Government warned rise of Islamic terrorism one of the biggest risks facing Ireland
THE Government has been warned that the rise of Islamic terrorism and the possibility of Britain exiting the European Union are among the key risks facing Ireland.
The National Risk Assessment 2015 report also raised concerns over the “misalignment” of the Irish property market and the impact of the Greek economic crisis on Ireland.
The report said the country’s housing shortage was an “immediate issue of concern” which could have long term economic consequences.
It warned that rising house prices are making home ownership less attainable and this is increasing housing prices and feeding into the homelessness crisis.
“An important side effect is that a lack of housing and associated high prices and rental costs could affect Ireland’s attractiveness for inward investment and skilled migrants,” it said.
The review warned that the rise of Islamic terrorists, such as ISIS, leave Ireland open to a possible terror attack. An attack here could negatively impact on the country’s tourism industry the report stated.
“There is also the possibility that a state like Ireland would be used as a location from which attacks could be launched. Such incidents would be likely to cause extreme disruption in the short-term. More damaging might be longer-term reputational damage to Ireland as a safe and secure destination,” it stated.
The report said financial sentiment towards Ireland was improving but warned conditions could “unwind rapidly”.
It warned that “turbulence” in the eurozone could raise doubts about the long term sustainability of the monetary union.
It pointed specifically to ongoing uncertainty surrounding Greece and its relationship with international creditors.
The review found the public’s expectation of more tax cuts and public spending was a risk factor, and noted that tensions may develop due to restraints on the Government’s purse strings.
Low growth or bank losses in the eurozone could also result in the need for further recapitalisation of Irish lenders, the report warned.
It noted that the Irish banking system improved in recent months but said there is still serious concerns over the number of non-performing loans, especially in the Small Medium Enterprises (SMEs) sector and around household debt.
There was particular concern over an increase in the rising number of long term mortgage arrears case.
The review warned Ireland’s competitiveness is “under threat” and areas such as labour costs and a lack of highly skilled workers are undermining Ireland’s ability to compete internationally.