Unemployment will keep rising, admits Cowen

TAOISEACH BRIAN Cowen said that unemployment would continue to rise until the economy improved.

He told the Dáil that nobody took any pleasure in people losing their jobs. He added: “It is clear from the strategies outlined and the models that have been projected for Ireland’s economy, based on the current world situation, that unemployment will continue to rise, unfortunately, before things get better.

“We must continue to do everything we can in terms of short-term measures to help people who find themselves unemployed, but we must also fix the economy . . . and this means dealing with the situation through Nama, as we are doing, to fix the banking system so we can get credit flowing again.

“We need to strengthen the balance sheets of the banks, remove the stressed assets from those balance sheets, and make sure investment money flows into the country to get credit going.’’ Mr Cowen told the Dáil that, with seasonal factors taken into account, the live register for June was estimated at 413,500, a month-on-month increase of 11,400, up 2.8 per cent since May.

“It is the slowest rate of increase since January,’’ he added.

Later, Labour leader Eamon Gilmore said the Taoiseach had provided the House with the seasonally adjusted figure.

The actual Live Register figure, for the month-by-month increase, was 21,721, he said.

“On the basis of the seasonally adjusted figure, the Taoiseach claimed the rate in the rise in unemployment was falling,’’ Mr Gilmore added.

“That is not the case; it is rising.’’ Mr Cowen said that the seasonally adjusted arrangement was well known.

“I am not making any distinction,’’ he added. “Any extra person going on the Live Register is a bad day.’’ Fine Gael leader Enda Kenny said that the “civil service-speak, that this is the slowest rate of increase, demonstrates just where we are’’.

He added that in January the rate of increase was 33,000; in February, it was 26,000; in April it was 15,000; in May, it was 13,000.

“This economy is in crisis,’’ Mr Kenny added.

“It is a long time since one of the Taoiseach’s predecessors said that if unemployment went over 100,000 the government should resign.’’ He added that it seemed the Department of Finance was “in a state of paralysis’’.

Mr Gilmore said that the cost of the extra unemployment could be assumed to be about €20,000 per job if they considered lost taxes and social welfare payments.

“All the measures taken in the April budget and the previous October budget – the income levies, pension levies and cuts in spending programmes – have been wiped out by the increase in unemployment,’’ he added.

“We are talking about an additional cost of around four-billion euro to the public purse as a result of that increase in unemployment, not to speak of the personal loss suffered by each individual who has lost his or her job in terms of lost income, lost hope and so on.’’ Mr Gilmore said the problem was that the Government was not giving sufficient priority to employment.

Mr Cowen said that an assets management agency was required to take the impaired assets off the balance sheets. That was necessary and it had been approved and agreed.

The Fine Gael proposal on the matter involved reneging on senior bond holders, he said.

“That is the Lehman Brothers solution and we see where that got us,’’ he added.

The Labour proposal was a pre-emptive nationalisation of all the banks. “That is the Icelandic model and we know where that got us,’’ said Mr Cowen.