Public sector jobs cuts are set to be implemented across European countries due to the economic crisis enveloping the continent, according to Andrew Harker, economist at Markit.

As Ireland receives a €85bn (£71bn) bailout this week, Harker told Recruiterthat public sector employment is set to fall across the board.

“The problems we are seeing in the Eurozone and in Southern European countries such as Spain, Portugal, Greece and of course Ireland, are due to the weakness of these economies over the past few years. They have a lot of public debt.

“The problems vary between the countries: Ireland and Spain had particularly strong housing market collapses - their banks were hit hard by that. In Portugal and Greece, their economies were uncompetitive anyway, so when the recession hit they were not best placed to deal with that. What they all have in common is they are under pressure to reduce their deficit from the European authorities and the bond markets as well.

“Where they have to reduce their budget deficits, the governments are bringing in public sector cuts and pay freezes. Public sector employment will fall across a lot of European countries. When a government has to reduce its spending, an easy way is to cut public sector spending on jobs - it saves money immediately.

“This will filter into the private sector. If there is less government support, construction projects, for example, become less available. Sentiment within the economy suffers as well, so there is a lot of uncertainty in those peripheral countries such as Spain, Portugal, Ireland and Greece. There is a lot of uncertainty around how these countries will cope over the next few years.

“The biggest problem for the UK is the Eurozone, our largest trading partner. The weakness of the Eurozone economy will be bad for the UK economy if we are trying to export goods to Europe. We do need to export to Europe where possible. We have the advantage of not being in the Euro, so we can devalue our currency though.”