Minister Donohoe announces additional funding of €2.25 billion for public capital projects out to 2026

The Government today (Wednesday), agreed revised capital allocations totalling €2.25 billion out to 2026. The National Development Plan (NDP) 2021-30 published in October 2021 set out €165 billion of funding to support capital projects across the country. As set out in the Summer Economic Statement (SES) 2023, an additional €2.25 billion was made available to be allocated in the 2024 to 2026 period.  This funding will facilitate the progression of important projects and enable more rapid development of key Programme for Government commitments, such the delivery of actions to fulfil our climate action plan commitments, the provision of more housing and enhanced education facilities.

 

Following the conclusion of a series of bilateral meetings which took place from January to March between the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe and his Ministerial colleagues, the distribution of the additional €2.25 billion across Departments has now been agreed.

 

The additional allocations of capital funding to 2026 will support key projects and programmes under the NDP such as:

  • Further delivery of immediate Public Transport projects such as Dart+, BusConnects and Cork Commuter Rail;
  • Additional investment in the Social and Affordable Housing programmes;
  • Further delivery of Student Accommodation through Universities;
  • Additional Acute Hospital Beds (in excess of 1,500 beds already funded);
  • Enhanced biomethane investment (in addition to ReCoverEU funding);
  • Regional labs investment and additional veterinary provision;
  • Upgrading of embassies abroad;
  • Funding the Level of Ambition 2 programme in the Defence Forces;
  • Public and Private Sector Retrofitting;
  • Enhanced Prison Service Provision and investment in Garda Capital; and
  • Further investment in the Local Improvement Scheme and Community Recognition Fund.

 

Individual Ministers and Departments will provide the detailed information on the projects or programmes that will be supported by the updated capital allocations to 2026.

 

On announcing the finalisation of the NDP ceilings process, the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe said: ‘I am pleased that the Government has today agreed to the allocation of additional funding of €2.25 billion for the National Development Plan up to 2026. This builds on the existing funding already available under the NDP and it will mean more schools, housing, transport and healthcare projects can be progressed and delivered for our people’. 

 

“I have worked very closely with my Ministerial colleagues over the past two months to reach agreement on the best way of distributing the additional funds. I believe that the allocations announced today strike a fair balance between the many competing demands that were made to me. The NDP is ambitious, with record levels of investment and today’s announcement will contribute in a significant way to the delivery of sustained growth and prosperity for our country.”

 

ENDS

Notes                                                                                                     

 

  1. National Development Plan 2021-2030

The National Development Plan 2021-30 (NDP) itself sets out the investment priorities that will underpin the successful implementation of the National Planning Framework (NPF), and wider Government policies. The overall funding of €165 billion for the lifetime of the National Development Plan out to 2030 was allocated on an indicative basis to each of the ten National Strategic Outcomes set out in the NPF. In addition, the NDP also set out 5-year expenditure allocations by Department for the period 2021 – 2025. The multi-annual NDP ceilings were devised to give Departments a degree of certainty for future planning.

As set out in the Summer Economic Statement (SES) in 2023, an additional €2.25 billion in capital expenditure is to be provided in the 2024 to 2026 period. The updated capital ceilings are detailed in the table below.

 

  2021 2022 2023 2024 2025 2026
  Capital Capital Capital Capital Capital Capital
  €m €m €m €m €m €m
National Development Plan 2021 9,784 11,115 11,857 12,826 13,600 14,200
Windfall Capital – SES 2023       250 750 1,250
Revised NDP Allocations 9,784 11,115 11,857 13,076 14,350 15,450

 

 

  1. Updated Capital Allocations to 2026

 

The updated capital allocations for 2025 and 2026 for each Ministerial Vote Group are set out below. These allocations have been informed by the ESRI report on the NDP, Departmental submissions and the bilateral meetings held between Ministers with the Minister for Public Expenditure, NDP Delivery and Reform, as well as meetings between officials across Government Departments.

  2024* 2025 2026
Ministerial Vote Groups NDP Core Capital (excl. Non-Core, EU funds etc.) Revised

NDP

Capital

Revised NDP

Capital

  € million € million € million
Agriculture, Food and the Marine 287               300        305
Children, Equality, Disability, Integration and Youth 74               140        180
Defence 176               215        220
Education 940            1,300     1,300
Enterprise, Trade and Employment 584               611        625
Environment, Climate and Communications 950            1,110     1,270
Finance 28                 28          24
Foreign Affairs 25                 35          35
Further and Higher Education, Research, Innovation and Science 620               670        725
Health 1,220            1,460     1,560
Housing, Local Government and Heritage 3,866            4,196     4,336
Justice 274               310        330
Public Expenditure and Reform 323               357        377
Rural & Community Development 201               210        220
Social Protection 16                 17          17
Tourism, Culture, Arts, Gaeltacht, Sport and Media 235               255        295
Transport 2,664            2,850     3,350
       
Other Funds:      
European Regional Development Fund (ERDF) 115               115        100
Shared Island Fund 150               150        190

* An additional €250 million was made available in 2024, and this funding has formed the basis of agreements with a small number of Departments to meet in-year pressures that are already evident or may become evident as the year progresses.

 

The table above shows the final agreed allocations which distributes all the available funding, including the €2 billion additional funding granted to capital in the SES last year. 

 

The above amounts honour and build on the committed uplifts in allocations to Ministerial Vote Groups under the NDP 2021-2030 published in October 2021. The allocations are also aligned with the funding commitments required to deliver the ‘Housing for All’ strategy over the coming years, and with other priority commitments of the Programme for Government including but not limited to: Health, Education, Transport and Climate action.

 

An independent evaluation of NDP priorities and capacity published by the ESRI in January 2024 has informed the updated capital ceilings to 2026. The ESRI report The National Development Plan in 2023-Priorities and Capacity provided useful insights in terms of the capacity to deliver current Government priorities in supply constrained and full employment economy. The NDP must respond to the need for additional capital expenditure but also not fuel further inflationary pressure in the wider economy.

