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April 1, 2009    

Ireland sees surge in unemployment

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by Kay Murchie

Ireland, which was the first country in the euro zone to enter recession, has experienced a sharp rise in unemployment.

New figures released by the Central Statistics Office (CSO) revealed that the number of people claiming jobseeker’s allowance surged by 87.5% in the 12 months to March.

According to the CSO, the number of people seeking jobless benefits rose by 173,279 to a record 372,800.

The rate of unemployment crept up to 11% in February - the highest level in almost 13 years.

Irish Prime Minister, Brian Cowen, said the figures were a “concern” and believes a fall in the unemployment rate is unlikely in the short-term.

The bad news comes just a day after rating agency, Standard & Poor’s (S&P) downgraded Ireland’s credit rating from AAA to AA+ and has put the Irish Republic on a “negative” outlook, meaning that further downgrades are possible.

S&P’s said it is concerned with the country’s banking system. Anglo Irish Bank is currently undergoing a fraud investigation, while Allied Irish Bank (AIB) and Bank of Ireland have been bailed out by the Government.

In response to the downgrade, Ireland’s Government said it is committed to restoring order to its public finances and is to announce an emergency budget next week.

The country has experienced a boom since the late 1990s, with multinationals arriving to take advantage of one of the lowest corporate tax rates in the euro zone.

The ailing housing market has had a major impact on the economy and property prices have plunged by 40% since their high in 2006.

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