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Dublin: 2°C Saturday 27 November 2021

Troika sounds warning note about Ireland's unemployment rate

While the troika was happy with the continued implementation of the bailout programme, it warned that “unemployment remains stubbornly high” and turning into a long-term condition.

A queue at a social welfare office in Dublin in 2012.
A queue at a social welfare office in Dublin in 2012.
Image: Niall Carson/PA Wire

THE NINTH REVIEW by the troika of Ireland’s implementation of its bailout conditions has found that it “comfortably met its 2012 fiscal targets”.

However, the review – compiled by staff from the European Commission, European Central Bank and International Monetary Fund – sounding a warning note about the rate of unemployment here. The review read:

Unemployment remains stubbornly high, and is increasingly long-term in nature. Reducing it must remain policy priority.

It forecast that even if there is a revival in fortunes for the private sector this year, the best the government can hope for is that the unemployment rate decline “gradually”. A quicker decline is “hindered by the prevailing significant skills mismatches among the unemployed”.

They proffered a possible solution:

  • Redeploying civil service staff in the areas of employment and training to case manager posts to advise and help unemployed people to get adequate training and prepare them for jobs in the private sector;
  • Speeding up the implementation of investment projects, which should be funded by the European Investment Bank, the National Pension Reserve Fund, private investors and by the sale of “a portion of State assets”.

The troika noted that market conditions for Irish bonds had improved with “benchmark 8-year yields now below 4.5 per cent”. It did warn that this market confidence remained “vulnerable” because of the overall level of public and private debt.

It is now talking about how to support a sustainable exit from the bailout – Ireland has drawn down 84 per cent of its bailout funding – but said that on a larger scale, Ireland had maintained its “strong track record of programme implementation”.

Read TheJournal.ie’s extensive coverage of the IBRC promissory note situation>

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