On Tuesday, the Irish Government launched the national Economic Recovery Plan 2021 (ERP). The ERP sets out how the Government aims to reboot the economy and get people back to work as the country and world begins to emerge from the COVID-19 pandemic. The extensive plan includes more than €3.5 billion in spending supports, in which just under €1 billion shall be funded through the EU’s Recovery and Resilience Facility. The size of the overall recovery fund places it on par with a conventional budget day of recent years. The overarching ambition of the ERP is to have 2.5 million people in work by 2024, exceeding pre-pandemic levels. Many of these jobs are to align with the ambitions and policies within the Programme for Government.
Central to the plan is a series of reductions to support payments for employees and a focus on the provision of retraining and education for people whose jobs have been destroyed by the pandemic. The Pandemic Unemployment Payment (PUP) is to be extended until beyond the end of June, before it is to be gradually phased out by September. The ERP does however maintain the financial supports for firms hit hard by the pandemic, with the 9% rate for the tourism sector, and the Emergency Wage Subsidy Scheme (EWSS) to be extended until the end of the year. A new additional business support scheme, the Business Resumption Support Scheme (BRSS), is to be introduced within the ERP also, and shall be available to businesses with reduced turnover as a result of public health restrictions to be implemented later this year.
Climate action and the education/training sector are expected to be the big winners in the ERP’s funding pledges, with the majority of the EU Recovery and Resilience Fund money going to those two areas. Over half the €1 billion in EU funds will be devoted to climate action projects, including the first national low-cost loan scheme to retrofit homes. The Department of Further and Higher Education is expected to receive €225 million in additional funding for projects, which shall be utilised towards more than 50,000 training scheme places on green and digital job programmes. Minister for Environment, Climate and Communications Eamon Ryan said in Tuesday’s announcement that the ERP would ensure huge investments towards the green and digital sectors, citing the first stage of a new commuter rail line for Cork, and promising similar commuter schemes in Galway, Limerick, and Waterford.
As part of the ERP launch on Tuesday, the Government also announced details of Ireland’s National Recovery and Resilience Plan. This plan has been developed alongside the ERP and reinforces the policies and ambitions within the Government’s ERP. The draft Recovery and Resilience Plan is to now undergo a formal assessment by the European Commission before being submitted to the Council of the EU for approval. It is expected that this process will take 2 months, with close attention being paid to any policy commitment the Government gave in return for this funding, as there has been increased pressure from the EU to overhaul Ireland’s corporate tax system in the last couple of months. Despite the extension of several financial supports and the continuation of borrowing from the EU, the ERP is a clear sign that the Government intends to gradually leave behind the huge borrowing that characterised the pandemic and instead move towards more sustainable public finances.