The Taoiseach has warned of further spending cuts and difficult social partnership negotiations as unemployment figures for last month showed no sign of economic improvement.
The Taoiseach yesterday called on all sides in the social partnership talks to be guided by "realism", saying economic conditions were tighter than at any time in the last five years.
"In order to secure an agreed outcome," he told the Dáil, "it will be imperative that expectations should keep in line with current economic realities. This is the key challenge now being presented to the process of social partnership."
After the Cabinet yesterday held its last discussion on the Book of Estimates for next year, Mr Ahern said: "We have to trim our own sails and cut back public expenditure to more realistic levels."
The Book of Estimates, outlining the Government's spending plans for 2003, will be published tomorrow week.
Unemployment fell slightly last month compared to September and now stands at 157,706, or 4.3 per cent of the workforce. While the actual number signing on fell by 3,726, or 2.3 per cent, the fall represented just 100 people when adjusted for seasonal factors.
The number of people out of work has risen by 11.2 per cent in the year to October 2002. This compares with a rise of 14.9 per cent to September this year.
Fine Gael's spokesman on enterprise, trade and employment, Mr Phil Hogan, said the figures confirmed "the downward trend in employment on a year-to-year basis".
He blamed Government failure to tackle the costs of insurance, energy and telecommunications, as well as poor infrastructure, for the rise since last year.
"It is now clear that the deterioration in the national finances can be explained by the reduction of tax revenue due to employers cutting labour costs," he said.
Labour's spokesman Mr Brendan Howlin said the figures were "bleak news just a month away from Charlie McCreevy's austerity Budget".
They came "just a day after damning Exchequer figures which point to the perilous state of the public finances.
"While the live register decreased in October, the seasonally adjusted figures point to the reality of the crisis of unemployment facing the country."