It is time to look again at the key events and issues – those of which we are aware – that will dominate Irish politics over the next 12 months.

The single most important known unknown for politics in 2014 is the level of economic recovery. In Irish politics, as elsewhere, it is always “the economy stupid!” and in the aftermath of our exit from the bailout, economics matters more than ever.

Whether the improved economic circumstances continue to give rise to substantial jobs growth and ripple out across the country and the various sectors of the economy will very much determine the political context for the next 12 months and, indeed, for the next election.

It has being striking over the festive season to see such a range of economic commentators seeking to address the question of whether we can believe the positive indicators. The consensus seems to be that we can. The domestic mood is certainly more confident and the international environment is improving.

The political challenge for the Government, however, will be to ensure that sense of optimism is shared.

The key task will be to avoid a sense among some sectors – particularly those hardest hit by the economic crisis – that they are being left behind.

The second political known unknown for 2014 is the local and European elections in May.

The political spring will be dominated by a sequencing of national conferences and ardfhéiseanna as party leaders seek to set out their stall and showcase their candidates.

Fine Gael's election campaign will get a good lift in the first week of March when it hosts the pre-election congress of the European People's Party at the Dublin Convention Centre. This will be a political jamboree on a scale never before seen in Ireland, and will involve more than 2,000 leading right-of-centre politicians from across Europe, including Angela Merkel and a dozen other European premiers.

The Opposition's performance in the European and local elections will actually be more interesting than that of the Government. Governments traditionally lose seats in mid-term second-order elections, and in May this trend is likely to disproportionately affect the Labour Party.

The May elections could determine party leaderships as well as the de facto leadership of the Opposition overall.

Fianna Fáil is currently slightly ahead in most polls and, in theory, has a wider organisational reach. Sinn Féin, however, has been quicker getting its act together for these elections: it has, for example, already selected candidates for each of the European constituencies, whereas Fianna Fáil has not as yet been able to settle on convention dates.

Fianna Fáil's fortunes
The local and European election results will tell us much about whether there is a real recovery in Fianna Fáil's fortunes. The party has certainly revitalised and renewed itself sufficiently to sustain itself and recover some of its support. However it has yet failed to reinvent itself and that may explain why once the Government's popularity improved, as it has in recent months, Fianna Fáil slipped back some of the distance travelled in the polls.

Gerry Adams’s leadership of Sinn Féin will not be determined by this year’s local and European election results in the Republic. All the indications are that Sinn Féin will see a further incremental growth at local government level.

The issue at play around transitioning from an Adams-McGuinness leadership to a younger generation carries some uncertainty for Sinn Féin, and is likely to be shaped as much by political considerations north of the Border than by any comment from the Dublin media.

The May elections may also give a clearer picture of whether there is a gap in the Irish political market for a new political party. The figures for both "don't knows" and "others" in recent opinion polls suggest there is. The analysis presented on this page a few weeks ago by David Farrell and Shaun Bowler suggested that if there is no substantial Fianna Fáil recovery, this gap is in the centre.

There is also, separately, room for a reconfiguration of the smaller, Independent and formerly Labour elements on the left of the spectrum.

The locals, and to a lesser extent perhaps the European election, will reveal the extent of the appetite for alternative entities to the existing parties, and may also throw up some newly-elected personalities who might front any such new entities on the ground.

It is unlikely, however, that any new large national political entity will take clear shape this year. If anyone out there is thinking of launching such a project they would be better going public on it in the summer or autumn of 2015, just months before a general election in early 2016, rather than leave too long a period for their opponents to counterattack.

Cabinet reshuffle
Some time in the latter half of 2014 we will also have a Cabinet reshuffle. The Taoiseach's instincts on this will be conservative but the change in personnel and portfolios may have to be broader than he might wish, especially on the Labour side, where there is likely to be pressure for new faces at the Cabinet table.

Issues such as health and accountability and value for health spending will continue to feature strongly.

Political reform, or at least talk of it, will also be prominent in 2014, but the Government remains reluctant to do anything substantial about it.

Personal insolvency and concerns about the slow and/or limited take-up of the mechanisms provided for under the Personal Insolvency Act 2012 are also likely to bubble to the surface this year.

There will also no doubt this year be what British prime minister Harold Macmillan is said to have called "events, dear boy, events": unknown unknowns which could knock all projections for a relatively calm political year off course.