Government 'must double savings'
Published 21/10/2010 | 00:22
The Government needs to double its savings to a massive 15 billion euro over the coming years to meet its own targets, a stark forecast has warned.
A leading think tank said previous estimates that 7.5 billion euro would have to be raised through tax hikes and spending cuts were wide of the mark.
The Economic and Social Research Institute (Esri), set up by the Government to analyse the economy, also predicted 10,000 more people would join the dole queue next year.
Another 60,000 people would be forced to leave the country to look for work with no prospect of any improvement for at least the next four years, it said.
Prof Alan Barrett, research professor with the Esri, said plans to slash the amount of money the country borrowed to European Union standards by 2014 would stymie any prospect of a recovery.
"The outlook is pretty bleak," he said.
"Under an austerity programme where they attempt to take out 15 billion euro (in savings), we think that will reduce economic growth in the years ahead."
Prof Barrett said unemployment may come down slightly, from the present 13%, but that it would remain at more than one in 10 of the workforce until 2014.
The Esri said current targets were "worryingly ambitious" and that it would have been preferable if the Government extended its deadline for deficit cuts to 2016.
The extra two years would have made a significant difference by giving the economy more time to recover and shaving two billion euro off the amount of savings needed, it argued.