 

 

Further Info:

  • In 2024, over €13 billion will be made available from the Exchequer for investment in public capital projects, which will provide more schools, homes, hospitals, road and public transport projects.  To put this into context, capital expenditure in 2024 will be almost €8.6 billion or 189% higher than the €4.5 billion allocated in 2017.  The overall level of capital funding is now at an all-time high, with a commitment to further increase investment in capital projects and programmes over the lifetime of this NDP.
  • Estimated capital expenditure as a percentage of GNI* is anticipated to be 4.3% in 2024.  As a percentage of national income, annual capital investment is among the highest in the EU and well above the recent average of 3% of national income. 

 

Eurogroup President, Paschal Donohoe, travels to Lithuania

President of the Eurogroup and Minister for Public Expenditure, National Development Plan Delivery and Reform, Paschal Donohoe, is in Vilnius today (Monday) for a series of meetings. He will meet with Minister for Finance Gintarė Skaistė to discuss the euro area economic outlook, budgetary coordination and the recent Eurogroup agreement on making further progress in deepening Europe’s Capital Markets Union. Minister Donohoe will also meet with the Governor of the Lithuanian Central Bank Gediminas Šimkus.

 Speaking ahead of the visit, Minister Donohoe commented:

“I am really looking forward to a series of meetings in Lithuania with both the Minister for Finance and the Governor of the Central Bank. The performance and resilience of the Lithuanian economy, in particular the great job Lithuania has done in weathering the inflation storm, is a testament to the economic stewardship of the economy led by Minister Skaistė. I will also be discussing how to progress the priorities of the Eurogroup including our recent agreements on budgetary coordination and Capital Markets Union.”

Links to Eurogroup statements:

Eurogroup statement on fiscal policy orientation for 2025 – see link

Eurogroup statement on the future of Capital Markets Union  – see link

ENDS

 

Minister Donohoe welcomes ICTU endorsement of Pay Deal 

The Minister of Public Expenditure, NDP Delivery and Reform, Paschal Donohoe has today (Monday 25th March 2024), welcomed the decision of the Public Service Committee of the Irish Congress of Trade Unions today to accept the new Public Service Agreement 2024-2026. 

The Agreement provides for increases of 10.25% over a two and a half year period. This is made up of pay increases totalling 9.25%, as well as a provision for a Local Bargaining mechanism equivalent to 1% of pay.

Remarking on the result, the Minister said: 

“I believe the Agreement achieves a balanced approach to public service pay that rewards the ongoing effort of public servants, while ensuring the responsible management of public finances.  

“Public Service agreements have an important place in public service industrial relations. These agreements ensure we can deal with public pay issues in a fair, equitable and affordable way in the interests of both public servants and the taxpayer. This Agreement recognises the importance to reward the hard work and dedication of the public service which plays a vital role in our society.

“The Agreement continues to underpin the ongoing transformation of our public services, allowing reform to continue in a collaborative and cooperative way. 

“I look forward to working constructively with ICTU to progress the implementation of the various measures in this Agreement in support of the delivery of quality public services.”

The full text of the agreement is available here

Notes for Editors 

The Agreement runs for two and a half years and the total cost amounts to €3.6 billion.

The pay measures in the Agreement are weighted towards those on lower incomes. The minimum increases provided for ensure that those earning under €50,000 will see increases of at least €3,125, as well as the remaining general round increases of 3%. In total, the lowest paid public servants will receive up to 17.3% over the lifetime of the Agreement, inclusive of local bargaining. . 

The Agreement also provides for a Local Bargaining process. This mechanism will provide an avenue by which employers and grades, groups and categories of public servants can address issues involving changes in structures, work practices or other conditions of service.

The parties will be able to bring forward proposals, up to a maximum value equivalent to 3% of basic pay. The first instalment, equivalent to 1% of the basic pay cost, will be implemented on 1 September 2025 and the balance will fall to be addressed in any successor pay agreement.

The Agreement provides for that industrial peace will be maintained and that there will be no additional cost increasing claims outside of the agreed Local Bargaining Process.

The Agreement builds on the achievements and momentum of reform delivered through previous public service agreements. It allows for on-going co-operation with change and productivity improvements, whilst also providing for industrial peace for the next two and a half years. 

The principle of pay parity in pension increases for pre-existing schemes has already been agreed for the lifetime of the new Agreement.  

Pay Measures

2024

  • A general round increase in annualised basic salary for all public servants of 2.25% or €1,125, whichever is greater, on 1 January 2024.
  • A general round increase in annualised basic salary for all public servants of 1% on 1 June 2024.
  • A general round increase in annualised basic salary for all public servants of 1% or €500, whichever is greater, on 1 October 2024.

2025

  • A general round increase in annualised basic salary for all public servants of 2% or €1,000, whichever is greater, on 1 March 2025.
  • A general round increase in annualised basic salary for all public servants of 1% on 1 August 2025.

2026

  • A general round increase in annualised basic salary for all public servants of 1% or €500, whichever is greater, on 1 February 2026.
  • A general round increase in annualised basic salary for all public servants of 1% on 1 June 2026.

 

ENDS

Statement by Minister Donohoe on FG Party Leadership

Minister for Public Expenditure, NDP Delivery and Reform and Fine Gael TD for Dublin Central, Paschal Donohoe this afternoon (Thursday) said: ‘I have decided that I will not be putting my name forward to lead Fine Gael’.
 
“I have long said that my focus is on the two jobs that I am privileged to hold; that of Government Minister and as President of the Eurogroup. That remains to be the case. It is with a huge honour that I undertake my work on the domestic and international stage.
 
“It was a great surprise to learn of Leo’s intentions. I thank him for his great service to Ireland and for the opportunities that he has afforded me. I do believe that a wealth of talent and experience exists in Fine Gael and that exciting times lie ahead, both for the Party and ultimately for the country.”
 
Ends

Minister Donohoe announces projects to be supported under the Public Service Innovation Fund 2024

Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe TD has today, 19 March 2024, announced the projects that will be supported under the Public Service Innovation Fund 2024. The six projects that have been awarded a total of €500,000, include initiatives from the health, education, local government and voluntary sectors.

