‘No premature withdrawal’ of Covid supports, Donohoe pledges

There will be "no premature withdrawal of budgetary support" for the Covid-impacted workers and businesses, Minister for Finance Paschal Donohoe has said.

Echoing the Eurogroup’s statement from last week, he said looser public spending policies to counteract the economic damage from the pandemic would stay in place until recovery was under way.

“To date, budgetary policy has proven to be both very effective and agile. It will need to remain flexible so as to win the battle against Covid-19,” Mr Donohoe told an event hosted by the Dublin Economics Workshop.

Eurogroup ministers signalled supports could remain in place until 2022 if necessary.

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Mr Donohoe, who is president of the Eurogroup, said he was not in a position to signal when the current restrictions here could be eased as this depended on the course of the virus and the vaccine rollout.

“While the figures have stabilised, they’re not stabilising at the lower level that we would have hoped for,” he said.

The National Public Health Emergency Team on Sunday reported 769 cases amid concern that case numbers appeared to be stuck at about 500-600 per day.

Mr Donohoe said Ireland was roughly in the same position in terms of case numbers as it was last November.

Serious misstep

The Government’s decision to ease restrictions in December has come to be seen as a major misstep that led to a rapid upsurge in cases after Christmas.

“The change is going to be gradual and cautious,” Mr Donohoe said. Finding the equilibrium between protecting health and opening up the economy was a challenge, he added.

Maintaining that balance, however, would improve as the vaccine rollout continued into the second quarter, but he warned “ the next set of decisions are going to be very carefully taken”.

Mr Donohoe said indebtedness was an inevitable by-product of the exceptional supports being administered by EU governments.

“We will get to a point [in the future] when indebtedness and deficit management become pre-eminent again but we’re not at that point now,” he said.

"We face a virus that uses the same qualities we rely on in Europe to infect; our interconnectedness, our interdependence and our interconnectivity."

“Nobody expected a shattering global pandemic, but through Eurogroup and beyond we have the political processes and structures in place to support one another,” Mr Donohoe said.