COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Ireland Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Ireland
Date: 2021-07-16
Institutions: European Commission, Secretariat-General
Subjects: Ireland, coronavirus disease, digital economy, economic and social cohesion, economic recovery, economic reform, epidemic, green economy, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.7.2021  SWD(2021) 205 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Ireland Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Ireland {COM(2021) 419 final}  
 
 
Table of contents 
1.  Executive summary ............................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter ................................................................................. 5 

2.1.  Macroeconomic outlook and developments since the 2020 country report .................................. 5 

2.2.  Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation .................................................................................................................................................. 8 

2.3.  Challenges related to the green and digital transition................................................................ 13 

2.3.1. 

Green dimension ................................................................................................................. 13 

2.3.2. 

Digital dimension ................................................................................................................ 17 

3.  Objectives, structure and governance of the plan ............................................................................... 22 

3.1.  Overall strategy of the plan ......................................................................................................... 22 

3.2. 

Implementation aspects of the plan ............................................................................................. 24 

4.  Summary of the assessment of the plan .............................................................................................. 29 

4.1.  Comprehensive and adequately balanced response to the economic and social situation .......... 29 

4.2. 

Link with country-specific recommendations and the European Semester ................................ 35 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ...... 44 

4.4. 

The principle of ‘do no significant harm’ ................................................................................... 51 

4.5.  Green transition ........................................................................................................................... 52 

4.6.  Digital transition ......................................................................................................................... 55 

4.7. 

Lasting impact of the plan ........................................................................................................... 59 

4.8.  Milestones, targets, monitoring and implementation .................................................................. 62 

4.9.  Costing ........................................................................................................................................ 64 

4.10.  Controls and audit ....................................................................................................................... 66 

4.11.  Coherence ................................................................................................................................... 70 

Annex: Climate tracking and digital tagging table ..................................................................................... 72 

1 

 
 
 
 
 
 
 
1.  EXECUTIVE SUMMARY  

The COVID-19 pandemic has had a significant impact on the Irish economy, though it was 
the only Member State with positive real GDP growth in 2020. Ireland’s real GDP expanded 
by 3.4% in 2020, driven by exports of multinational corporations headquartered there. However, 
private  consumption  and  investment  fell  sharply.  A  resurgence  of  infections  brought  new 
lockdown  restrictions  early  in  2021  with  yet  another  large  negative  impact  on  private 
consumption.  Nevertheless,  GDP  growth  in  the  first  quarter  was  very  strong,  again  driven  by 
multinationals’  exports, and  a  strong  domestic  rebound  is  expected  from  the  second  quarter  of 
2021  onwards.  Substantial  government  support  prevented  a  surge  in  unemployment  and 
bankruptcies. The official unemployment rate gradually increased from below 5% pre-pandemic 
to 7.8% in May 2021, though the COVID-adjusted unemployment fluctuated between a quarter 
and  a  third  of  the  labour  force  during  peaks  of  restrictions.  The  government  response  to  the 
pandemic had an impact on the general government balance and debt. The general government 
deficit was 5.0% of GDP in 2020 and a budget deficit is also expected in 2021 as the pandemic 
support  continues.  Risks  to  the  fiscal  outlook  are  tilted  to  the  downside  and  reflect  various 
sources  of  uncertainty,  such  as  possible  changes  in  the  international  corporate  taxation 
environment  due  to  Ireland’s  significant  reliance  on  potentially  volatile  corporate  tax  revenue. 
The public debt ratio is expected to increase in 2021 on the back of a sustained deficit. In 2020, 
the  debt  ratio  increased  to  59.5%  of  GDP  despite  nominal  GDP  growth  of  2.9%  in  2020.  The 
debt-to-modified GNI (GNI*) ratio1, a metric that better captures the public debt burden on the 
domestic economy, is projected to have reached almost 106% in 2020, up from 95.6% in 2019.  

The  Irish  recovery  and  resilience  plan  (the  ‘plan’)  amounts  to  EUR  989 938 300  million, 
which is slightly above the maximum financial contribution allocated to Ireland under the 
Recovery  and  Resilience  Facility  (RRF)  of  EUR 988 966 534,  equivalent  to  0.3%  of  2019 
GDP. The plan includes a total of 25 measures (16 investments and 9 reforms) structured around 
three  components:  (i)  advancing  the  green  transition;  (ii)  accelerating  and  expanding  digital 
reforms and transformation; and (iii) social and economic recovery and job creation. Ireland did 
not request any loans. 

