Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Ireland and delivering a Council opinion on the 2020 Stability Programme of Ireland
Date: 2020-05-20
Institutions: European Commission, Secretariat-General
Subjects: Ireland, aid to undertakings, economic policy, economic recovery, economic reform, employment aid, epidemic, infectious disease, stability pact, stability programme, tax system

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   EUROPEAN COMMISSION  Brussels, 20.5.2020  COM(2020) 507 final  Recommendation for a COUNCIL RECOMMENDATION on the 2020 National Reform Programme of Ireland and delivering a Council opinion on the 2020 Stability Programme of Ireland  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2020 National Reform Programme of Ireland and delivering a Council opinion on 
the 2020 Stability Programme of Ireland 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof,  

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

On  17  December  2019,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Strategy,  marking  the  start  of  the  2020  European  Semester  for  economic  policy 
coordination. It took due account of the European Pillar of Social Rights, proclaimed 
by the European Parliament, the Council and the Commission on 17 November 2017. 
On  17  December  2019,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the 
Commission also adopted the Alert Mechanism Report, in which it identified Ireland 
as one of the Member States for which an in-depth review would be carried out. On 
the  same  date,  the  Commission  also  adopted  a  recommendation  for  a  Council 
recommendation on the economic policy of the euro area.  
The 2020 country report for Ireland3 was published on 26 February 2020. It assessed 
Ireland’s progress in addressing the country-specific recommendations adopted by the 
Council  on  9  July  20194,  the  follow-up  given  to  the  recommendations  adopted  in 
previous years and Ireland's progress towards its national Europe 2020 targets. It also 
included  an  in-depth  review  under  Article  5  of  Regulation  (EU)  No  1176/2011,  the 

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OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
SWD(2020) 506 final. 
OJ C 301, 5.9.2019, p. 117. 

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(3) 

(4) 

(5) 

(6) 

results of which were also published on 26 February 2020. The Commission’s analysis 
led it to conclude that Ireland is experiencing macroeconomic imbalances. Imbalances 
relate, in particular, to significant stocks of public debt, private debt and net external 
liabilities.  

On 11 March 2020, the World Health Organization officially declared the COVID-19 
outbreak  a  global  pandemic.  It  is  a  severe  public  health  emergency  for  citizens, 
societies  and  economies.  It  is  putting  national  health  systems  under  severe  strain, 
disrupting  global  supply  chains,  causing  volatility  in  financial  markets,  triggering 
consumer  demand  shocks  and  having  negative  effects  across  various  sectors.  It  is 
threatening  people’s  jobs,  their  incomes  and  companies’  business.  It  has  delivered  a 
major  economic  shock  that  is  already  having  serious  repercussions  in  the  European 
Union. On 13 March 2020, the Commission adopted a Communication5 calling for a 
coordinated economic response to the crisis, involving all actors at national and Union 
level. 

Several  Member States have declared a state of  emergency or introduced emergency 
measures.  Any  emergency  measures  should  be  strictly  proportionate,  necessary, 
limited in time, and in line with European and international standards. They should be 
subject to democratic oversight and independent judicial review. 

On  20  March  2020,  the  Commission  adopted  a  Communication  on  the  activation  of 
the general escape clause of the Stability and Growth Pact6. The clause, as set out in 
Articles 5(1), 6(3), 9(1) and 10(3) of Regulation  (EC) 1466/97 and Articles 3(5) and 
5(2) of Regulation (EC) 1467/97, facilitates the coordination of budgetary policies in 
times  of  severe  economic  downturn.  In  its  Communication,  the  Commission  shared 
with the Council its view that, given the expected severe economic downturn resulting 
from  the COVID-19 outbreak, the  current  conditions  permit  activation of the clause. 
On  23  March  2020,  the  Ministers  of  Finance  of  the  Member  States  agreed  with  the 
assessment of the Commission. The activation of the general escape clause allows for 
a temporary departure from the adjustment path  towards the medium-term budgetary 
objective,  provided  that  this  does  not  endanger  fiscal  sustainability  in  the  medium 
term. For the corrective arm, the Council may also decide, on a recommendation from 
the Commission,  to  adopt  a revised  fiscal  trajectory. The  general  escape  clause does 
not suspend the procedures of the Stability and Growth Pact. It allows Member States 
to depart from the budgetary requirements that would normally apply while enabling 
the  Commission  and  the  Council  to  undertake  the  necessary  policy  coordination 
measures within the framework of the Pact. 

