I apologise for being a few minutes late. I was not aware of the change in the time. I did not mean to keep the Cathaoirleach Gníomhach or colleagues waiting. I am in his hands with regard to this. Important announcements were made last night. I am happy to answer questions in whatever way the Cathaoirleach Gníomhach sees fit or whatever way can be agreed by the Dáil. I have been briefed to the effect that these questions are grouped but I am happy, given the seriousness of the issues involved, to handle them in any way the Cathaoirleach Gníomhach feels is appropriate.
Sentiment score: 0.30
Before I get into the important specifics the Deputy raised, I will reflect on the announcements relating to the tariffs introduced by the Trump Administration. Free trade has been at the centre of the Irish and European economies for many decades. However, it is clear that the global economic landscape has changed. Tariffs are being imposed in respect of trade into the United States at a level that is historically high. We are moving into a trading and economic world that will change. This will have consequences for the Irish economy and the global economy. To better calibrate how we respond to these unprecedented challenges, we must first aim to understand their potential impact. To that end, my Department and the ESRI recently published an analytical paper where several tariff scenarios were modelled. The analysis showed that modified domestic demand, which is the most meaningful way of measuring our economy from a jobs and income point of view, would be 1% to 2% below its non-tariff baseline over the medium term, depending on the extent of tariffs. The potential impact on GDP is greater, between 2.5% and almost 4%, although changes in GDP have less impact on the ground. From an employment perspective, we assume it would be around 2% to 3% lower compared with the non-tariff baseline. In that context, we are talking about 55,000 to 85,000 jobs that either might not be created or could be lost or affected due to these measures. To go back to Deputy Doherty's specific question, given that the position relating to tariffs only became clear last night, the global response is not yet clear. What we will do is begin modelling in respect of what we know. The Government will aim to publish that modelling in the annual progress report that is due to take the place of the stability programme update. We are aiming to do that in the coming weeks.
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Based on the papers published and the analysis we have done, the answer, which is subject to a number of assumptions, is that the Deputy is broadly correct. The issue is what happens to the assumptions. The assumptions in the paper in question assume that investment levels will be stable in our economy. The question is whether the assumption relating to the decisions made, their impact on the global economy and the ability of American companies to invest elsewhere will hold in the time ahead. The second assumption in the paper relates to the fact that we could not at that point identify the impact of sectoral-specific measures and what that impact might do to individual companies or groups of companies in our economy. I have been making the point that on the basis of what we know, we are moving into a scenario of lower growth and lower employment growth. However, I have been equally clear that there are other scenarios that could affect that. This is why, in the time ahead, it is critical that we look at how we can negotiate with the US to see if we can avoid the darker and more damaging scenarios coming to pass.
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I am struck by the value the Deputy places on negotiation and dialogue, particularly as his party made clear it would not go to the Oval Office. The Deputy's party leader and the First Minister of Northern Ireland indicated they would not engage with the United States across the St. Patrick's Day programme.
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That is the case.
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Given that his party made clear it would not engage politically with the Trump Administration, why is he advocating the benefits of negotiation? Why is he making the case for the benefits of dialogue? I welcome the fact he was doing so, but how is that consistent with the announcement his party made, to some fanfare and prominence, that it did not want to engage with the political Administration and leadership of the United States of America? With regard to the narrative he is developing here, if he does want to see negotiation happening, how does he believe that negotiation could be successful in the absence of the European Union being willing to either consider or implement measures to respond to what the US has done?
Sentiment score: 0.62
The response the Government will put in place has three different levels. First is the engagement we will have with the institutions of the European Union and other governments in the EU to look at what the response should be. We believe any response should be proportionate and needs to create the incentives and environment within which negotiation can take place. Second, through IDA Ireland, we will engage with companies that will be affected by what has happened. It is important to be open and to continue to be honest by saying that what we need to do now is to focus our efforts on how we can identify new markets. We must also look at how we can engage and support our companies in engaging with other trading partners with a view to increasing trade and investment. Third, as we take those two steps, we will have to examine whether there is an opportunity for us to engage with the United States of America through the EU in all this. I hope and believe such an opportunity will develop. The measures put in place by President Trump will not only affect the economy of the world, they will also have a significant effect on the economy of America. The President of the European Commission has been very clear in outlining that we want to negotiate and see if we can find a scenario in which jobs and incomes are not further affected and the progress we have made with inflation will not be jeopardised. Those are the three different layers of our response, namely, engagement with the EU, engagement with companies here in Ireland that are going to be affected and then, I hope, an opportunity for negotiation to develop with the United States.
