Difficult to see why any party would want early election

Seismic local and Euro ballots suggest the main Opposition parties would dearly love to face an early Dáil election. But the economic statistics - the rising live register and the monthly exchequer returns and all the other hard evidence of a troubled economy - suggest Fine Gael, Labour and Sinn Féin should not be wishing for a general election next year. A rally for global stock markets extending into its fourth month appears to anticipate that the world economy will start to grow again, or at least stop contracting, in the early part of next year. Even the Irish stock market, along with the remaining stock market-listed banks stocks, have rebounded at least 50 per cent from the low levels plumbed in the first week of March. Then there are also tentative hopes that the major economies are approaching some sort of trough, after which, recovery can get started again. Last time, in 2000, a much milder downturn from peak to trough in the euro area took over two-and-half years to run its course and international economists suggest the severe recession may, after all, follow this conventional path. The prospects of a sharper than anticipated rebound in the US sparked hopes that the slide here will be cushioned, and exports will pick up, consumers will start spending again and confidence will be restored to help stem job losses. However, the famous green shoots are being looked for in the unlikeliest of places. Statistics are again being stretched to purportedly show that things may not slide as quickly as feared. There is no doubt that the economic prospects are not as grim. After all, it was only a few months ago that big international companies were switching billions of euro from Dublin-based banks. They feared the international debt markets would refuse to lend the Irish Government the money it needs to plug the gap in its spending this year and next. Undoubtedly, things have dramatically improved and have retreated from the abyss at this stage. But the fundamentals of the economic disaster remain. The Irish economy has, along with Britain, been among the most damaged in the world by the bursting of the twinned property and banking bubbles. The National Asset Management Agency (NAMA) will still be around for 15 to 20 years clearing up the mess, suggesting that taxpayers will be paying out to make good the huge mistakes of the banks for many years to come. Some have searched for the green shoots in the latest monthly official figures. First, the latest live register figures were said to show a slowdown in the rapid month by month increase joining the count. In May 2008, the live register broke through the 200,000 level for the first time in many years, suggesting the unemployment rate was then hovering around 5.5 per cent. The pace of job losses was, even then, before the destruction of the banks, starting to accelerate. A year later, the numbers on the live register have more than doubled to surpass 400,000 and the implied jobless rate was almost 12 per cent. A year ago, the monthly increase was running at 7,600. In May, though, increasing at a slower pace than recent months, the number of people joining the register jumped 13,500 in the month when seasonal factors are taken into account. The live register includes people who are working part-time and in causal employment. Here, too, the figures have leaped to over 66,000 at the end of May from about 10,500 a year ago, indicating that many households who have lost full-time employment now rely on benefits to supplement lost income. So, no sign of green shoots there. Significantly, there is no sign that economists have revised their forecasts for peak unemployment. The predictions still suggest that the jobless rate will get worse and reach 16 per cent to 18 per cent at the end of 2010 or in 2011. That is a lot of people who will still lose their jobs over the next year and a half. The latest exchequer figures for Government borrowing and spending have also raised hopes that the pace of deterioration in the economy has slowed, as the three big sources of taxes - VAT, income and excise duties - came in close to official targets. The VAT receipts which, in this recession, are a leading indicator of confidence and, of course, in spending activity, are still €1.4bn less than collected a year ago. However, anybody looking for green shoots in the monthly exchequer returns are seeking for straws to clutch. It is accepted that the gap between Government spending and revenues this year will reach as much as €25bn. However, next year, the Government is required by the European Commission and the international debt markets to narrow its continuing huge deficits - and taxes will need to rise and spending will need to fall in the December budget. If there is to be an early election, the economics suggest the Opposition parties should favour a general election after December. But the next budget for 2011, though less harsh, will also need to be tough. Difficult, then, to see why any Opposition party would wish to be elected as the governing party anytime next year.