 

The Public Service Innovation Fund 2024 received 55 applications from public service bodies throughout Ireland which align to the core themes of Government’s Better Public Services Transformation Strategy – Digital and Innovation at scale; Workforce and Organisation of the Future; and Evidence Informed Policy and Service.

 

The new proposed Public Service projects awarded funding include:

  • A user-centred, digital-supported project from Dublin City Council (in collaboration with NCAD and the HSE) to transform their Social Housing Maintenance Service; 
  • The development of a wearable device by Tallaght University Hospital (in collaboration with St. James Hospital) which will be used in the treatment of patients with asthma;
  • A digital reporting portal for lifeguards, to be developed by Clare County Council;
  • A study by St. Vincent’s Hospital (in collaboration with the HSE and UCD) to examine the feasibility of using an AI-based system to triage and evaluate for heart disease in a community setting;
  • An app to be developed by Dublin City University and the Localise Youth Volunteering programme that will provide young people with a place to record volunteering achievements;
  • A project to revolutionise maternity care by integrating an innovative risk assessment tool with the National Maternal and Neonatal Clinical Management System. 

 

Since 2019, the Public Service Innovation Fund has provided around €3.5 million in funding support to over 105 projects across Ireland. The Public Service Innovation Fund 2024 is the sixth iteration of the fund and this year’s competition placed a strong focus on cross-organisational digital transformation to advance the vision for a digital Public Service as set out in the Better Public Services transformation strategy

 

Announcing the recipients of this year’s fund, Minister Donohoe said:

 

“The Public Service Innovation Fund provides an important opportunity for innovators in our Public Service to explore new solutions for improved services, more seamless and inclusive digital delivery and the development of scalable innovations and enhanced collaboration between Public Service organisations.

 

“This year’s competition encouraged an emphasis on scalability, transferability and learning. I am very happy to announce the successful projects that my Department will support this year and which highlight the commitment to transformation within the Public Service, the potential for cross-sectoral collaboration and the ambition to deliver more for our people. I am looking forward to seeing these initiatives make a real difference in people’s lives and support our shared vision of better public services for all.”

 

You can find out more about the fund and this year’s successful projects at gov.ie/transformation.

 

Notes:

 

Public Service Innovation Fund 2024 – Supported Projects

 

Project: Asthma Wearable Device
Organisation: Tallaght University Hospital (in collaboration with St James Hospital)
Summary of Project: 50 patients with a diagnosis of moderate to severe asthma will use a wearable device, a Bluetooth home spirometer (measuring lung function at home). This will allow patients to measure and record their sleep patterns, pulse rate, activity levels, lung function on a weekly and/or symptom prompted basis and record patient reported outcome measures (PROMs) over a period of 6 month per patient. 

 

The wearable device will also provide to their clinician a retrospective and objective dataset of how the patient was doing over the preceding months facilitating the detection of significant changes in the patient’s condition using the data from the wearable and PROMs. 

 
Project: National Youth Volunteering Portfolio – Digital Wallet
Organisation: Dublin City University (in collaboration with Localise Youth Volunteering)
Summary of Project: The National Youth Volunteer Portfolio (MyVP) is a digital wallet that provides young people with a space and a place to record their volunteering achievements, have their skills and attributes endorsed, outline their key learnings, reflect on their experiences, and outline a vision for their future. The wallet will provide for Improved overall equity of educational outcomes by creating a pathway to education for young people who are disadvantaged by the ‘points race’.
 
Project: Future of Housing Maintenance
Organisation: Dublin City Council (in collaboration with the HSE and NCAD)
Summary of Project: This project offers the opportunity to transform the House Maintenance Service and improve the experience for tenants and staff by developing:

  • A canonical dataset for repairs.
  • A Call-takers Guidance Tool to help capture quality information from tenants.
  • A Tradesperson App to allow depot management and tradespeople to access and manage repairs on the go.
  • A physical touchpoint and digital interface for tenants to opt for self-service repairs and for digital-based reporting as an alternative to phone calls wherever possible.
  • A user-centred process for vulnerable tenants to more easily secure the housing maintenance supports.
  • Digitally enabled customer feedback.
 
Project: Lifeguards online reporting portal
Organisation: Clare County Council
Summary of Project: This application is seeking funding for 25 tablets which lifeguards and supervisors could use to input and collate the data on a daily basis. The I.T. team will develop the reporting portal and this will be installed in each tablet. The project involves a change of work methods. Currently, Lifeguards complete paperwork and it is then collected by Supervisors from 12 locations. 

 

The project meets the requirements of the funds goals and of Clare Co Co Innovation Strategy targets by demonstrating a new, more efficient way of working. Clare County Council with the support of the innovation fund, are aiming to transform the data capture process for the lifeguard service. Our ambition is to eliminate the labour-intensive paper-based process that often results in delayed activity reporting.

 
Project: Comparison of Departmental Echocardiogram vs Caption AI-driven Acquisition
Organisation: St. Vincent’s Hospital (in collaboration with the HSE and UCD)
Summary of Project: The aim of this 250 patient study is to examine the feasibility of using the Caption AI™ system to triage low-acuity patients in a community setting who have been referred for an echocardiogram to evaluate for heart disease. Each patient undergoing an echocardiogram will have a matched ‘standard’ echocardiogram performed and the resulting images reviewed by two cardiologists to assess degree of agreement and reliability of the clinical interpretation made based on the images acquired. 

 

Access to cardiac ultrasound/echocardiography is a challenge in many healthcare systems. Caption AI™ (Caption Health, Brisbane, CA, USA) is an artificial intelligence-driven echocardiographic software algorithm which can instruct an untrained individual to perform a standard echocardiogram test and obtain images which can then be reviewed by a cardiologist to determine if a patient has a normal or an abnormal heart. It has been shown to be roughly comparable to a ‘standard’ echocardiogram study performed by a trained individual for overall assessment of heart structure and function. It is hoped that using such a system will allow non-specialised medical staff (e.g. nurses, junior doctors etc) to perform high quality diagnostic tests which can be reviewed and signed off by a specialist, and thereby improving access to testing. 

