At the end of May this year, Paschal Donohoe T.D, Minister for Finance of Ireland and President of The Eurogroup joined the IPBN via zoom live from the Irish Embassy. H.E. Ralph Victory, the Ambassador of Ireland to Portugal, introduced the Minister, who addressed key topics including economic growth and development post-COVID, the implications and allocations of the Recovery Fund, Sustainable development issues, and a post-Brexit Ireland.
The Minister began by elaborating on his role as the President of the Eurogroup saying, “It is my job to coordinate the policy of all the Finance Ministers who share Europe with regard to…budgetary policy,…banking policy,…how the euro is formed, and how it is regulated.”
The Minister also addressed recent VAT issues during the webinar as important taxes levied to fund national governments and the European Union and the operation of single markets. Donohoe told Reuters that he remained confident that Ireland’s low-tax economy would continue to attract multinational investment and jobs even despite the new tax rules, however he noted that Ireland is in danger of losing a fifth of its corporate tax revenue under the G7 finance ministers’ proposal. He went on to say that Ireland intends to remain clear and predictable about its response to changes in taxation, which remains to be seen.
On the question of whether the banking system was a risk or an opportunity, the Minister was ambiguous. According to Donohoe, there is a low percentage of hedge funds involved in the support of the economic development of the SME community in Ireland, while the seed capital and venture investors are meeting needs that at times the existing banking structure cannot meet.
When asked if he considered the banking system in Ireland to be dysfunctional, Donohe remarked, “There are needs in our economy that the SMEs want [to be] met by our banking system…[we lack] an SME business community [that] feels like all their needs are being easily met by the banking system. The relationship between those looking for credit and those finding credit, and those looking for investment and those finding funding investment, always have a degree of tension.”
Last to be addressed was the implementation of the Recovery fund, the implications of Brexit, new and existing trade issues between the EU and Ireland, wrapping it all up with a nod to sustainable capital, carbon-intensive investment, the climate emergency.
The first half of IPBN's year was filled with memorable guests like the Minister who delivered poignant and interesting insights on the goings-on within their respective sectors. We can only hope that what we have in store for the upcoming second half of the year will be as successful and engaging!