Sentiment score: 0.54
The Deputy referred to three issues. First, the impact on our economy of the response to what has happened in the US was modelled in the paper published by the Department of Finance and the ESRI. The response of the EU to this will become clearer in the time ahead and we will aim to influence that and, of course, be part of it. Second, the Deputy is correct; the issue of the implication of all of this across trade flows on our island is an important matter. The Government, through the Department of Foreign Affairs and Trade, will now have to engage closely with colleagues in the Government of the United Kingdom and obviously within the Northern Ireland Executive as well to look at how we can understand and deal with this issue. Finally, in terms of how we then deal with the issue of supports for companies that are affected, tomorrow, the Tánaiste has convened a trade forum where the different representative bodies of the employers that are affected by this will be present. We will look, through the Industrial Development Authority, IDA, and Enterprise Ireland, EI, at what response can be put in place but our first priority at the moment is to look at negotiation and see whether we can avoid the worst becoming permanent.
Sentiment score: 0.03
Again, that is an important point. Every country is affected in different ways by the changes that have happened. However, there is a particular uniqueness to what it could mean due to the vital arrangements and agreements that are in place to recognise and protect the all-island economy in the context of dealing with Brexit. We understood this was a risk. It is one that has already been raised with the European Commission. It is an issue, of course, on which we will have to engage very closely with our colleagues in the Northern Ireland Executive. At this point in time, given the announcements are only a few hours old, I am sure the Deputy will appreciate it is not possible for us to go into the detail quite yet of how we will deal with this, but it is an extremely important issue that is important to acknowledge here today. In terms of the response from the European Union to this, clearly, none of us wants to be in this position. There is a clear consensus from contributions so far regarding the need to negotiate and see whether we can get an agreement to lead us away from the precipice we are now on. It is not clear to me, however, that we will get to that point unless we indicate how the EU would be willing to respond from a trade point of view. However, the European Commission, correctly, is going to take time to engage with member states of the EU on this but stressing that negotiation is our preference.
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I am, of course, very aware of the difficulties the increase in interest rates in recent years has caused to many mortgage borrowers. From a regulatory perspective, the Central Bank has put in place a range of measures to protect consumers who have or who are taking out a mortgage. The consumer protection framework, which applies in the same way to all regulated mortgage entities such as banks, retail credit firms and credit servicing firms, seeks to ensure that lenders are transparent and fair in all their dealings with borrowers. Specifically with regard to variable rate mortgage holders, the Central Bank's consumer protection code requires all regulated mortgage creditors to explain to borrowers how their non-tracker variable interest rates have been set and to clearly identify the factors which may result in changes to variable interest rates. In this context, the Central Bank is continuing to update its consumer protection framework, and Deputies will be aware that it launched an enhanced consumer protection code this week which, following an implementation period, will come into effect next year. The Central Bank has also engaged intensively with regulated firms on the operation of specific aspects of the consumer protection framework to make sure there is capacity in place to: manage applications by borrowers to switch their mortgage or mortgage provider; ensure there is no discrimination against borrowers based on where they currently hold their mortgage; ensure changes in mortgage interest rates are in line with mortgage terms and conditions; and have supports available to borrowers in or facing arrears. Also, a number of measures were introduced by industry in 2023 to support borrowers who wish and are in a position to switch their mortgage. This included the provision of an aligned industry-wide set of initial eligibility criteria to facilitate people who are switching their mortgage from a non-bank to a bank.
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I have three points in response to that, the first of which is that the best prospect we have to see all mortgage holders pay lower interest on their loans in the time ahead is to see a change in general interest rates within our economy. I welcome the decisions that have been made in recent months by the European Central Bank, ECB, in that regard. Second, I emphasised at all times during this very difficult period for those who had their mortgages sold on that their rights from a legal point of view would not be affected. That is the case. I outlined that in my answer.
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Third, what we have seen is some switching take place and I, of course, want to look at how we can see further switching take place from the non-bank back to the bank sector.