 
Project: PROTECT-MOM
Organisation: Rotunda Hospital (in collaboration with HSE/Maternal & Newborn Clinical Management System (MNCMS)/International Society on Thrombosis and Haemostasis/NIMIS/HIPE/Healthcare Pricing Office/CO)
Summary of Project: The ambition of this project is to seamlessly integrate Thrombocalc, an innovative VTE risk assessment tool, with the National Maternal and Neonatal Clinical Management System (MNCMS), thereby revolutionising maternal healthcare across Ireland. Leveraging SMART on FHIR technology, we have transitioned from a prototype to live system functionality, enabling interoperability between Thrombocalc and MNCMS through the “ignite” API. Collaboration between the Rotunda Hospital and the National MNCMS team is pivotal to achieving this integration. 

 

The project aims to streamline data flow, automating processes to benefit every pregnant patient within the Irish healthcare system, with future expansion to encompass all patients. Our vision extends beyond the Rotunda Hospital, envisioning integration with other e-health systems like EPIC in the Children’s Health System (CHI) and as a stand-alone app. Ultimately, our goal is integration with a future national Electronic Health Record (EHR), ensuring seamless, comprehensive healthcare delivery across Ireland. 

 

 

 

About Better Public Services:

Better Public Services, is a transformation strategy to 2030 for the Public Service aimed at delivering for the public and building trust. 

 

The vision set out in the Strategy is for inclusive, high quality and integrated Public Service provision that meets the needs, and improves the lives, of the people of Ireland. The Public Service Transformation Framework, which is at the core of the Strategy, comprises three central themes: Digital and Innovation at Scale; Workforce and Organisation of the Future; and Evidence-Informed Policies and Services Designed for and with our Public.

 

The Framework is a clear direction of reform for the Public Service to 2030. Making progress under these themes will support sectoral level reform programmes already underway in the Public Service.

 

The Department of Public Expenditure, NDP Delivery and Reform (DPENDR) leads the transformation agenda across the Irish Public and Civil Service to support excellence in public service delivery. You can find out more about the strategy at gov.ie/transformation.

ENDS

 

Address at Sciences Po, Paris – ‘Unlocking the potential of the euro area’s economic landscape’

Good afternoon. It is a real pleasure to be here with you in this renowned institution to share my thoughts on how we can unlock the potential of the euro area’s economic landscape. My warmest thanks to Professor Saraceno and the faculty at Sciences Po for hosting me today. 

 

I will deliver my remarks in my capacity as President of the Eurogroup, but first I’d like to mention that I am in Paris today as part of a global programme of engagement by the Government of Ireland to mark St Patrick’s Day. 

 

Each year, members of our Government travel overseas to celebrate the strength and richness of Ireland’s bilateral relationships with other countries. France is Ireland’s closest neighbour in the European Union, and the ties that bind our two countries extend back centuries; from the support that France gave to Ireland’s cause of independence, to vibrant contemporary cultural connections, educational exchange and growing trade.

 

So I am delighted to have the opportunity to celebrate the richness of the partnership between France and Ireland, and I’m particularly pleased to do so in front of an audience of French and Irish students who are its living proof. 

 

The theme for St Patrick’s Day 2024 is ‘Ireland’s future in the world,’ which focuses on young people and our Diaspora, their perspectives about the world of the future and Ireland’s place in it.  In my role as President of the Eurogroup, I would therefore like to expand on these themes through a wider lens – to think a bit about the world of the future and our place in it as Europeans. And I particularly look forward to taking your questions and hearing your perspectives later on.

 

The world of the future: the next European legislative cycle

When I talk about the world of the future, and unlocking the potential of the euro area’s economic landscape, I’d like to start with the near-term – by thinking about the next five years.

 

As I scarcely need to recall before an auditorium of political science students, the European elections will take place in just under three months’ time. From the sixth to the ninth of June, in one of the world’s largest democratic exercises, European citizens will go to the polls to elect a new European Parliament. Once formed, the new legislature will then elect a President of the European Commission and approve a College of Commissioners – which will set out a new legislative programme for the next five years. 

 

Electoral cycles afford us an opportunity to reflect on our recent lived experiences in society and our hopes for the period ahead. What we expect and hope that Europe can deliver for us will be on our minds as we cast our ballots in June.

 

The late Jacques Delors – one of the many great French architects of European integration – who said that the idea of Europe is a dream, but a dream that is becoming a reality.

 

And indeed, both the potential and the reality of Europe have never been so clearly demonstrated than in recent years. 

 

Since the last European elections in 2019, we have been confronted by a global pandemic, the tragic outbreak of war on the continent of Europe with Russia’s invasion of Ukraine, and a cost of living crisis that arose from energy prices pressures that, in turn, morphed into broader inflationary pressures. 

 

In response to each of these shocks, Europe acted with decisiveness and unity, putting forward innovative solutions to deliver what European citizens needed. This was the case with the common procurement and distribution of Covid vaccines. And the decision to the establish the €750 billion Recovery and Resilience Fund to support Member States’ investments in health, digitalisation and climate resilience to build back post-pandemic.

 

Economic policy was extraordinarily supportive and coordinated through this period – both budgetary and monetary policy worked together – through tax and welfare supports, through subsidies and through low interest rates.

 

European governments borrowed heavily through these testing times to protect lives and livelihoods and these policies worked. Our economies bounced back and recovered strongly once the pandemic restrictions were eased with the euro area growing robustly up until the war in Ukraine.

 

The tragedy of war on our continent is something that we have faced every day for the past two years. Our support for Ukraine is steadfast and resolute. Since the start of the war, the EU and its Member States have provided relief and assistance to Ukraine worth over €88 billion. And last month the European Council agreed an additional €50 billion support package.

 

Finance Ministers have also worked together in combatting the cost of living crisis that stemmed from Russia’s weaponisation of energy supplies. Over the last two years, euro area governments have borrowed to provide cost of living supports – with supports averaging close to 1.6% of euro area GDP over the past 2 years.

