The Irish Economy

Unemployment is truly a great scourge in economic and social terms. It is welcome therefore to see that the main motivation of some of our most popular analysts (such as David McWilliams and George Lee) has arisen out of a genuine desire to deal with unemployment ills. The present statistics however are certainly not encouraging. The official figure (for standardised unemployment) has risen from 4.8% in Jan. 2008 to 12.7% in Jan 2010. However this does not convey the full story regarding worsening unemployment conditions. According to the methodology by which standard rates are assessed, 1 hrs. paid work a week would exclude one from the unemployed statistics! However, we have also many others - still listed as employed - who may however have suffered a significant drop in working hours or in temporary contract work that may not be continued. And even for those not yet directly affected a much greater degree of uncertainty exists with respect to the security of their employment...

A major issue has arisen at Dublin Airport with Michael O'Leary once again centre stage. It appears that 200 aircraft maintenance jobs have been lost to Prestwick Airport due to the inaction of The Minister for Enterprise Trade and Employment (Mary Coughlan). Cleverly, by highlighting that these jobs have already gone with a further 300 still up for grabs he has considerably raised the political stakes with respect to the Government's response. The background to the dispute is as follows. For many years a large skilled base of aircraft maintenance engineers existed at Dublin Airport formerly known as Team Aer Lingus and more recently as SR Technics. However due to the pressures in the airline sector SR Technics (a Zurich based firm) announced in early 2009 that it was to cease operations in Ireland with the loss of over 1100 jobs (citing the high costs of doing business at Dublin Airport as a major factor). The Dublin Airport Authority (DAA) which is responsible for the running...

Attempting to follow the litany of problems faced by the banking system here in Ireland would lead one almost to despair! Though we knew more than a year ago that they faced horrendous difficulties, the continually evolving situation reveals them as much worse than originally anticipated. In September 2008 following the Lehman crisis the Government took the unprecedented step of guaranteeing bank deposits to the sum of €400 bl. At first we were assured that this move was due solely as a result of a temporary liquidity crisis in the banking system (triggered by the international financial upheaval at the time). However it quickly emerged that one of the banks Anglo Irish - with no branch network - had accumulated huge losses on loans mainly to the commercial property and would need to be nationalised (costing the taxpayer countless billions). Then it became apparent that the other banks were all very much under capitalised (thereby requiring the State to pour in additional billions of t...

So George Lee has left Fine Gael after just 9 months in the party. How much things have changed since the heady heights of his sensational by-election triumph last May! In the eyes of many he was seen as the new political messiah for Fine Gael bringing the promise of fresh economic thinking and future electoral success. However it has all turned sour so very quickly. Frankly I was surprised when Lee left his influential post as RTE's revered economics correspondent, a role for which he was clearly designed and in which he excelled. Apart from correctly alerting listeners regarding the flawed nature of Celtic Tiger policies, the reports gained additional credibility through his communication skills and a sincere emotional engagement with the issues involved. So in this respect he did not fit the stereotype of the detached economics observer and was all the more loved for that very reason! However on the negative side, Lee's reports rarely displayed great detail or original...