Ireland edges closer to forming a new Government

After 18 weeks of political posturing, an agreement was reached between Fine Gael, Fianna Fáil and the Green Party today (15^th June 2020) to form a historic majority government in Ireland. The agreement ensures continuity with Fine Gael remaining prominent. Fianna Fáil, who supported the outgoing government in a confidence and supply arrangement, will join Fine Gael and the participation of the Greens has ensured a strongly Green-influenced mandate for the 5-year term.

While there are challenges to overcome, the plan provides opportunity for businesses and society to drive recovery, innovation, and growth during Ireland’s recovery phase. The programme must now be ratified by the membership of each of the three political parties. The results of this process are expected on Friday 26th June and, if ratified by all three, paves the way for the election of the new government by the end of June.

Ireland’s outgoing Taoiseach and Fine Gael leader, Leo Varadkar, has said there will be a rotating Taoiseach role as part of the deal with Fianna Fáil and the Green Party. As such, Micheál Martin will assume the role until December 2022, which will then rotate back to Varadkar.

COVID-19 has presented the global community with a grave set of challenges to add to the ongoing climate and biodiversity emergency. Ireland has been no exception to this and so, the Programme for Government demonstrates a clear ambition to repair some of the damage that has been caused by the pandemic. In what is termed as a, ‘defining moment’ for our country, some of the key themes include:

Environment

• The Government will set a target to decarbonise the economy by 2050 at the latest and make the adoption of five-year carbon budgets, setting maximum emissions by sector, a legal requirement.
• Establish the Climate Action Council on an independent statutory footing and ensure greater gender balance and increased scientific expertise in its membership. Update the Climate Action Plan annually and report progress quarterly.
• Work with the European Commission to advance a stronger National Energy and Climate Plan (NECP) for 2030 consistent with the ambition of this programme and recognise that Environmental NGOs play a key role in climate action policy.
• Respond to the OECD review of the Environmental Protection Agency and ensure that our legislative framework for licensing pollution is fit for purpose.
• As part of transport decarbonisation, the Government will work to legislate for e-scooters and e-bikes and require that all new urban buses be electric hybrid or electric.

Economy

• The Government commits to issuing a ‘July Stimulus’ package, which will comprise a series of immediate actions to support the economy to return to capacity will be published.
• In tandem with Budget 2021 (Ireland’s annual fiscal budget), the Government will bring forward a National Economic Plan to set out a long-term approach to restore employment. The role of the FDI sector and fostering innovation through digitisation will be key topics we will be engaging on here.
• They may also establish sectoral taskforces, comprising of Government, independent experts and stakeholders and chaired by line ministers, to focus on the specific needs of sectors and bring forward plans in the context of the National Economic Plan.
• To convene a SME and State Bodies Group to be chaired jointly by the Minister for Finance and the Minister for Business to coordinate the Government’s ongoing response to COVID-19 for SMEs.
• To commence a high-level review of the Irish economy led by the Department of the Taoiseach to identify the sectors, which have the greatest opportunity to grow and sustain quality employment in light of the continuing public health crisis, resulting geo-political trends, as well as the long-term challenges of the climate crisis, technological disruption and future public health challenges.

Digital Transformation

• The government will publish a National Economic Plan in October which will outline Ireland’s long-term recovery.
• The development of a National Digital Strategy will drive digital transformation in the public service and develop Ireland’s leadership in new digital technologies such as cloud computing; data analytics; IoT and AI.
• A National SME Growth Plan will map out a long-term strategic blueprint beyond Covid-19, with the government encouraging partnerships with large corporations to support SMEs to recover and expand.
• Efforts will also be made to increase digital literacy among citizens and businesses and the Government commit to supporting the Digital Single Market, whilst ensuring high data protection standards.

Please click here to see a full copy of the document. Should you wish to explore further or need advice on how to navigate the Irish political system, please do get in touch with Senior Managing Partner Lucy C. Cronin.