Jim Walsh (Fianna Fail)

I support Senator O'Toole's call for a debate on the economy and the serious issues which have arisen. We need to instil some semblance of confidence in the people that what we are going through is a cyclical — admittedly severe — global recession. It is unique to have a recession affect nearly every country in the world. However, we need to guard against what happened in Japan in the 1990s. Its economy had deflation and the authorities there tried to nurse the economy through a burst property bubble. As a consequence, the Japanese economy ended up static for nearly ten years.

Most economists are predicting that 2009 will be a particularly difficult year for all developed countries. Ireland will feel the pain and it will be much more severe than this year. There are serious issues pertaining to unemployment. One factor that will exacerbate these conditions will be a lack of confidence among consumers. Unfortunately, the deflation factor will mean that people holding off on purchasing houses, because they feel prices will fall further, will do the same for all spending. That has significant consequences for employment generally.