Module Title: Business Economics
Module Code: EC291
Lecturers Name: Dermot Gallagher
The current recession has had a huge effect on every day Ireland, the Celtic Tiger years are a distant memory. Gone are the days of living beyond on our means and there are very few people left in this country who have not felt the growing financial pressures. When a recession hits, Unemployment figures increase enormously. We agree with the assignment statement, in that we feel that unemployment will remain high over the coming years and we will strive to prove this statement correct in the following ...view middle of the document...
When panic set in and with people losing their jobs, many fell behind on their mortgage payments, found themselves stuck with massive debts and negative equity. And what about the banks? Their problems have been well documented; Hidden loans were discovered in Anglo Irish bank, whilst the recapitalisation of Ireland’s two largest banks (AIB and Bank of Ireland) has cost the taxpayer roughly 3.5 billion each. Eventually the government had to seek ‘outside’ help, in terms of the bailout, which we will discuss later. The banking crisis has led to huge doubts amongst citizens of this country, and in turn the banks have reduced their capacity to sanction loans. This has led too many businesses being unable to expand due to lack of funding, which ultimately shows there is no confidence in the Irish economy at the moment. Without out proper funding, there is no capacity for growth, when the economy grows it creates jobs, but until this happens unemployment will remain high.
"The huge sums of money that have been put in by the government to support the banks, have not generated sufficient confidence yet. The money is enough objectively, but the confidence isn't there, and it's partly not there because investors are concerned in general about the government finances and the future prospects for growth and employment."
(Honan, Patrick, Central Bank Governor, speaking to RTE, 18/112010)
A huge factor in attracting multinational companies to these shores other than the low corporation was the fact that Ireland had gained a reputation of having a young, talented and well educated workforce. There is however, especially in recent years, arguments to suggest that the Irish workforce has somewhat stalled in comparison to other countries. There is no doubt that we have a dedicated workforce in this country, but is enough being done to continue and enhance Ireland’s reputation as one of the best around? Ireland’s national training agency in recent years had been Fás, but following the scandal which rocked Fás in November 2008, the government have slowly and surely been trying to shut Fás down and succeeded in doing so. With Fás being disbanded in July 2011, the government had an opportunity to build new training centers to cater for its workforce, but so far the only thing has changed is the name, Fás to SOLAS. This was a golden opportunity for the government to revitalise its workforce, introduce new skills/courses but so far the government have been slow to react to the ever changing demands of its people. With Ireland already having a highly established workforce, introducing those made redundant with new skills or courses could only help the unemployed find work and also help attract more multinational companies to Ireland.
In a previous paragraph the IMF Bailout was mentioned but here we want to find out exactly what the implications of the bailout were for this country, and ultimately what effects it had on the prospects of reducing...