 

Even in the face of a war and cost of living pressures, our economies still managed to grow last year – modestly, yes, but still positive. The euro area did not enter a recession as many had expected, which has been a testimony to our economic resilience. Our labour markets continue to be exceptionally strong with record low levels of unemployment (6.4%) and record high rates of labour market activity.

 

We have also managed to bring inflation down, from rates of 8.5% just a year ago to 2.6% in the euro area in February. All of this is a tangible expression of the potential and joined up policy coordination in Europe, its agility and ability to be bold in times of crises as well as a reminder of just how much can change over the course of five years. 

 

The Role of Eurogroup

So what about the next five years?

 

It is fitting to recall that as early as 1949, Jacques Rueff, a former director of Sciences Po, said that Europe will be united through its currency, or it will not be united at all. 

 

It may have taken 50 years from when he said those words to turn this dream into reality, but since its launch in 1999, the euro has come to serve as the bedrock for many of our shared priorities and an integral part of our economic security and prosperity.

 

I believe it is through an effective economic response to the major challenges that we face that we will unlock the full potential of the euro area economy.

 

So what does that entail, and how does the work of the Eurogroup fit in?

 

I see three interconnected strands from my perspective as President of the Eurogroup:

 

  • Coordination – how we work together as Member States to coordinate our economic policies in response to economic and financial developments.
  • Competitiveness and Capital Markets – how we reinforce the economic performance of the euro area and its position in the global economy through promotion of structural reforms and investments that foster growth, while also contributing to the goals of the green and digital transitions; and
  • The Future of our Currency – how we think about our future in a world which is becoming more and more digitalised, and in the context of an enlarging European Union.

 

Our work programme for the first half of 2024 is centred around these three areas but I believe that they also reflect the longer-term economic challenges facing the euro area and the EU more broadly.

 

I’ll expand on each of these areas in a bit more detail now. 

 

Growth and Safe Finances

First, on coordination. 

 

The euro area economy’s first challenge is to chart a course for sustained economic growth and prosperity in the period ahead. This will allow countries to return to a more normal level of borrowing and expenditure.

 

This is no small feat given the scale of the shocks we have faced these past years. Nevertheless, if we don’t have strong foundations, the house we have built will not weather any storms that are on the horizon. 

 

For example, due to the recent significant increase in interest rates, euro area countries now face higher borrowing costs on newly issued debt.  So this means we face a choice of spending less or increasing revenues. 

 

The euro area’s debt-to-GDP ratio is on a declining trajectory and should fall below 90% this year. Deficit levels are also decreasing – from 3.6% of GDP in 2022 to 3.2% in 2023, with a further decline to below 3% forecast by the end of this year. 

 

This shows we are delivering on our collective commitment in the euro area to restore public finances to a sustainable trajectory. Furthermore, we have just agreed on an ambitious and comprehensive reform of the EU’s economic governance framework – it aims to encourage Member States to implement the measures needed for the green and digital transitions, strengthen economic and social resilience and bolster Europe’s security capacity.

 

This will help bolster the growth outlook in the years ahead.

 

While I am conscious that uncertainty remains exceptionally high – not least due to geopolitical tensions – I am confident that the conditions are in place for an upturn in growth in 2024, and I’d expect GDP to average close to 1% this year and 1.5% in 2025. 

 

And crucially, we will achieve this while also ensuring safe finances and that we reinforce our resilience and capacity to face shocks in the future.

 

Where we do need to make more progress, though, is in terms of Europe’s productivity. This leads me to a key focus of the Eurogroup work in past months – the state of European capital markets, the interplay with European competitiveness and our priority areas for reform.

 

Competitiveness and capital markets

Second, are all cognisant of the scale of the challenges we face. Europe, as a continent, has an aging population, which places growing demands on our welfare systems. We have set ambitious carbon neutrality objectives that require large investments. We will need to carefully respond to the opportunities and risks posed by new and emerging technologies. And we have seen a significant response from public investment in response to the twin crises of the Covid-19 pandemic and Russia’s war on Ukraine.

 

The onus of financing cannot rest solely upon the public purse. We will need to boost our capital markets and unlock sources of private financing to support our public actions.

 

By enhancing our competitiveness through structural reforms and deepening Europe’s capital markets, we have the potential to unlock new sources of financing for the challenges we face as a continent.

 

This is why the logical focus is to ensure that the EU’s ambition to have a true Single Market for capital becomes a reality.

 

Let me explain why this is so important. If one or more of you here this evening have an innovative business idea, at some stage you will need capital to bring your product to market. If your first thought is to go to your local bank to get a business loan – you would be like many other European businesses.

 

Banks are a much larger part of the financial system in Europe than say in the US, for example; accounting for approximately 62% of total market assets across the euro area compared to just 29% in the US.

 

But banks can be conservative in their lending and restricted to serving their national market.

 

You might also think about seed capital, venture capital and private equity. But the main players in this space tend to be US firms or public agencies.

 

The European equity market is also fragmented compared to the US: it is less than half the size of that of the US market, but has three times as many exchange groups; more than 10 times as many exchanges for listings; more than twice as many exchanges for trading; and roughly 20 times as many post-trade infrastructure providers. 

 

In practice, this means that it is difficult for you as a prospective business owner to access financing from the capital markets. This in turn makes it more difficult to develop and find funding for innovative projects. The result is that we see European businesses looking outside the EU to scale up.

 

Capital markets are also about creating better opportunities for savings. Households in Europe mainly save and invest through banks and insurance companies. Of course, there is nothing wrong with investing in this way – but we want to find ways to provide new opportunities for savers and investors to invest – safely – in innovative companies and projects they believe in, across the whole of the EU. 

 

So what are we doing about it?

 

Yesterday, in the Eurogroup meeting I chaired, all EU Finance Ministers agreed to a common vision on the future of Capital Markets Union. This expresses the political will and commitment of all twenty-seven EU Member States to step up efforts to make concrete progress in the months and years ahead.

 

The Eurogroup statement has set out three priority pillars of action, around the rubric of ‘ABC’. 

  • A for Architecture – that is, how we can reduce barriers, how we can develop a better regulatory and supervisory system that works for businesses, investors and savers.

