Joan Burton (Dublin West, Labour)
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Question 56: To ask the Minister for Finance his views on the latest ESRI quarterly economic bulletin and, in particular, their forecast that unemployment will average 16.8% by the end of 2010 and GNP will fall 13.5% over the 2008-10 period; and if he will make a statement on the matter. [19129/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In the recent budget, my Department projected that GNP would contract by 8% this year and by 2.8% next year. Combined with the 3.1% contraction which was recorded last year, this implies a cumulative decline in national income of almost 13.5% over the 2008-10 period. In other words, over the period there is virtually no difference between my Department's assessment of aggregate national income trends and that of the ESRI.

In terms of labour market developments, the recent budget is based on the assumption that employment will fall by 7.8% this year and by a further 4.6% next year; this is the equivalent of a quarter of a million job losses between this year and next. As a result, an average unemployment rate of 12.6% is projected for this year, rising to 15.5% next year. The ESRI assessment is somewhat more pessimistic, with the unemployment rate assumed to average 13.3% this year and 16.8% next year. However, I point out that the latest data show the unemployment rate to have been 11.4% in April so that, in the absence of data revisions, an average figure of 13.3% for this year seems excessively pessimistic. Although they are not designed to measure unemployment, trends in the live register can provide a more up-to-date indication of trends and in this regard the latest figures provide tentative evidence that the rate of increase has slowed down somewhat.

With regard to next year, it should be noted that the ESRI projection for unemployment is at the upper end of the range of forecasts. The current consensus among economic forecasters is that the unemployment rate at the end of 2010 will be 15.4%. Focusing on minor differences among the various sets of economic forecasts misses the point. We are in for a very sharp fall in economic activity and unemployment has risen sharply as a consequence.

In broad terms, the Government's response to the rise in unemployment consists of both demand and supply side elements. We are working to improve our competitiveness and achieve export-led growth, thereby boosting the demand for labour. At the same time, we are investing in education and skills so that those who are losing their jobs in contracting sectors of the economy are able to secure employment in new, expanding sectors. In the recent supplementary budget I announced a range of activation initiatives which will go further to encourage individuals into employment.

Joan Burton (Dublin West, Labour)
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I thank the Minister for his reply. What is his opinion on the EU Commission forecast that the fiscal deficit will reach 15.6% of GDP in 2010? Does the Minister accept this comes as a result of depressed demand and soaring job losses?

What I find difficult to understand from the triumvirate in charge of the country, namely, the Taoiseach, the Tánaiste and the Minister for Finance, is that none of them seems to have any imagination concerning what unemployment figures of 380,000 - possibly heading for 500,000 - will do to Irish society. The Minister mentioned some measures he included in his budget but even judging by the record of FÁS these amount, at most, to about 90,000 places on various initiatives. Does the Minister expect to have any serious offer for people who are losing their jobs, particularly young well-qualified graduates?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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First, the European Commission forecasts were issued on 4 May and predict GDP to contract by 9% in 2009. Concerning its forecasts on the size of the deficit, the Commission warmly welcomed the recent budget introduced here and was very supportive of it. Both the Commission and the chairman of the Finance Ministers at Eurogroup have praised the approach taken by this country with regard to budgetary matters. The Commission, the European Central Bank and the Council of Finance Ministers made very clear to me that they believe the Irish Government has taken the correct course of action given the scale of the difficulties we face. That has been made abundantly clear in recent days and it is important we notice that, as a country. It means that international confidence is being restored in Ireland and that is very important.

I was asked about the awareness of Government - which, I am glad to advise the Deputy, is a collective entity, comprising 15 members - of these difficulties. First and foremost, the Deputy questioned whether the Government recognised the gravity of the social crisis facing Ireland. In addition to the financial and banking crises, there is a very severe social crisis caused by the increase in joblessness. That is why the Taoiseach has continued to engage with the social partners to see whether they can work towards a common approach in addressing this social crisis. In addition, various measures were announced in the budget, including the stabilisation fund for enterprise and the various job training opportunities. These go only some of the way, as Deputy Burton pointed out, and clearly we must deepen and intensify such approaches.

Joan Burton (Dublin West, Labour)
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I met people on the way back from Killarney where the Minister had addressed a credit union conference. He boasted that Irish people took pain that would cause riots in other countries. Where are the Minister's measures to deal with the 90,000 or so graduates and the additional tens of thousands of qualified apprentices? These are not unskilled people but have high levels of training and have been educated to a high level. What has the Government got to offer them and their distressed parents? They see their brilliant children, who have achieved academically and in apprenticeships, being offered nothing by this Government.

The Labour Party has put forward a series of proposals, including a graduate and apprentice internship system, while the Minister's Government has offered nothing. Is the Minister prepared to read the Labour Party's programme and to take on some of our ideas? We proposed that European Investment Bank funds for small and medium industries and enterprises should be utilised but so far this has been taken up to only a tiny degree although it is a €30 billion programme across the EU. We suggested a much bigger stabilisation fund than the small one the Minister announced he would start. We proposed a series of other initiatives to get people back to work but there has been no meaningful response from the Minister or from the Minister for Enterprise, Trade and Employment. They seem to be asleep on the job

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Far from it. First, with regard to the pain I acknowledged to have been taken in this country, I was certainly not boasting about it. I was pointing out-----

Joan Burton (Dublin West, Labour)
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That is what the people in Killarney thought.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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That is not what the people in Killarney thought.

Joan Burton (Dublin West, Labour)
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That was what they told me.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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That is the construction the Deputy wishes to place on what I said. A large number of delegates came over to me, thanked me and said, "Thank God, there is hope for this country".

We must face facts here. A huge burden of adjustment must take place in order that our economy may become competitive. What is exciting the admiration of other European countries is the fact that we are prepared to take on that burden. Our unit labour costs are no longer the highest in the eurozone but now lie behind one country. We must face facts if we want to be competitive. That is all I rightly wished to draw attention to because I believe it is important that Irish people understand the course of action we are taking. We are making ourselves more competitive, adapting our work practices and making real sacrifices in terms of the income we pay ourselves during the present period. All these initiatives, taken by many Irish people in their places of work around the country, are improving our competitiveness and generating international attention. That is very important if Ireland is to be put on the right track.

Deputy Burton raised the question of EIB funds. I was present at a ceremony in Dublin some weeks ago where these funds were committed to the Irish banking system and are now available-----

Joan Burton (Dublin West, Labour)
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How much?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I understand it is a substantial sum.

Joan Burton (Dublin West, Labour)
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It was a tiny amount, €30 million.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is in excess of that. This is the sum-----

Joan Burton (Dublin West, Labour)
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The Minister should tell us the amount. He was at the event and must know what it is.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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These are the sums the European Investment Bank has made available to us.