Continued  action  is  required  to  limit  and  control  the  spread  of  the  pandemic, 
strengthen  the  resilience  of  the  national  health  systems,  mitigate  the  socio-economic 
consequences through supportive measures for business and households and to ensure 
adequate  health  and  safety  conditions  at  the  workplace  with  a  view  to  resuming 
economic  activity.  The  Union  should  fully  use  the  various  tools  at  its  disposal  to 
support  Member  States’  efforts  in  those  areas.  In  parallel,  Member  States  and  the 
Union should work together to prepare the measures necessary to get back to a normal 
functioning of our societies and economies and to sustainable growth, integrating inter 
alia  the  green  transition  and  the  digital  transformation,  and  drawing  all  lessons  from 
the crisis. 

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COM(2020) 112 final. 
COM(2020) 123 final. 

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(8) 

(9) 

The  COVID-19  crisis  has  highlighted  the  flexibility  that  the  single  market  offers  to 
adapt  to  extraordinary  situations.  However,  in  order  to  ensure  a  swift  and  smooth 
transition to the recovery phase and the free movement of goods, services and workers, 
exceptional  measures that prevent  the single market  from  functioning  normally must 
be removed as soon as they are no longer indispensable. The current crisis has shown 
the need for crisis preparedness plans in the health sector, which include in particular 
improved  purchasing  strategies,  diversified  supply  chains  and  strategic  reserves  of 
essential  supplies.  They  are  key  elements  for  developing  broader  crisis  preparedness 
plans. 
The  Union  legislator  has  already  amended  the  relevant  legislative  frameworks7  to 
allow  Member  States  to  mobilise  all  unused  resources  from  the  European  Structural 
and  Investment  Funds  so  they  can  address  the  exceptional  effects  of  the  COVID-19 
pandemic. Those amendments will provide additional flexibility, as well as simplified 
and streamlined procedures. To alleviate cash flow pressures, Member States can also 
benefit  from  a  100%  co-financing  rate  from  the  Union  budget  in  the  2020-2021 
accounting  year.  Ireland  is  encouraged to  make full use of those possibilities to  help 
the individuals and sectors most affected by the challenges. 

The  socio-economic  consequences  of  the  pandemic  are  likely  to  be  unevenly 
distributed  across  regions  due  to  different  specialisation  patterns.  This  entails  a 
substantial risk of widening regional disparities within Ireland. Combined with the risk 
of  a  temporary  unravelling  of  the  convergence  process  between  Member  States,  the 
current situation calls for targeted policy responses. 

(10)  On 21 April 2020, Ireland submitted its 2020 National Reform Programme and, on 30 
April 2020, its 2020 Stability Programme. To take account of their interlinkages, the 
two programmes have been assessed together. 

(11) 

(12) 

(13) 

Ireland is currently in the preventive arm of the Stability and Growth Pact and subject 
to the debt rule.   

In  its  2020  Stability  Programme,  the  government  plans  the  headline  balance  to 
deteriorate  from  a  surplus  of  0,4%  of  GDP  in  2019  to  a  deficit  of  7,4%  of  GDP  in 
2020. The deficit is projected to decline to 4,1% of GDP in 2021. After decreasing to 
58,8%  of  GDP  in  2019,  the  general  government  debt-to-GDP  ratio  is  expected  to 
increase  to  69,1%  in  2020  according  to  the  2020  Stability  Programme.  The 
macroeconomic and fiscal outlook is affected by high uncertainty due to the COVID-
19 pandemic. 