 

  • B for Businesses – ensuring that businesses, especially SMEs looking to grow quicker, have access as well as the knowledge and capacity to benefit from the appropriate funding to grow and remain competitive in Europe.

 

  • And C for Citizens – all of you. How we can create better opportunities for you to save for your future projects, investments and retirement, and facilitate access to capital markets for retail investors.

 

Our statement identifies areas of political consensus where the legislative energy of the next Commission could be directed. And it has also identified measures which could be taken at the national level, to further develop and deepen our capital markets. 

 

So where do we go from here? 

 

As a first step, I will present this statement to EU leaders at the Euro Summit next week. We need political ownership at the highest level as we set out policy priorities at European and national level. 

 

This will also mark the start of a process of regular follow up at the political level. We must challenge ourselves to keep the political pressure high so as to maintain our common direction of travel on this key issue, which is at the heart of the competitiveness of each and every Member State, as well as the EU collectively.  

 

I’m optimistic about our prospects for making progress, precisely because I recognise the unity of ambition around the Eurogroup table. 

 

And I encourage you all to engage with this project. As I hope I have made clear, the cost of not doing anything here is higher than ever before. And while developing Europe’s capital markets may sound like a lofty goal, we can all play our part – to develop our understanding of how capital markets work, and how we can better fund our futures. 

 

Enlargement  

Before closing, I’d like to say a brief word about future enlargement of the European Union and the implications that holds for Europe’s Economic and Monetary Union. 

 

It is clear that enlargement will be one of the big issues for the next legislative cycle. We have made commitments to our friends and neighbours – commitments which will bring them into our EU family, with all the benefits and responsibilities that this brings. And while we know that these debates will bring challenges, we have seen the extraordinary results of the growth of our European Union and the tremendous potential that further enlargement will offer. 

 

This brings me to the final ‘c’ which I mentioned at the start: the future of our currency.

 

At the end of this week, I will travel to Sofia to discuss Bulgaria’s path to euro area accession. Last year we saw Croatia become the twentieth member of the euro area. 

 

And I am conscious of debates that are taking place in other Member States, which recognise the euro as an essential part of Europe’s economic security fabric, providing greater financial stability and economic prosperity for its members. 

 

Further enlarging the euro area, however, will require us to further strengthen our economic foundations. And so we have a responsibility to ensure a well-functioning economic framework with a clear commitment to sound public finances, a well-functioning banking system, a fully-fledged capital and financial markets union, and a euro area at the forefront of digitalisation to make sure that all our citizens can reap the benefits. It is through continued work in all these areas that the Eurogroup can contribute to unlocking the potential of the euro area’s economic landscape. 

 

Conclusion

I have shared with you today some of my thoughts about the world of the future and what we need to be thinking about today to make sure that the Europe of tomorrow is delivering for its citizens through growth, jobs and quality of life, while at the same time playing its part on the international stage.

 

I really look forward to taking your questions now and to hearing your views on your future and where we are headed. But before we move into Q&A, I would just like to take a quick moment to address the students in the room in particular. 

 

I hope you all feel a sense of pride in the research and learning that you are all part of. Sciences Po has earned the international prestige it holds today thanks to the superb faculty and also all of you and the work you do. 

 

I know many of you will consider a career in public service, whether at local, national, European or international levels. I encourage you to do so. The projects and challenges I discussed this evening will only move forward with the sharpest minds and most generous of spirit.

 

And finally, one public service announcement, though I imagine I have a receptive audience: I encourage you all to make your voice heard and vote in the European Parliament elections in June.

 

Thank you.

 

ENDS

Minister Donohoe marks St Patrick’s Day with visits to France and Bulgaria

The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D., will today (Tuesday) start his St Patrick’s Day programme with an official visit to Paris, where he will undertake a series of political, community, business and student engagements on behalf of the Irish Government. Later in the week, the Minister will travel on to Sofia to continue his St Patrick’s Day programme of events. 

The theme of this year’s international St Patrick’s Day Programme is ‘Ireland’s Future in the World’, which focuses on young Irish people – at home and abroad -and their perspectives about the world of the future and Ireland’s place in it. 

Minister Donohoe, who is also President of the Eurogroup, will be in Paris from Tuesday 12th to Thursday, 14th March. During his visit, he will hold a number of high-level political meetings, including with French Minister for the Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire; and Secretary General of the OECD, Mathias Cormann.  

Recognising the focus on young Irish people and our Diaspora as the theme of St Patrick’s Day 2024, Minister Donohoe will deliver a keynote address at Sciences Po University on the theme of ‘Unlocking the potential of the euro area’s economic landscape’. The Minister will visit the Centre Culturel Irlandais to launch an exhibition commemorating 100 years of Ireland’s participation in the Olympic Games and will participate in a number of economic and trade-focused events, as well as having the opportunity to further engage with the Irish community in Paris at the Embassy’s St. Patrick’s Day reception.  

Minister Donohoe will then travel to Sofia on Thursday, 14th March, where he will stay until Saturday, 16th March. While in Bulgaria, he will have a number of high level political engagements, including a meeting with President Rumen Radev, as well as meetings with Prime Minister, Nikolai Denkov; Deputy Prime Minister and Minister for Foreign Affairs, Mariya Gabriel; and Finance Minister, Assen Vassilev.  

Minister Donohoe will also participate in a conference on ‘Bulgaria’s European Path – Accession to the Euro Area, Benefits and Challenges for Businesses’. He will also participate in an event organised by the Embassy of Ireland at the Bulgarian National Library.  

Throughout the week, Minister Donohoe will also undertake a number of media engagements.  

Speaking in advance of the commencement of his programme, Minister Donohoe said: 

“St. Patrick’s Day and the opportunities it presents to us as a country helps us to further develop our relationships with key business and community leaders across the world, to celebrate all that being Irish is about and to forge stronger and more enduring ties with decision makers across a range of sectors. 

“It is a tremendous honour to represent Ireland on the global stage during our St. Patrick’s Day programme and I am delighted to be visiting two of Ireland’s important EU partners, France and Bulgaria, to celebrate this year.  

