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IRELAND FACES A 1930s-scale Great Depression if action is not taken to quell the crisis in the eurozone, an ESRI economist has warned.
Joseph Durkan, associate research professor at the economic think tank, said even though Ireland is doing what we’re “supposed to do” to cope with the downturn, problems in the eurozone could send the country into a catastrophic economic spiral.
He warned that unemployment could rise to 20 per cent if action is not taken.
Durkan’s comments came as the ESRI dramatically cut its growth forecast for Ireland for next year. GDP is now expected to grow by just 0.9 per cent, a reduction from the think tank’s previous forecast of 2.3 per cent.
Meanwhile, GNP is expected to contract by 0.3 per cent. The ESRI said slowing growth in exports would not be sufficient to counterbalance government austerity measures and continuing weak demand at home. Three months ago, GNP had been forecast to increase by 0.7 per cent.
Disposable incomes will continue to fall across Ireland next year, the think tank warned in its latest Quarterly Economic Commentary. This is likely to have a knock-on effect across the retail and service sectors, with consumption forecast to fall by 1.5 per cent.
The figures mean a significant knock-back from relatively good conditions this year, in which GDP is expected to grow by 2.2 per cent and GNP by 1.2 per cent.
Speaking on RTÉ’s Morning Ireland, Joseph Durkan said the slowdown was largely due to events beyond Ireland’s control. “We’re doing what we’re supposed to do, but the world around us is falling apart,” he said. “The truth is we don’t know how bad it’s going to be yet.”
He said the ECB needed to move away from “half-hearted bond buying” and take decisive action to reassure markets. “What they should say is that they will do whatever is needed [to rescue countries in difficulties]. That would give the markets an entirely different view.”
He said the prospect of another Great Depression was real, and that this was the “spectre” that he hoped would force governments into taking real action.
More good news to wake up to.
Deep breaths everyone, this is the era of gloom and doom merchants, some of them making a very good living out of it.
I hardly think so Sean C. That smacks of Bertie’s famous ‘suicide’ comment.
The head in the sand attitude to this meltdown is incredible and is widespread. The ECB attitude so far has been nothing more than a hole patching exercise without any attempt to change the wheel.
The Euro experiment is on it’s last legs, there is no combined or unified principal to deal with this and it’s a finger pointing exercise between countries. Good bank/Bad Bank. Good country/Bad country. Core/porifioral. PIGS – all that silly nonsense compounded by the ‘ratings agencys’ crap about tripal A’s and stuff.
It’s nonsense and has nothing to do with getting this mess sorted.
Be careful what you wish for…
How much is a ticket to Australia? Seriously
Let us know if ya find out.
In what currency?
I don’t understand why people are accepting what the government are doing while Bertie and his friends are getting 6 figure pensions well before the pension age.
Bertie must have 10 journal.ie accounts, lol
Take this man seriously, the ESRI are never wrong. Now, where did I park my flying saucer?
Why do you think what the government is doing is going to make things better?
They’re doing what they’re “supposed to do”. That’s what got me.
Yikes…
Well our grandparents survived so we will too… bugger their stupidness and procrastination…
For f** k sake don’t let an accountant spoil your day. Get up and get on with it. Remember all problems are transient, this too will pass.
So will we all just get on with it until everyone is on the dole?
We need this to pass sooner rather than later. That’s why we need to do something about it now rather than just getting on with it like we have been doing while things keep getting worse.
We should have built bertie bowl, could have renamed it dust bowl!
Take with a pinch of salt. I heard the interview and he appeared to be giggling throughout?
That was Richard Bruton.
Cancel Christmas!
That’s not even funny.
Feeling very sad this morning with the news . What they should do turn on the radio in the dail so they can here the hardship people are in and stop shouting and blaming each other and do some good work for the huge money the earn.
Now depressed! Any cheerful news this morning?
It’s Christmas soon, well I hope that’s good news for everyone!!
It isn’t just Ireland. An economic crash is imminent and there is no sustainable political solution.
Government needs to radically cut spending to sustainable levels.
Tax take will collapse irrespective of tax rates.
Error of depending on FDI/multinationals excessively for growth will soon be exposed.
Ireland needs an economic driver for growth to allow economy to emerge from downturn and would do well to look to agriculture.
http://newfarm.rodaleinstitute.org/features/0303/newzealand_subsidies.shtml
I agree with that – the globalised system is coming apart at the seams …. feels like the last days of the American Empire.
We need to look boost domestic industry, agricultural or otherwise, this idea that the multinationals are our only hope needs to be ditched.
I partly agree Niall.
