession appears to have bottomed out.
"While unemployment remains at a very high level, these figures confirm that the situation is stabilizing," Cowen told lawmakers in Dail Eireann, the Irish parliament.
The report said the number of people claiming unemployment rose slightly to a record-high 436,956. But the unemployment rate slid from January's 12.7 percent because seasonal factors increased the size of Ireland's work force. Analysts said rising emigration also contributed.
Opposition leaders denounced Cowen's government for concentrating on budget-cutting rather than investing in programs to keep people in jobs and stimulate one of Europe's most recession-ravaged economies. But Cowen said Ireland had no choice but to slash spending because of the spiraling national debt.
Ireland's euro22 billion ($30 billion) deficit represents 12.5 percent of its gross domestic product, second only to Greece in the 16-nation euro zone. The recession has greatly reduced tax collections from incomes, retail sales and particularly Ireland's once-booming property market.
Ireland is seeking to get credit flowing again with aggressive bank-bailout efforts. It already has invested euro7 billion in the country's two major banks and has formed a "bad bank," the National Asset Management Agency, that soon plans to start purchasing - at heavy discounts - an estimated euro80 billion in defaulting land and property loans from five Irish banks.
But Arthur Morgan, a legislator from the Irish nationalist Sinn Fein party, accused the government of doing too little to get teenagers and 20-somethings into jobs. "The exit strategy (from the welfare rolls) for these young people is emigration, not employment," he said. Ireland experienced strong immigration for the first time during its Celtic Tiger boom of 1994-2007, but has returned to net emigration, with Canada and Australia favored destinations.
Alan McQuaid, chief economist for Bloxham Stockbrokers in Dublin, said young people were helping to keep Ireland's jobless rate down both by leaving the country or taking extended refuge in universities.
"However, there does not appear to be any indication that employers are actually hiring more staff," McQuaid said. "Indeed, it is hard to see job prospects getting better unless the banking system is stabilized and money flows freely back into the economy again."
In one bright spot, McDonald's Restaurants unveiled plans Wednesday to open four new outlets and hire 250 people this year, chiefly in Dublin. The expansion means the US fast-food giant will have 82 outlets employing 3,850 people in Ireland.