Pandemic will cause ‘divisive’ inequality, Varadkar warns

The economic effects of the pandemic have hit young people working in the private sector and precarious employment hardest, Tánaiste Leo Varadkar has said, warning of a “coming economic crisis” that could be “very divisive” for the country.

And an official report has warned that emergency legislation dating from the 2008-2011 economic crash would need to be kept in place, although new Minister for Public Expenditure Michael McGrath confirmed yesterday that the Government intended to proceed with public sector pay increases in the autumn.

Mr Varadkar was speaking during a virtual event hosted by the Washington-based Atlantic Council, which was also addressed by the prime ministers of Serbia and Luxembourg.

“For us the economic situation is very worrying,” he said. “If you include subsidised employment and government schemes and so on, we’re well over 20 per cent unemployment now – we had full employment in February – so it’s a very serious economic crisis and one that’s very unequal.

“It’s the private sector workers who have lost their jobs – whereas the public sector did not – and maybe younger people and migrants in precarious employment who lost their jobs, whereas people working for big companies, multinationals, in the professions, in the public service, have been largely unaffected financially.”

“The country was very united during the pandemic. The economic crisis that is coming could be very divisive,” he said.

Public finances

Separately, an annual review of financial emergency legislation signed by Paschal Donohoe just days before he left the role of minister for public expenditure and released on Tuesday said the pandemic had resulted in an anticipated €25 billion deterioration in the public finances this year.