We do need to boost what’s left of our national economy and natural resources (what’s left of them). That crazy nonsense about selling Coilte to put more money in the fire astounded me! Our fisheries have been neglected to the point of almost total wipe-out. Our agriculture is an industry run by old men. Tourism has almost been ruined by the proliferation of bad planning throughout the countryside and poor service and bad value in hotels and restaurants.
It is not towards Europe or the ECB we need to look to to sort this out (they’ve dragged their feet for long enough) the solution is at home whether with or without the Euro.
And please. Stop electing gobshites!
Help! I work in the retail sector, today. Tomorrow? Who knows….
is this the same ERSI that projected in 2008 that GNP growth at “an average of around 3¾ a year” between 2008 and 2015, and claimed their “analysis suggests that, even if the current downturn were to be more severe than anticipated, the economy would eventually recover more vigorously to realise the medium-term growth rate”. The ESRI reassured the public that “the Irish economy is resilient” and “the fundamentals of the Irish economy are sound.. Dopes.
Are we paying these guys? Where were they when the last government and their banking cohorts put this country in this mess? They ooze negativity, and have nothing new or positive to add to the solution. I must check out if they are on the list of Quango’s for the chop.
There’s only one thing left to do. The very last thing the banksters wouldn’t let us do. The one thing they said would put us into a depression for years to come… Yes that right… DEFAULT. The only reason they don’t want us to default is because they lose control over our Muppets in Leinster House…
Don’t worry we haven’t considered selling turf yet oops we can’t even cut it anymore to keep warm. Bureaucrats
No, Irish people. Irish people handed over most of their laws and rights to the Bureaucrats in successive EU Treaties
Were them the same treaties we voted no on?
So he hopes the prospect of another Great Depression will force the government into taking ‘ real action ‘ And what would that be exactly ? More austerity measures that will take more money out of the economy, raise unemployment and bring about another Great Depression ! !
Dr.Doom and Gloom
:-(
He makes the Grim Reaper look like Santy Claus.
If the rate of application if the austerity programme is not slowed down, small businesses will tumble even more in the New Year. A lot of these experts never get outside the big city and see what life is like in rural towns.
Certainly in retail! No retailer is going to pass in this 2% VAT increase. Retailers have already reduced prices and offering discounts to customers. It’s a cynical increase on governments behalf as retailers can’t collect it but they’ll have to pay it. Rents not going down tho nor other expenses. Cynical and lazy!
Ahhh the emerald isle isn’t it just fantastic!
You really couldn’t have picked a more smug looking photo…I’m impressed!
In Waterford City and the surrounding county unemployment already is at 20 per cent so I dont know why he’s talking about down the road. Hopefully its not a case of the resting of the country catching up.
He is also on a big Fat wage.
One thing we need to get our heads around is The Government. How we elect these people and what they stand for.
This party stuff is total nonsense. Get real! There are talented politicians in FF and FG and Labour we just need to be able to tell the difference. FF messed up and damn their eyes for it. Some rats carry disease and plague but other rats keep the drains clear. Learn to know the difference!
Well said John. Time for a real republic where representatives are answerable to the electorate. Not hiding behind a fecking whip.
Term Limits !
Another? Aren’t we in one already??
I remember George Hook on newstalk at the start of this collapse saying he didn’t want to see his grandchildren queing up at soup kitchens, it sounds less dramatic and improbable now.
These fat pensions should be suspended untill pension age rather than cut.
isnt it amazing that these facts came to light just before a severe budget? just to put us in the proper frame of mind to accept that budget? surely not
People starved during the great depression – bodies are buried along route 66 by desperate people trying to get to california to find work as fruit pickers where they were mercilessly exploited by the wealthy landowners backed up by the police. Food was thrown into the rivers while people starved to keep the prices up.
Why does the taxpayer pay this man and his department?
Up to very recently he predicted growth – the whole world knows for some time that the world economy is struggling and even China is is in trouble. Yet this man (paddy the Irishman) thinks we will grow our economy by .5% possibly. His contribution to government and continuing contribution may account for some of the bad decisions being made on our behalf. The ESRI have yet to get the forecasts right. Will he be fired – never. Give him a good bonus and a big pension while the ordinary man knows what’s ahead and is emigrating. Will any of his staff be going abroad to work ? Why would they when we can now borrow more go pay them for more duff information.
Well there is no fear of them politicians , they won’t suffer at all, with their big pensions and all that stuff !!!!!!!!!!
Term Limits and no pensions !
There is speculation that Merkel wants to bring it to the brink and pull back at the last minute – its a game of chicken strategy to get the troubled economies in line before giving in and it also gives her time to bring the German public around to the idea….
have your say