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I always acknowledge, and will do so again, that it was difficult and there were moments of high anxiety for those who saw the ownership of their loans or the mortgage on their homes or properties switching. I know that the impact on those affected has been difficult. For many, it has resulted in their mortgage payments and their interest rates being high. At the same time, I must be honest in emphasising what I can and cannot do. What I can do is look at the changes that have been made in the consumer protection framework to ensure there are rights in place and levels of protection are available. I have outlined that to the Dáil. What I could not do was intervene to block decisions banks were making. Had I done so, it would have had other consequences for our banks and their ability to lend, contribute to our economy and, in turn, support others who wish to access mortgages and loans.
Sentiment score: 0.09
The Ireland Strategic Investment Fund is a €15 billion fund comprising the discretionary portfolio of €8.4 billion and the directed portfolio of €6.2 billion. It has a double bottom line mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland. According to the most recent NTMA annual report, from inception to the end of 2023, ISIF generated an annualised investment return of 3.1%, or more than €2.3 billion, in investment returns across its portfolio, affecting and supporting 42,454 jobs in the economy. ISIF has complete independence in implementing its investment strategy under the NTMA Acts under an investment committee reporting to the NTMA’s board. The UN maintains a database of businesses involved in certain specific activities relating to settlements in the occupied Palestinian territories. It was developed in 2020 with an update in 2023. At the end of 2023, direct investments by the Ireland Strategic Investment Fund in companies on the UN database were approximately €4.2 million in 11 companies and its indirect investments were €9.4 million and included eight companies. ISIF divested from six of these companies, with a total value of approximately €2.95 million, across 2024. The six companies were Bank Hapoalim BM, Bank Leumi Le-Israel BM, Israel Discount Bank Limited, Mizrahi-Tefahot Bank Limited, First International Bank of Israel Limited and Rami Levi Chain Stores Limited. At the time, ISIF determined that the risk profile of these investments was no longer within its investment parameters. The level of holdings at the end of December regarding companies on the UN list was €4.2 million in 11 companies.
Sentiment score: 0.05
I thank the Deputy for recognising the work the NTMA has done in this and other areas and particularly the work ISIF has done. The Deputy is familiar with that. I have outlined the divestment that has taken place and it is important for me to emphasise to Deputy Connolly that the operational independence of ISIF is very important to this space. It manages €15 billion of our money, which is invested in jobs in Ireland and contributes to the economic growth and development of our country at a time when we will need new sources of economic investment and growth. It operates independently of me and is well aware of the sensitivity and importance of the investments the Deputy has referred to and, indeed, the questions being put to me. I respectfully make the case, which the Deputy has already acknowledged, that these investments as a share of ISIF's total portfolio, not to mention as a share of the investment in the overall Israeli economy, are extremely small. However, Deputy Connolly is raising issues of principle and I am aware of the correct and deep concern the Irish people have regarding the suffering of the people of Gaza.
Sentiment score: 0.31
I thank the Deputy for raising this. While I make the case that the share of the overall portfolio of ISIF's investments is a small one, millions of euro is a lot of money for the Deputy and me. I accept that point. The Deputy raises very important foreign policy and human rights issues. My Department engages with ISIF and the NTMA on these and other matters. The concerns and issues the Deputy has raised are very well understood. The Deputy referred to issues of policy. I must emphasise again that, given the scale of the portfolio ISIF manages and how much of our money it manages overall, it is important that I respect and support the independence of the board and the decisions it makes. Divestments have already taken place and the ISIF board will determine what is the right investment in a way that is consistent with our independence and the mandate it has. It is well aware of the issues the Deputy raises and the exchanges the Deputy and I have had on a regular basis on this.
Sentiment score: 0.30
My officials and I regularly engage with the Central Bank. However, I have not had any engagement recently with the Central Bank on the specific issue the Deputy has raised, which is the issue of tax-based support for housing. The issue in the Irish housing market and so many of the social and economic difficulties that it is now causing are caused by a shortfall in supply. For more than a decade, the level of homes we have been building has not been in line with the needs of our society and the change in our demographic and economic growth. An increase in the supply of new homes remains a priority aim of Government policy. I will continue to work with my Cabinet colleagues to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of public money and boost the supply of homes in the public and private sectors. A range of tax-based measures are already in place, namely, the help to buy scheme, the rent tax credit, the vacant home tax, the residential zoned land tax and the residential premises rental income relief. The Deputy will appreciate that decisions regarding taxation measures are made in the context of the annual budget. He will also know that I am not going to comment in advance of any decisions that are yet to be made.