The plan has the potential to make a positive contribution to Ireland’s economic rebound 
and accelerate the green and digital transitions. It includes measures to front-load private and 
public green investments and advance environmental, climate, energy and infrastructure projects. 
Targeted measures are expected to support the reduction of greenhouse gas emissions in sectors 
responsible for most of the emissions. The plan also includes reforms and investments that are 

1 Modified Gross National Income (GNI*) reflects the underlying economic activity  more accurately than GDP by eliminating 
some  of  the  impact  of  multinationals.  It  differs  from  actual  GNI  in  that  it  excludes,  for  example,  the  depreciation  of  foreign-
owned,  but  Irish  resident,  capital  assets  (notably  intellectual  property  and  assets  associated  with  aircraft  for  leasing)  and  the 
undistributed profits of firms that have re-domiciled to Ireland. 

2 

 
 
                                                           
set  to  promote  the  digital  transformation  across  society  and  help  improve  the  prospects  for 
welfare and equality, growth and employment.  

The  reforms  and  investments  underpinning  the  plan  can  be  expected  to  contribute  to 
addressing  a  significant  subset  of  the  2019  and  2020  country-specific  recommendations 
(CSRs).  The  plan  focuses  on  reforms  and  investments  facilitating  the  green  and  digital 
transitions, but also on active labour market integration support and upskilling. The investments 
also  contribute  to  the  front-loading  of  mature  public  investment  projects,  the  promotion  of 
private  investment  and  the  use  of  more  direct  funding  instruments  to  stimulate  research  and 
innovation. Furthermore, the plan commits to reforms in the areas of housing, pensions, health 
and regulatory barriers to entrepreneurship, while also introducing measures that are expected to 
partially  address  challenges  related to  anti-money  laundering and  aggressive  tax planning.  The 
reforms  and  investments  in  the  plan  are  also  consistent  with  the  challenges  and  priorities 
identified  in  the  most  recent  Draft  Council  Recommendation  on  economic  policy  in  the  euro 
area2. 

The  plan  pursues  the  general  objective  of  the  Facility  to  promote  the  Union’s  economic, 
social  and  territorial  cohesion  and  is  balanced  in  its  response  to  the  six  policy  pillars 
referred  to  in  Article  3  of  the  RRF  Regulation3.  Considering  all  reforms  and  investments 
envisaged, taking the specific challenges and the financial allocation of Ireland into account, the 
plan  represents  to  a  large  extent  a  comprehensive,  and  adequately  balanced  response  to  the 
economic and social situation.  

The  plan  is  designed  to  support  economic  growth  and  job  creation  through  investments 
and  reforms.  Given  the  size  of  the  RRF  financial  contribution,  the  direct  impact  from  a 
macroeconomic perspective is expected to be small. Investments and policies to improve energy 
efficiency  and  accelerate  digitalisation  are  expected  to  contribute  to  creating  jobs,  as  well  as 
improving productivity  over different horizons. The plan contains a range of measures that are 
expected  to  contribute  to  social  cohesion  by  supporting  employment  prospects,  particularly 
through  creating  work  placement  opportunities,  training  and  educational  programmes.  This  is 
expected to help labour adjustment to the post-crisis structures and has the potential to contribute 
to  growth.  Furthermore,  a  set  of  reform  measures  included  in  the  plan  have  the  potential  to 
contribute to addressing the high need for social and affordable housing and help ensure timely 
access to affordable healthcare of good quality, thereby strengthening social resilience. The plan 
also  includes a range of  measures that may strengthen the capacity of the economic and social 

2 Pending final adoption by the Council, after endorsement by the  European Council. The text agreed by the Eurogroup on 16 
December 2020 is available at: https://data.consilium.europa.eu/doc/document/ST-14356-2020-INIT/en/pdf 
3 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and 
Resilience Facility (hereafter ‘the RRF Regulation’). 

3 

 
 
                                                           
structures and institutions to adjust to and withstand shocks. A well-functioning internal market 
remains an essential element of this endeavour. 

