Irish political update: July Stimulus Package overview, protest politics and Eamon Ryan lives to fight another day

by Aideen Ginnell, Ireland Director

Another drama filled week in Irish politics with the announcement of the July Stimulus Package, leadership battles and protest politics all to the fore. One must imagine this new government is eagerly awaiting the recess next week and will see it as an opportunity to regroup and prepare for battle again in September.

The July Stimulus Package

Yesterday the government announced the July Stimulus, a €7.4bn package of measures designed to stimulate a jobs-led recovery and build economic confidence. The eagerly awaited package has been somewhat positively received with many widely happy with the long-term extension of Covid payments and the commercial rates waiver.

As was to be expected, the lead opposition, Sinn Féin dismissed the government’s stimulus package as “miserly”, saying the tourism and hospitality sector would be underwhelmed by what it offered and that the plan lacked ambition.

While most of what is in the Package was expected, the blanket cut to the VAT rate by 2% was a welcome surprise. However, this has come as some disappointment to the tourism industry which looked for a larger standalone sector VAT reduction. It is speculated that this could still be dealt with at the Budget in October, by which time, the government will have assessed the impact of the existing supports such as the Stay and Spend tourism tax rebate for people who vacation at home.

For the last number of months business groups have lobbied for more liquidity in the form of grants and low interest loans. In general terms, this seems to be delivered as there is a wider split between loans, grants, and capital for business now than before. It has been noted, however, by the groupings that while this is a welcome step it is simply one step in the journey and much more support will be needed.

A summary of the July Stimulus measures include;

Backing Ireland’s Businesses

  • A new Employment Wage Support Scheme to succeed the Temporary Wage Subsidy Scheme and run until April 2021.
  • 0% interest for first year of SME loans
  • Restart Grant for Enterprises is being extended and expanded
  • The waiver of commercial rates extended until end-September 2020
  • A €2 billion Covid-19 Credit Guarantee Scheme

Helping People Get Back to Work

  • Extension of the Pandemic Unemployment Payment (PUP) to 1st April 2021
  • €200 million investment in training, skills development, work placement schemes, recruitment subsidies, and job search and assistance measures
  • 35,000 extra places will be provided in further and higher education
  • Further supports for apprenticeships

Building Confidence and Investing in Communities

  • Financial certainty through the Enterprise Wage Support Scheme, the Pandemic Unemployment Scheme, Rates waivers etc.
  • €500 million investment in communities
  • Investment in schools, walking, cycling, public transport, home retrofitting, and town & village renewal
  • Tax measures including a temporary reduction in the standard rate of VAT
  • Stay and Spend initiative
  • Targeted measures for most vulnerable sectors

Preparing Ireland for the Economy of the Future

  • €25 million Investment in Life Sciences
  • Training and Skills Development
  • €10 million to be provided under a New Green Enterprise Fund
  • Increase in Seed and Venture Capital for innovation driving enterprises
  • Additional supports for IDA promotional and marketing initiatives targeting jobs
  • Additional supports to businesses to develop their online presence.
  • €20 million Brexit fund to help SMEs to prepare for new customs arrangements
  • Expansion of Sustaining Enterprise Fund scheme

Minister Eamon Ryan lives to fight another day – but just!

There must have been a sigh of relief from Minister Eamon Ryan at about 7pm yesterday evening as it was announced that he would remain leader of the Green Party. It has been a difficult few months for the party leader with a contentious deal, his two mishaps in the Dáil (using a racial slur and falling asleep in the chamber), a prickly leadership battle and now a fraction group emerging from his party with high-profile members at the helm. In the end, loyalty paid-off and the unwavering politician was granted the privilege of leading the party through, what will be an extremely difficult next government term.

Minister Eamon Ryan’s opponent was the very capable Minister Catherine Martin, who now serves as deputy leader of the party. Minister Ryan won by 48 votes, receiving 994 votes against Minister Martin’s 946. There was a 66.7% turnout among party members for the vote.

While Eamon Ryan is safe for now, the closeness of the race indicates that his time as leader is certainly winding down.

Protest politics

While the Taoiseach Micheál Martin may be untouchable at the moment, it does not mean his disgruntled deputies and those in Fine Gael that seem to be unable to swallow the new pill are going to make his time in office a pleasant time.

The first sign of trouble came this week just ahead of the publication of the ‘green list’ of countries that you could travel to and did not have to isolate on return. The Tánaiste Leo Varadkar decided to issue a statement saying he felt the green list was giving out mixed messages. This was seen by many in Fianna Fáil as a huge slight considering it was Fine Gael that proposed the idea of a green list in the first place. That aside, many felt it showed a significant lack of unity and respect for the Taoiseach from their coalition partners. Both Micheál Martin and Leo Varadkar dismissed the issue and said it was simply a difference of opinion and that they are very united behind their efforts to support the country thorough Covid.

The political protest took a new turn yesterday evening as the newly appointed Government Chief Whip Jack Chambers failed to get the government nominee for Leas Ceann Comhairle, Fergus O’Dowd over the line. While first seen as a major blunder by Minister Chambers, it is now widely speculated that this was a retaliation from Fianna Fáil to Fine Gael for their actions over the green list. Others speculate it was a direct aim at Micheál Martin from his growing disgruntled deputies over his handling of the Barry Cowen sacking.

Protest or not, it has been a difficult few days in a week that should have been positive for the new administration considering the huge economic stimulus announced.

The summer recess must now serve as a period for both parties to get used to the new order and, with luck, to return a government more united in September.

Aideen Ginnell

Ireland Director