In response to the COVID-19 pandemic, and as part of a coordinated Union approach, 
Ireland has adopted budgetary measures to increase the capacity of its health system, 
contain  the  pandemic,  and  provide  relief  to  those  individuals  and  sectors  that  have 
been  particularly  affected.  According  to  the  2020  Stability  Programme,  those 
budgetary  measures  amounted  to  around  2,0%  of  GDP.  The  measures  include 

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Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending 
Regulations  (EU)  No  1301/2013,  (EU)  No  1303/2013  and  (EU)  No  508/2014  as  regards  specific  measures  to 
mobilise  investments  in  the  healthcare  systems  of  Member  States  and  in  other  sectors  of  their  economies  in 
response to the COVID-19 outbreak (Coronavirus Response Investment Initiative) (OJ L 99, 31.3.2020, p. 5) and 
Regulation  (EU)  2020/558  of  the  European  Parliament  and  of  the  Council  of  23  April  2020  amending 
Regulations  (EU)  No  1301/2013  and  (EU)  No  1303/2013 as  regards  specific  measures  to  provide  exceptional 
flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak 
(OJ L 130, 24.4.2020, p. 1). 

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employment  and  unemployment  supports  for  a  twelve-week  period  (around  1,4%  of 
GDP)  and  additional  expenditure  to  increase  the  capacity  and  accessibility  of  the 
healthcare system (around 0,6% of GDP). In addition, Ireland has announced measures 
that,  while  not  having  an  immediate  budgetary  impact,  will  contribute  to  support 
liquidity to businesses, which the 2020 Stability Programme estimates at around 0,3% 
of  GDP.  Those  measures  include  credit  guarantees  and  various  loan  schemes,  the 
suspension  of  interest  and  penalties  for  certain  late  payments  by  employers,  the 
suspension of debt enforcement activity and payment breaks of up to three months on 
business loans. On 2 May 2020, the government announced a new package of debt and 
equity support measures for businesses, amounting to around 2% of GDP, which were 
not  incorporated  in  the  2020  Stability  Programme  or  in  the  Commission  forecast. 
Overall,  the  measures  taken  by  Ireland  are  in  line  with  the  guidelines  set  out  in  the 
Commission  Communication  on  a  coordinated  economic  response  to  the  COVID-19 
outbreak.  The  full  implementation  of  those  measures,  followed  by  a  refocusing  of 
fiscal  policies  towards  achieving  prudent  medium-term  fiscal  positions  when 
economic  conditions  allow,  will  contribute  to  preserving  fiscal  sustainability  in  the 
medium term.  

(14)  Based  on  the  Commission  2020  spring  forecast,  under  the  assumption  of  unchanged 
policies,  Ireland’s  general  government  balance  is  forecast  at  -5,6%  of  GDP  in  2020 
and -2,9% in 2021. The general government debt ratio is projected to reach 66,4% of 
GDP in 2020 and 66,7% in 2021. 

(15)  On 20 May 2020, the Commission issued a report prepared in accordance with Article 
126(3)  of  the  Treaty  due  to  Ireland’s  planned  breach  of  the  3%  of  GDP  deficit 
threshold in 2020. Overall, the analysis suggests that the deficit criterion as defined in 
the Treaty and in Regulation (EC) No 1467/1997 is not fulfilled. 

(16)  The COVID-19 pandemic affected Ireland heavily in the first half of 2020, putting the 
health  system  under  extreme  pressure.  Ireland  introduced  urgent  measures  to 
strengthen the health system, as well as containment measures, to abate the pandemic, 
which  have  severely  curtailed  economic  activity  in  certain  sectors.  In  addition,  the 
government  introduced  a  broad  range  of  economic  measures  to  mitigate  the 
consequences of the COVID-19 crisis as far as possible. These included wage subsidy 
schemes  to  protect  jobs,  welfare  payments,  temporary  bans  on  rent  increases  and 
evictions,  as  well  as  liquidity  and  credit  support  measures  for  firms.  Although  these 
measures  aim  to  abate  the  economic  shock  of  the  pandemic,  the  risk  of  significant 
output  loss,  bankruptcies  and  insolvencies,  and  an  increase  in  unemployment  and 
people at risk of poverty, remain high. 

