European partners 'key to recovery'
The scale of unemployment will not get any better for the rest of the decade under worse case scenarios drawn up by a leading think-tank.
The Economic and Social Research Institute (Esri), set up to help advise the government, also warns that austerity budgets could continue here until 2020 unless the wider European economy picks up.
The organisation has drawn up three outlooks for the medium-term future of the country, based on possible overseas events as well as home-grown efforts to get the economy back on track. They include a recovery, a delayed adjustment and a stagnation scenario.
Under the stagnation scenario, it is feared the European economy will not rebound in the near future, and as a result the Irish economy would struggle to grow at all.
The unemployment rate would remain the same into 2020 and further tough budgets would be needed until at least the same year to keep borrowing under control, the Esri predict. The current unemployment rate is 13.6% of the workforce.
In another potential outcome, the delayed adjustment scenario, the think-tank considers what would happen if the overall EU economy improved but action in Ireland failed to improve finances here.
"Such a scenario could see the economy seriously under-perform relative to its potential," the Esri says in its medium-term review.
Under these circumstances, researchers believe joblessness would remain at more than 10% of the workforce for another seven years, while more austerity measures would be needed to control government debt.
Finally, in the recovery scenario, the Esri says the Irish economy could grow by 3.5% every year until the end of the decade and joblessness would be more than halved. For this to happen, the European economy would need to rebound and the government would need to successfully bring public finances at home under control.
The Esri says it is crucial the government tackles long term unemployment in order to prevent a repeat of the 1990s.