The risks to Ireland’s economy took centre stage in the election campaign with outgoing Coalition partners Fine Gael and Fianna Fáil both highlighting the issue as polling day approaches.
Fine Gael’s Paschal Donohoe has said Friday’s general election matters economically “like no other in my lifetime”.
He said: “We are seeing instability grow across the world, we are at a time of wars, we are at a time at which the consensus on trade and tax is changing.”
Mr Donohoe, Minister for Public Expenditure, was speaking to reporters outside Microsoft’s offices in Dublin as his party seeks to refocus voters on the economy in the run-in to Friday’s vote.
Election 2024: Who will be in next government? Test the options using our coalition builder tool
The Irish Times view on the year in politics: turbulence and continuity
Martin and Harris must now jettison the frothy promises and focus on the essentials
Eamon Ryan: ‘If Labour and Soc Dems were ambitious on climate, they’d be going into government’
He said investment in public services could only happen with safe public finances and in an economy that was stable.
“What kind of Government do we want when the costs and risks of (economic) instability are growing,” he said.
Elsewhere, Minister for Finance Jack Chambers was asked if Fianna Fáil would raid the two sovereign wealth funds set up by the outgoing Government in the event of an economic downturn.
He said Fianna Fáil wanted to protect the funds but indicated that contributions might have to be scaled back in such circumstances.
Mr Chambers said “current projections” from the Department of Finance are that Ireland “will continue to have significant budgetary surpluses over the next number of years based on a growing economy at full employment.”
Mr Chambers said that under his party’s plans the funds are expected to grow to €50 billion by 2030.
However, he also said: “Obviously, if there’s a serious contraction in the Irish economy, that has an impact on what’s available to put into the two respective funds and the legislation sets out the considerations that the Minister of Finance has to make”.
He said Fianna Fáil wanted to “protect the Future Ireland Fund and continue to run budgetary surpluses and we would adjust any tax or spending decisions to protect the Irish economy if there was a contraction.”
At a press conference where Fianna Fáil launched its cost-of-living election pledges Mr Chambers was also asked whether he was more worried about the prospect of incoming US President Donald Trump introducing new trade tariffs or cutting corporation tax to match Ireland’s rate.
He replied: “Obviously, the Trump presidency has brought greater focus on tariffs and on changing global tax environments” but said this is something that’s been discussed “for many months” along with deglobalisation and its impact on Irish economy.
He said there have been Department of Finance reports on that “and the potential disruption” it could cause.
Mr Chambers said it was on this basis that the Government established the two funds.
He said: “the Trump presidency presents risk when it comes to Ireland as an open trading economy, and that’s why the engagement between the incoming US administration and the European Union in the context of trade will be centrally important”.
He added: “we know from the last Trump presidency that not everything that was said in 2016 [during the US presidential election campaign] was followed through on and actually a lot of Irish trade grew, in many instances, with the US.”
He said Ireland is “cognisant of the risks” but that it is not only from the US, raising issues within the European Union as well.
Mr Chambers said: “that’s why we have to take a responsible approach” which he said includes reducing Ireland’s debt, continuing to run budget surpluses, promoting full employment and competitiveness and addressing infrastructure deficits.
- Sign up for push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Listen to our Inside Politics podcast for the best political chat and analysis
- Sign up to our Inside Politics newsletter to get the behind-the-scenes take direct to your inbox