(17)  Before  the  COVID-19  pandemic,  hospitals  were  already  working  near  full  capacity 
with  the  occupancy  rate  for  acute  care  beds  being  among  the  highest  in  OECD 
countries. This  was mainly due to the lack of universal access to primary care and a 
significant  reliance  on  hospital  care.  Challenges  regarding  recruitment  and  retention 
had led to shortages in nursing workforce in certain regions and hospitals. Long-term 
home  care  was  under-provided  and  has  lacked  statutory  entitlement,  with  policies 
incentivising  the  use  of  institutional  care.  COVID-19  has  placed  an  unprecedented 
pressure on the healthcare system. Timely emergency measures have been put in place 
to  increase  hospital  capacity  and  provide  temporary  universal  healthcare  services.  
However  in  the  medium  term,  Ireland  still  needs  to  address  the  structural  limited 
efficiency,  flexibility,  resilience  and  accessibility  of  its  healthcare  system.  The 
ambitious  Sláintecare  reform  plans  to  deliver  on  a  universally  accessible  and 
sustainable  health  system.  However,  plans  for  its  implementation  remain  vague. 

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Defining  clear  milestones  and  deadlines  and  a  solid  monitoring  framework  may 
contribute to the timely implementation of universal coverage. The implementation of 
long-term  care  reforms,  including  new  ways  of  working  in  the  community  through 
support  for  home  care  and  reorganisation  of  nursing  resources,  could  require  a 
stocktaking  of  existing  facilities,  projections  for  future  growth  in  demand,  and  a 
commensurate ‘gap’ analysis, followed by a plan for delivery. 

(18)  According  to  the  Commission’s  latest  forecast,  unemployment  is  expected  to  rise  to 
7,4%  in  2020  and  slightly  decrease  to  7%  in  2021.  The  government  has  made 
significant use of income and employment support policy to respond to the pandemic, 
notably  short-time  work  schemes,  which  should  continue  to  be  swiftly  implemented 
and  enhanced.  The  relatively  high  number  of  people  living  in  households  with  low 
work intensity calls for further efforts to foster individualised activation strategies. The 
challenges  facing  Ireland  in  regard  to  poverty  and  employment  quality  and  support, 
including for people with disabilities, remain and they are likely to be exacerbated by 
the pandemic. In cooperation with social partners, the current context calls to continue 
upskilling  and  reskilling  efforts  in  order  to  meet  the  changing  needs  of  the  labour 
market  and  prepare  the  workforce  for  the  climate,  energy  and  circular  economy 
transition.  Skill  shortages  have  been  identified  in  the  housing  sector,  but  others  are 
expected  to  arise  as  the  transition  progresses.  In  the  context  of  the  COVID-19 
pandemic, it is essential to ensure that the digitisation of education and work does not 
increase educational and social inequalities. 