“France is Ireland’s closest EU neighbour, and our bilateral relationship continues to go from strength to strength across a wide range of areas, encompassing trade, tourism, education, culture and sport. I am particularly looking forward to engaging with young people and the Irish Diaspora during my engagements in Paris, and hearing first-hand from them about the richness of our relationship with France. 

“Ireland also enjoys an excellent bilateral relationship with Bulgaria, which has only been enhanced by our common EU membership. I am particularly pleased to be able to visit Bulgaria, a country which has been clear in its euro area aspirations, and am greatly looking forward to a range of political, cultural and business engagements while in Sofia.”

 

ENDS

 

Itinerary:

Tuesday, 12th March (Paris)

  • Keynote address and engagement with students at Sciences Po Paris 
  • Engagement with Tourism Ireland and Bord Bia

Wednesday, 13th March (Paris) 

  • Opening address at Enterprise Ireland Climate Tech and Decarbonisation Event 
  • Engagement with Network Irlande on French-Irish business connections
  • Open Embassy Olympics exhibition on ‘100 Years of the Games: Ireland’s Journey’ 
  • Bilateral with Minister of the Economy, Finance and Industrial and Digital Sovereignty, Bruno Le Maire
  • Bilateral with Secretary General of the OECD Mathias Cormann 
  • Saint Patrick’s Day reception                   

Thursday, 14th March (Paris)

  • Paris Saint Patrick’s Day Political Reception 
  • Visit to Centre National d’Études Spatiales (CNES) and engagement with Enterprise Ireland clients 

Friday, 15th March (Sofia)

  • Bilateral with Prime Minister Nikolai Denkov 
  • Bilateral with Deputy Prime Minister Mariya Gabriel
  • Opening of Irish Book Corner                     
  • Meeting with President of the Republic of Bulgaria Rumen Radev
  • Meeting with Finance Minister Assen Vassilev
  • Conference: “Bulgaria’s European Path – Accession to the Euro Area, Benefits and Challenges for Businesses”

 

ENDS

President of the Eurogroup, Minister Donohoe, travels to Brussels to chair March Eurogroup meeting

President of the Eurogroup and Minister for Public Expenditure, National Development Plan Delivery and Reform, Paschal Donohoe TD, is in Brussels today (Monday) to chair Eurogroup’s March meeting.

The Eurogroup meeting will begin with a discussion on economic developments and prospects in the euro area before focusing on budgetary policy. The Eurogroup President intends to issue a joint statement with ministers reflecting on budget developments so far this year within the euro area and outlining the broad orientations for policy in 2025. This statement will also refer to the ongoing work on the revised economic governance framework, which is expected to become operational later this year.

Following this, Ministers will meet in extended format (all EU 27 countries) to finalise a Eurogroup statement on the future of the Capital Markets Union. This will conclude an extensive period of work that the Eurogroup has undertaken over the past twelve months with the aim of agreeing a shared set of policy priorities to deepen European capital markets. This work is in response to a call from EU leaders a year ago to step up efforts to make further progress in developing Europe’s capital markets.

Speaking ahead of Eurogroup, Minister Donohoe commented: 

“As we approach the end of the first quarter, I look forward to a busy March Eurogroup meeting. We will finalise our year-long work on reflecting on the future direction for advancing capital and financial markets in Europe in response to the call by EU leaders last March. I will look to agree a statement by all EU Finance Ministers on our key policy priorities and actions for the next few years at both EU and national levels, which will deepen the integration of our EU capital markets. Open, well-functioning and integrated European capital markets are an essential pillar of the Single Market”. 

“We need now, more than ever, to ensure we have the right environment for European businesses to access funding and scale-up in Europe, and for savers and investors to have new opportunities to invest more productively in Europe.”

“This will boost our competitiveness, contribute to improving our living standards and ensure that the EU is a global leader for innovation. We will also exchange views on the euro area economy, drawing on recent forecasts from the European Commission. Fiscal policy is likely to be restrictive this year as energy support measures are phased out and we will provide our common euro area view on orientations for budget planning for 2025.” 

 

ENDS

Minister Donohoe announces establishment of Senior Post Remuneration Committee to guide Government’s work 

The Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe TD, today (Wednesday) announced the establishment of the Senior Posts Remuneration Committee. In line with the recommendations of the Independent Review Panel (IRP) on Senior Public Service Recruitment and Pay Determination Processes, the Committee will provide objective and independent advice to the Minister regarding the remuneration of senior roles in the Public Service. Government has agreed that office-holders will not be within scope for the Committee to review.  

Following Government agreement earlier this year to place the Committee on a statutory footing, the Committee will operate on an administrative basis in parallel with the necessary legislation being progressed with the publication of the General Scheme today following Government approval.

Government has agreed to confirm the term length for Secretary General posts at seven years, which reflects current procedures, with a possible extension of up to two additional years where necessary. As recommended in the Independent Review Panel Report on completion of this term of appointment, all future appointees to Secretary General posts will be offered revised arrangements at the end of their term. These revised conditions will be put in place for all posts to be identified from this point onwards. 

As per the recommendations of the Report of the Independent Review Panel, the first review of the Committee will be the pay rates of CEOs of Commercial State Bodies (CSBs). Minister Donohoe will be writing to the Committee shortly to initiate this important work. 

 Minister Donohoe stated:

“I would like to take this opportunity to welcome the members of the Senior Posts Remuneration Committee (SPRC) to their new role as they commence work on this important area. The members are all highly qualified and experienced, and I look forward to receiving their advice in due course. 

In addition, in addressing the recommendations of the Report of the Independent Review Panel in respect of the term and arrangements for these very senior posts Government is enhancing clarity, consistency and transparency for all stakeholders while retaining an ability to preserve experience within the system.”

Notes to Editors 

  1. Senior Posts Remuneration Committee

There are five members of the Senior Posts Remuneration Committee who are as follows:

Chairperson

Ms Maeve Carton: Ms Carton is a chartered accountant and member of the Professional Standards Board of Chartered Accountants Ireland.  She is a Governor of the Irish Times Trust and a member of the Board of Directors of the Institute of International & European Affairs (IIEA), former Chairperson of the National Treasury Management Agency (NTMA) and worked for most of her career with CRH plc in a variety of roles including Group Finance Director and Group Transformation Director.  