The measures in the plan have the potential to accelerate the green transition and protect 
the environment. They are expected to support Ireland’s decarbonisation and energy objectives 
for  2030,  as  set  out  in  the  national  energy  and  climate  plan  and  in  the  programme  for 
Government,  and  are  thus  a  step  towards  achieving  climate  neutrality  by  2050.  The  plan 
therefore  supports  a  sustainable  recovery  of  the  Irish  economy.  It  includes  a  broad  set  of 
measures aiming at  improving energy  efficiency  in  private and public buildings, decarbonising 
industries,  promoting  sustainable  railway  mobility,  restoring  biodiversity 
the 
rehabilitation  of  peatlands,  improving  water  treatment  and  facilitating  green  research  and 
innovation. The plan also commits Ireland to a speedy entry into force of the amendments to the 
climate law and its associated increase in climate targets, and to securing a significant increase in 
the carbon tax over the RRF period. With respect to the climate tagging of all three components 
in  the  plan,  measures  contributing  to  climate  objectives  account  for  42%  of  the  plan’s  total 
allocation.  Most  measures  in  the  Irish  plan  have  passed  the  ex-ante  assessment  of  the  ‘do  no 
significant harm’ principle. In addition, for some measures, the ‘do no significant harm’ principle 
has  been  reflected  in  the  milestones  and  targets  specified  in  the  Annex  to  the  Commission 
Proposal for a Council Implementing Decision.  

through 

As regards the digital transition, the measures contributing to digital objectives account for 
32% of the financial allocation, which is above the 20% minimum requirement of the RRF 
Regulation.  Component  2  (Accelerating  and  expanding  digital  reforms  and  transformation)  is 
fully  dedicated  to  the  digital  transition.  Several  measures  aim  at  contributing  to  the  digital 
transition by supporting the digitalisation of enterprises, addressing the risk of the digital divide, 
including  in  the  education  sector,  enhancing  digital  skills,  and  supporting  the  development  of 
digital  infrastructure  and  the  delivery  of  digital  public  services.  In  addition,  Component  1  is 
expected to partially contribute to the digital objectives, particularly by supporting digital-related 
research and development activities. 

The  implementation  of  the  envisaged  measures  is  expected  to  have  a  lasting  impact.  The 
plan is fully aligned and integrated into the government’s wider national economic and recovery 
plan,  the  review  of  the  national  development  plan,  and  the  forthcoming  update  of  the  climate 
action  plan.  This  is  expected  to  help  ensure  that  the  implementation  of  the  plan  is  well 
coordinated  and  lasting.  The  plan  includes  several  measures  that  are  expected  to  lead  to 
structural  change  in  public  administration,  housing,  healthcare,  education,  digitalisation  and 
green policies. 

The  plan  provides  an  explanation  of 
framework. 
Responsibilities  for  individual  projects  are  identified  and  coordination  is  to  be  ensured  by  a 
newly  created  Implementing  Body.  The  plan  also  includes  clear  and  realistic  milestones  and 
targets, whereas the proposed indicators for those milestones and targets are relevant, acceptable 

implementation 

internal 

its 

4 

 
 
and robust. They constitute an appropriate system for monitoring the plan’s implementation and 
assess disbursement requests.  

Ireland has provided individual cost estimates for the measures in the plan. The estimates 
and  supporting  documents  show  that  the  costs  are  justified,  reasonable,  plausible  and 
commensurate, in line with the principle of cost-efficiency. The amounts proposed for financing 
were  deemed  appropriate  and  seen  as  establishing  the  plausibility  of  the  cost  estimates  to  a 
medium  extent.  The  avoidance,  detection  and  prevention  of  double  funding  from  the  EU  is 
expected  to  be  ensured  at  all  stages  of  the  projects’  lifecycle,  through  robust  procedures 
structured within the plan. 

Ireland’s  control  and  audit  system  is  adequate  to  prevent,  detect  and  correct  potential 
fraud, corruption and conflicts of interest, and avoid double funding. The system presents a 
robust  process  and  structure,  where  the  roles  and  responsibilities  are  clearly  defined  and  the 
relevant  control  functions  are  appropriately  segregated.  The  proposed  measures  give  assurance 
that  there  is  an  adequate  level  of  control  to  prevent,  detect  and  correct  irregularities  identified 
when  using  funds  provided  by  the  Recovery  and  Resilience  Facility.  Ireland  committed  in 
specific  milestones  to  having  in  place  an  efficient  repository  system  and  to  having  allocated 
sufficient  administrative  capacity  to  perform  such  audits  by  the  time  of  the  first  disbursement 
request. 

The  reforms  and  investments  in  each  of  the  individual  components  are  coherent  and 
targeted to the same objectives.  The components pursue complementary aims. The measures in 
each of the individual components are mutually reinforcing, as investments are accompanied by 
reforms  that  aim  to  address  underlying  structural  challenges.  There  is  an  adequate  balance 
between investments and reforms in view of the main challenges to be addressed, and between 
investments in different territories. 