(19)  The government has implemented various measures to support housing supply, which 
have contributed to increasing annual housing completions by almost 40% in the two 
years to September 2019. Combined with effective macro prudential tools, this seems 
to  have  helped  curb  house  price  inflation.  However,  housing  completions  still  fall 
short of demand. Housing affordability is a problem for many households and inflation 
in the rental sector is persistently high. Improved infrastructure, combined  with spatial 
planning, could be a critical enabler for improving housing supply. In addition, solving 
administrative  deficiencies  in  the  vacant  site  levy  might  ultimately  help  improve 
housing affordability in the medium-term. Shortages in social housing supply remain a 
significant  challenge  to  foster  inclusion,  also  for  the  most  vulnerable.  Recent  policy 
measures have accelerated social housing delivery, but there were still approximately 
68,700  households  on  social  housing  waiting  lists  in  Ireland  in  December  2019. 
Further efforts are needed to cover the needs of remaining households on the current 
waiting  list  and  of  potential  new  applicants.  Of  the  around  10,000  homeless  people 
registered in Ireland, 3,500 are children. This raises concerns about the potential risks 
of deepening inequalities, entrenched poverty and social exclusion. Single parents with 
children  are  among  the  groups  most  affected  by  homelessness.  Substantial  regional 
and  urban  differences  persist,  with  69%  of  all  homeless  adults  concentrated  in  the 
greater Dublin area. 

(20)  The  domestic  banking  system  is  an  important  source  of  liquidity  for  Irish  firms.  A 
timely  access  to  loans  can  prove  challenging  for  the  small-  and  medium-sized 
enterprises  (SMEs)  and  those  without  collateral  or  an  existing  relationship  with  a 
lender. In addition, SMEs’ access to bank lending has been until recently hampered by 
high  interest  rates.  The  Irish  authorities  and  banks  have  introduced  a  number  of 
measures to alleviate the financial difficulties faced by businesses and households. It is 
important  that  these  measures  provide  the  necessary  liquidity  and  foster  sustainable 
restructuring solutions for borrowers whose financial difficulties are strictly linked to 
the  outbreak,  and  who  are  therefore  expected  to  return  to  viability  following  a 

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transition period. Only such a balanced approach can help businesses and households 
overcome  the  temporary  challenges  without  undermining  the  profitability  (already 
weak) and the nascent progress that Ireland has made in recent years in improving the 
financial stability of its banking sector. In the process of designing and implementing 
these measures the resilience of the banking sector needs to be taken into account. 

(21)  To  foster  the  economic  recovery,  it  will  be  important  to  front-load  mature  public 
investment  projects  and  promote  private  investment,  including  through  relevant 
reforms.  The  restart  of  the  economy  requires  that  Ireland  advances  on  its  ambitious 
environmental,  climate,  energy  and  infrastructure  investments.  Ireland  has  lagged 
behind so far in tackling decarbonisation. Greenhouse gas emissions in transport and 
buildings are high and have remained on  a rising trend.  Ireland will  fall short of the 
2020 energy efficiency and renewable energy targets. Ireland is dependant on energy 
imports and is among the Member States with the highest prices for electricity, which 
could negatively impact both the environment and  business competitiveness. Ireland’s 
transformation  to  a  climate  neutral  economy  will  require  sizeable  private  and  public 
investment  over  a  sustained  period  in  renewable  energy,  electricity  infrastructure, 
energy  efficiency  and  sustainable  transport,  among  others.  The  Climate  Action  Plan 
constitutes  a  credible  initiative  to  reverse  the  emissions  trajectory.  An  effective  and 
sustained  implementation  of  its  policies  and  measures  will  be  required  to  translate 
ambition  into  concrete  results.  The  programming  of  the  Just  Transition  Fund  for  the 
period 2021-2027 could  help  Ireland to  address some of the challenges posed by the 
transition to a climate neutral economy, in particular in the territory covered by Annex 
D to the country report. This would allow Ireland to make the best use of that fund.  

(22) 