Members

Ms Bernie Gray: Ms Gray is a management consultant and a partner in Betterboards. She is an accountant and a Chartered Director and formerly held a number of senior management positions in Telecom Eireann, and was latterly HR Director.

She is currently Chair of Coillte plc, a member of the Civil Service Performance Review Group and National Broadband Ireland. She has held a number of non– executive roles including former Chairperson of Eirgrid plc, Board member Irish Payment Services Organisation, Public Appointments Service and Telecom Eireann (now eircom), and a member of the DCU Governing Authority.

Mr Liam Kelly: Mr Kelly is a former Director General of the Workplace Relations Commission, and has long and deep employment law and industrial relations experience in both the public and private sectors. He was directly involved in the drafting of legislation around collective bargaining rights, and minimum wage and sectoral bargaining structures. 

Ms Mary Connaughton FCIPD: Ms Connaughton is the director CIPD Ireland, a board member of the Public Appointments Service and Vice-Chair of the Retirement Planning Council. Previously, she was Head of HR Development at IBEC. Director, Graphite Human Resource Management. Partner, Emerge Consulting. Training and Development / HR Manager, Bank of Ireland Life.

Mr Ultan Courtney: Mr Courtney is currently Chairperson of the Low Pay Commission, and previously a member of the Public Service Pay Commission. He was appointed to the Board of CIÉ and as Chairman of Bus Átha Cliath in September 2014. He has wide experience in the Human Resources and Industrial Relations field. Mr Courtney is Managing Director of his own consultancy business and previously held positions in C&C Group Plc, Superquinn, Waterford Foods and IBEC. He holds a Degree in Economics, an M.A. from Trinity College Dublin and numerous qualifications in the areas of business strategy, employment law, mediation, arbitration and corporate legal governance.

  1.             End of Term Arrangements

The IRP made a number of recommendations in relation to terms and conditions of senior civil servants. This was in order to enhance consistency, clarity and transparency for all stakeholders.  

Government has agreed the a number of changes to the term length and end of term arrangements for Secretary General posts and Heads of certain Civil Service Offices at Secretary General level: 

  • Confirming a seven-year term, and agreement to a possible extension of up to a further two years, for a maximum of nine years subject to Government agreement.
  • On completion of this term, and as set out in the draft Heads of Bill published today:
    1. Appointment to a role at Assistant Secretary grade or (where relevant) at the grade level that they occupied immediately prior to their appointment as Head of Department, whichever is the higher, at the appropriate remuneration for this grade, or
    2. A one-time end-of-term payment equivalent to up to one year’s salary*.
  • In addition, Government may appoint a Secretary General at the end of their term into a post at equivalent level for a period of up to five years where it is considered appropriate. This post would be outside the Civil Service Departments and Offices encompassed above.  

  

*The end-of-term payment of up to one year’s salary is in line with current policy and was found by the IRP to be appropriate. 

As noted in the IRP Report, this is in line with the restrictions on employment put in place by the Standards in Public Office (SIPO) Civil Service Code of Standards. Designated officials under the Civil Service Code of Standards and Behaviour, which includes Secretaries General, are prohibited for a period of 12 months from taking up certain employment or contracts. This is where “the nature and terms of such appointment or engagement could lead to a conflict of interest…”

This end-of-term payment will amount to either one year’s salary or a pro-rata value scaled to minimum pension age, whichever is the lesser. Where the individual is at or above their minimum retirement age superannuation benefits will be payable but no end of term payment will be made.  

ENDS

Minister Donohoe’s fast accruals pension policy to facilitate increased retirement ages for uniformed public servants

The Minister for Public Expenditure, NPD Delivery and Reform, Paschal Donohoe has today (Tuesday) provided his support for retirement age increase measures, which will assist in recruiting and retaining valuable expertise in the uniformed services. 

Proposed increases to the mandatory retirement ages of uniformed public servants will be facilitated under the Department’s fast accrual pension policy, which will provide the option to members to remain in service if they choose to do so. 

The Department conducted a comprehensive analysis to examine the issue of mandatory retirement age increases and the fast accrual pension terms which apply to uniformed public servants. This work was assisted by the returns provided by the Departments of Defence, Justice and Housing, Local Government and Heritage. Officials in the Department analysed over 20,000 individual data records relating to this uniformed group to arrive at the adopted policy approach. 

Under the changes being made to the fast accrual policy framework, fast accruals will be facilitated until age 60; if an individual remains in employment beyond age 60, their pension accrual reverts from a fast accrual to a standard accrual basis. 

The policy will allow for increased mandatory retirement ages to be adopted in the uniformed services and aims to address operational need in an equitable and sustainable manner. 

The Minister will prepare legislation for inclusion into a suitable legislative vehicle to amend the Public Service Superannuation (Miscellaneous Provisions) Act 2004 and the Public Service Pensions (Single Scheme and Other Provisions) Act 2012  in order to facilitate an increase in the mandatory retirement age (MRA) in the uniformed services (An Garda Síochána, Prison Officers, Full-time firefighters, Defence Forces) within the context of the Department of Public Expenditure, NDP Delivery and Reform’s fast accrual pensions policy. 

Minister Donohoe said: “In recent years, there have been a number of requests to increase mandatory retirement ages for uniformed public servants. Changes in retirement ages are a matter for the line Minister. In the context of increases to mandatory retirement ages, it is my role as Minister for Public Expenditure, NPD Delivery and Reform to sanction the impact to pay and pensions.

“I fully support increases to the retirement ages in the uniformed services. The changes proposed by the respective Ministers, facilitated by my Department will enhance the options available to members of the uniformed services, and allow them to remain in service for longer if they choose to do so.

“People are living longer, healthier lives and providing additional certainty in terms of retirement ages in the uniformed services is timely and appropriate. I fully support increases to the retirement ages in the uniformed services and the Department’s fast accrual policy will enable this.”

  

ENDS