Irish economy set for ‘strong rebound’ says Donohoe

Minister says national recovery plan will be implemented after summer

Minister for Finance Paschal Donohoe: “We need to work hard to come up with a relationship with the UK, EU and Ireland that recognises that we still have so much in common.”

Minister for Finance Paschal Donohoe: “We need to work hard to come up with a relationship with the UK, EU and Ireland that recognises that we still have so much in common.”

 

The Irish economy is set for a “strong rebound” Minister for Finance Paschal Donohoe said, provided Covid developments and risks were managed.

Speaking at the German-Irish Chamber of Industry and Commerce’s webinar on financial markets in Ireland and Europe, Mr Donohoe said he was optimistic about the prospects for recovery both in Ireland and the euro area, despite the challenges posed by the public health emergency.

He said Ireland would be adopting a national recovery plan, probably after the summer, to accelerate recovery from the pandemic.

“Our challenge is how we turn that rebound into a more durable recovery, and recovery that is more inclusive,” he said.

Pillar

Mr Donohoe said financial services were an essential pillar of the modern Irish economy. “It has been from a jobs and investment point of view a really essential element in our recovery after the global financial crisis,” he said.

“We will continue to place really high value on it as we map our way to a more sustainable recovery from 2022 onwards.”

Digital finance and fintech would play a more important part of financial services in Ireland, along with green and sustainable finance, Mr Donohoe said. would play a more important role in financial services in Ireland than in previous years, he said.

Looking ahead to the proposed changes to global corporate tax rates, Mr Donohoe said he would make the case for small economies such as Ireland.

“I said that now for a long time this moment is coming, and the moment has arrived. The larger economies. . . are making the case now for a minimum effective tax base. I’m going to continue to make the case for a small economy like our own, and other economies will be doing the same and other finance ministers will be doing the same, for their economy,” he said.

“We are going to have a statement of broad principles on this from the OECD within the next couple of weeks, and then that can lead probably to a broader, more technical agreement, in the second half of this year, which may be mirrored by what happened in the US.

“What I will do and work with the government on, and work with investors in with the Irish economy, is getting the balance right between Ireland wanting to be part, ultimately, of a final agreement that is being implemented, but making the case for the role of smaller and medium sized economies.”

He said it was a complex situation and a “demanding agenda”.

Brexit

“I still believe in whatever the future does bring that we will have to measure all of it, and we will continue to find ways that will ensure that the Irish economy and our country is competitive.”

Referencing the ongoing situation with Brexit, Mr Donohoe said the consequences of Britain’s exit from the EU to Ireland’s recovery would continue to be important. However, there was a need to strike a balanced relationship with both the UK and EU.

“We need to work hard to come up with a relationship with the UK, EU and Ireland that recognises that we still have so much in common, but also reaches equilibrium between the protection of the single market, and trying to come up with a good and positive trading relationship with the UK,” he said.

“That’s a real challenge but one I believe we will rise to. We are going to have much work that we will need to do in the coming period to meet that challenge.”