Ireland’s  efforts  to  reduce  the  productivity  gap  between  its  foreign  and  domestic 
sectors  remain  sluggish.  Direct  support  through  the  Disruptive  Technologies 
Innovation  Fund  for  cooperation  between  firms  and  public  research  centres,  for 
example  through  collaborative  projects  between  industry  -  including  SMEs  -  and 
research  bodies  is  welcome.  Although  Ireland  provides  a  relatively  high  amount  of 
public support to companies, this support is implemented through a tax credit scheme 
for research and developement, which tends to favour larger, foreign-owned firms and 
has a limited effect on improving the productivity of local Irish firms. The Future Jobs 
Ireland framework identifies key measures that could help address the weaknesses of 
the domestic economy, especially initiatives to strengthen the productivity of domestic 
firms,  in  particular  SMEs.  It  is  important  that  these  measures  are  effectively 
implemented. The crisis also  highlighted the digitalisation needs  of SMEs, related in 
particular to remote work solutions, the training of workers and cyber security. Digital 
infrastructure  is  essential  for  boosting  the  productivity  of  SMEs  and  promoting 
entrepreneurship. Ultrafast broadband is only available to 5% of rural premises, well 
below  the  EU  average  of  29%,  and  Ireland  is  also  one  of  the  EU's  most  expensive 
countries for fixed broadband. With the contract having been signed for a major public 
investment  under  the  National  Broadband  Plan  to  address  infrastructure  gaps,  it  is 
therefore  important  to  closely  monitor  and  ensure  the  timely  implementation  of  the 
rollout  of  the  publicly  supported  ultra  fast  broadband  network,  especially  in  rural 
areas.  

(23)  Tackling aggressive tax planning is key to improve the efficiency and fairness of tax 
systems, as acknowledged in the 2020 euro area recommendation. Spillover effects of 
taxpayers'  aggressive  tax  planning  strategies  between  Member  States  call  for  a 
coordinated  action  of  national  policies  to  complement  Union  legislation.  Ireland  has 
taken steps to address aggressive tax planning practices by implementing international 

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and European agreed initiatives and taking some additional measures at national level. 
However,  the  high  level  of  royalty  and  dividend  payments  as  a  percentage  of  GDP 
suggests that  Ireland’s tax rules are used by companies that engage in aggressive tax 
planning,  and  the  effectiveness  of  the  national  measures  will  have  to  be  assessed. 
Broadening the tax base would make revenue more resilient to economic fluctuations 
and idiosyncratic shocks and strengthen the functioning of automatic stabilisers. The 
high  concentration  of  corporate  taxes,  with  the  top  ten  firms  accounting  for  45%  of 
corporate taxes, their volatility and potentially transitory nature, along with their rising 
share  in  total  tax  proceeds  (record  of  18,7%  in  2018)  underline  the  risks  of  relying 
excessively on these receipts for the financing of permanent current expenditure. 

(24)  Despite efforts to strengthen its anti-money laundering framework, Ireland still faces 
risks  due  to  its  internationally  oriented  economy,  involving  significant  inflow  of 
foreign direct investments, and the presence of complex legal structures  with foreign 
sponsors.  The  national  risk  assessment  is  being  reviewed  to  better  reflect  the  actual 
risk exposure of professionals involved in the provisions of services to companies and 
trusts.  Inadequate  understanding  of  risk  exposure  by  these  professionals  results  in  a 
low reporting of suspicious transactions. The intensity of supervision is inadequate to 
remedy  these  issues  and  does  not  rest  on  a  risk-based  approach,  which  hampers  the 
effectiveness  of  the  anti-money  laundering  framework.  A  national  register  of 
beneficial  owners  has  been  set  up  for  companies,  to  limit  secrecy  and  identify 
beneficial owners. The quality of the information provided and the effectiveness of the 
register needs to be monitored over time. 

to  address  medium- 

(25)  While the present recommendations focus on tackling the socio-economic impacts of 
the  pandemic  and  facilitating  the  economic  recovery,  the  2019  country-specific 
recommendations adopted by the Council on 9 July 2019 also covered reforms that are 
essential 
structural  challenges.  Those 
recommendations remain pertinent and will continue to be monitored throughout next 
year’s  European  Semester  annual  cycle.  That  also  applies  to  recommendations 
regarding investment-related economic policies. The latter recommendations should be 
taken  into  account  for  the  strategic  programming  of  cohesion  policy  funding  post-
2020, including for mitigating measures and exit strategies with regard to the current 
crisis. 

long-term 

to 

(26)  The  European  Semester  provides  the  framework  for  continuous  economic  and 
employment  policy  coordination  in  the  Union,  which  can  contribute  to  a  sustainable 
economy.  Member  States  have  taken  stock  of  progress  regarding United  Nations’ 
Sustainable  Development  Goals  (SDGs)  implementation  in  their  2020  National 
Reform  Programmes.  By  ensuring  the  full  implementation  of  the  recommendations 
below, Ireland will  contribute  to  the  progress  towards  the SDGs and  to  the  common 
effort of ensuring competitive sustainability in the Union.  