Sentiment score: 0.32
I will be meeting our banks to engage with them on the greater role they can play in regard to housing because we all know how much more we need to do. However, I have to recognise two different points. First, the banks are independent of the Government. Second, they are independently regulated. I will be engaging with them to see what further measures we can put in place that lead to more lending and more homes being built. However, I fully respect the independence of the Central Bank, as does the entire Government, because we know the stability of our financial sector is vital to more homes being built in the time ahead. We will consider additional measures, as we always do, in the run up to the budget from an investment point of view and also in the context of the review of the national development plan that is taking place.
Sentiment score: 0.25
I absolutely support all of the excellent work that the Minister for housing is doing in looking at what further measures can be put in place to lead to more homes being built. Regarding the Deputy's question, I support looking at ideas that will make more loans and more support available in our economy to lead to more homes being built. However, the Minister for housing and I do not want to see anything happen that leads back to the return of levels of lending and commercial practices that only create further difficulty. The Minister for housing will have the same view as me in that regard. What he is doing, as is his right, is looking at the different options that can be put in place to lead to more homes being built. He and I are clear that we do not want to see anything happen that is a source of additional financial risk because if that additional financial risk happens, it will only lead to more homes being built in the time ahead-----
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I have answered the Deputy's question.
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I thank the Deputy for raising the significant announcements that were made during the night. The Government is initiating a number of steps, but the Deputy will understand that I need to be honest and clear in setting expectations of what we can do. This is a deeply serious issue. Unfortunately, it is a significant moment in how global trade is conducted and what that can mean for jobs, income and prices all over the world, most particularly the country that the Deputy and I are trying to play a role in guiding through all of this. As to our engagements and proactivity, it has been in publishing our best estimate regarding what it will mean for our economy. I have been engaging with fellow finance ministers in the EU and across the world on this. A further meeting on this situation will be happening at the end of next week in Warsaw where we are being hosted by the Polish Presidency of the European Union. The Tánaiste and Minister for Foreign Affairs and Trade will be engaging with fellow governments as early as Monday. Before that happens, he has convened a meeting of our trade forum in which all Ministers who are involved in this will be present along with all of the representative bodies. I believe that meeting will happen as soon as early tomorrow afternoon, given the seriousness of this issue. Regarding the supports that we can make available to companies and how we engage with them, that engagement will be through such organisations as the IDA and EI. We are talking about trade, for Ireland alone, of tens of billions of euro. If that were affected in any way, no Government could put in place measures that could take the place of that trade. What we will have to do is engage with companies individually to see how we can assist them in finding new markets or dealing with negotiation that awaits. It is very serious, but by working within our economy, we will find ways of adjusting and responding to the difficult announcements of the night.
Sentiment score: 0.18
It is vital that we keep the Dáil informed of this and that all TDs be aware of what is taking place. I am aware that employers and workers in Cork will be feeling particularly worried today. It is something that affects everybody but I am conscious that large life science and medicine producers are located in Cork, many of which have been there for decades. Some very important food and drink manufacturers, farmers and suppliers that are located in Cork are also worried about what this will mean for their food, agricultural and drink exports to the US. I am very much aware of this. We are engaging with them to hear their views. We will have to work to see if we can avoid the worst happening in the short term. That is why negotiation is vital, but we will see a big change happening in the global economy and we will need to support employers and firms in moving to that new equilibrium. They know this is happening and we will have to work with them to see how we can continue to support the growth of our economy. As the Deputy notes, our forecasts based on what is currently happening are for a lower level of growth but for our economy to still have very high levels of employment.
Sentiment score: 0.09
May he rest in peace. Many members of the GAA family in Kildare will be feeling particularly sad today. I thank the Deputy for mentioning that. Regarding the Deputy's constituency, employers like Intel have made a magnificent contribution to the employment and growth of our economy, but they also make an important contribution to the European economy through the work they do in semiconductors and a high level of technologically advanced manufacturing. We will of course engage with companies like those because they and many other employers have been in our country for decades and have contributed to the US. By being globally present, they have allowed US companies to become even more successful. Even at this late stage, that is the case we continue to need to make. Through their presence in Ireland, those US companies have been more successful in the US. Being in Europe has contributed to their global performance. We will continue to make that case and will take on board the important issues raised by the Deputy about employers in his constituency.
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