(27)  Close coordination between economies in the economic and monetary union is key to 
achieve a swift recovery from the economic impact of the COVID-19. Ireland should, 
as  a  Member  State  whose  currency  is  the  euro  –  and  taking  into  account  political 
guidance by the Eurogroup – ensure its policies remain consistent with the euro area 
recommendations and coordinated with those of the other euro area Member States. 

(28)  Under the 2020 European Semester, the Commission has carried out a comprehensive 
analysis  of  Ireland’s  economic  policy  and  published  it  in  the  2020  country  report.  It 
has  also  assessed  the  2020  Stability  Programme  and  the  2020  National  Reform 
Programme  and  the  follow-up  given  to  the  recommendations  addressed  to  Ireland  in 

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previous years. It has taken into account not only their relevance for sustainable fiscal 
and  socioeconomic  policy  in  Ireland,  but  also  their  compliance  with  EU  rules  and 
guidance,  given  the  need  to  strengthen  the  Union’s  overall  economic  governance  by 
providing Union-level input into future national decisions.  

In  the  light  of  that  assessment,  the  Council  has  examined  the  2020  Stability 
Programme and its opinion8 is reflected in particular in recommendation (1) below.  

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined  the  2020  National  Reform  Programme  and  the  2020  Stability  Programme. 
The present  recommendations take  into account the need to  tackle the pandemic and 
facilitate  the  economic  recovery  as  a  first  necessary  step  to  permit  an  adjustment  of 
imbalances.  Recommendations  directly  addressing  the  macroeconomic  imbalances 
identified by the Commission  under Article 6 of  Regulation  (EU) No 1176/2011  are 
reflected in recommendations (1), (2) and (4), 

HEREBY RECOMMENDS that Ireland take action in 2020 and 2021 to: 

1. 

2. 

3. 

4. 

In  line  with  the  general  escape  clause,  take  all  necessary  measures  to  effectively 
address the pandemic, sustain the economy and support the ensuing recovery. When 
economic  conditions  allow,  pursue  fiscal  policies aimed  at  achieving  prudent 
medium-term  fiscal  positions  and  ensuring  debt  sustainability, while  enhancing 
investment.  Improve accessibility of the health system and strengthen its resilience, 
including by responding to health workforce’s needs and ensuring universal coverage 
to primary care.  

Support  employment  through  developing  skills.  Address  the  risk  of  digital  divide, 
including  in  the  education  sector.  Increase  the  provision  of  social  and  affordable 
housing. 

Continue  to  provide  support  to  companies,  notably  small  and  medium-sized 
enterprises,  especially  through  measures  ensuring  their  liquidity.  Front-load  mature 
public  investment  projects  and  promote  private  investment  to  foster  the  economic 
recovery. Focus investment on the green and digital transition, in particular on clean 
and efficient production and use of energy, sustainable public transport, water supply 
and treatment, research and innovation and digital infrastructure. 

Broaden  the  tax  base.  Step  up  action  to  address  features  of  the  tax  system  that 
facilitate aggressive tax planning, including on outbound payments. Ensure effective 
supervision  and  enforcement  of  the  anti-money  laundering  framework  as  regards 
professionals providing trust and company services. 

Done at Brussels, 

For the Council 
The President 

8 

Under Article 5(2) of Council Regulation (EC) No 1466/97. 

EN 

8 

  EN