Table 1: Ratings of the plan under the eleven criteria 
(6) 
Digital 
target 

(3) 
Growth, 
jobs… 

(1) 
Balanced 
Response 

(5) 
Green 
target 

(4) 
DNSH 

(2) 
CSRs 

(7) 
Lasting 
impact 

(8) 
M & T 

(9) 
Costing 

(10) 
Control 
Systems 

(11) 
Coherence 

A 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report  

Ireland’s  economy  grew  in  2020,  driven  by  the  strong  performance  of  multinational 
corporations.  Real GDP grew by 3.4%, making  Ireland the only Member State that registered 
positive growth  in  the  year when the pandemic  erupted. This  growth  was driven by exports  of 
in 
in 
multinational  corporations  headquartered 
pharmaceuticals  and  medical  equipment  (including  COVID-related  products)  and  those 

Ireland,  particularly 

those  specialised 

5 

 
 
operating  in  the  information  and  telecommunication  sectors,  while  the  domestic  economy, 
particularly sectors requiring face-to-face contact, suffered substantially4. Public spending rose in 
order to cushion the economic and social fallout.  

Ireland had entered the COVID-19 crisis with vulnerabilities related to its external, public 
and private sector indebtedness, as identified in the macroeconomic imbalance procedure and 
confirmed by the in depth review. The pandemic has had an uneven impact on these large stock 
vulnerabilities.  In  2020,  Ireland  ran  a  current  account  surplus  and  its  very  negative  net 
international  investment  position  became  less  negative.  Public  debt,  due  to  the  need  to  fund 
various  support  schemes,  has  increased.  Private  debt,  due  to  precautionary  savings  and 
constrained ability to consume, has fallen.  

The  labour  market  was  stabilised  by  government  intervention. The official unemployment 
rate stood at 5.8% in 2020 while the COVID-adjusted unemployment rate (a measure that adds 
the recipients of the pandemic unemployment payment) was 21.7%5, reflecting the degree of the 
government  intervention.  Hours  worked,  another  indicator  of  the  labour  market  health,  were 
9.4% lower in 2020 compared to the previous year. Support by the EU’s SURE instrument, the 
COVID-19  temporary  wage  subsidy  scheme,  has  been  instrumental  in  protecting  existing  jobs 
and cushioning income losses. Overall, about 71% of the COVID-19-related income shock was 
cushioned by the  Irish tax-benefit system, including the emergency measures6.  Income support 
schemes were subsequently extended until the end of 2021. The reopening of the economy is set 
to improve the labour market situation markedly.  

The  COVID-19  crisis  risks  increasing  the  share  of  people  at  risk  of  poverty  or  social 
exclusion. Ireland ranks better than average or among the best performers in the EU in terms of 
income  inequality  after  social  transfers,  unemployment  rate,  early  leavers  from  education  and 
training, and the net earnings of a full-time single worker earning the average wage. However, 
the  employment  and  social  situation  of  vulnerable  groups  remains  a  challenge  and  is  likely  to 
have been exacerbated by the crisis (see Box 3). While the share of people living in low work-
intensity households has been decreasing since 2013, it still remains one of the highest in the EU 
(13.6% in 2019 vs 8.3% in the EU). In the years preceding the COVID-19 crisis, rent increases 
in big cities and an insufficient provision of social and affordable housing have led to persistent 

4

See 

also 

SWD(2021)126, 

Post-Programme 

Surveillance 

Report, 

Ireland, 

Spring 

2021, 

https://ec.europa.eu/info/sites/default/files/economy-finance/ip154_en.pdf 
5 Excluding the months of January and February 2020. 
6 See  Christl, M,  De Poli,  S.,  Figari,  F.,  Hufkens,  T.,  Leventi,  C., Papini,  A.  and  Tumino,  A.  (2021)  “The  cushioning  effect of 
fiscal  policy  in  the  EU  during  the  COVID-19  pandemic”,  JRC  Working  Papers  on  Taxation  and  Structural  Reforms,  02/2021 
(forthcoming);  and  Almeida,  V.,  Barrios,  S.,  Christl,  M.,  De  Poli,  S.,  Tumino,  A.,  Van  der  Wielen,  W.  (2020):  ‘Households´ 
income and the cushioning effect of fiscal policy  measures during the Great Lockdown’, JRC Working Paper on Taxation and 
Structural Reforms, 06/2020, available at https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf. 

6 

 
 
                                                           
housing challenges. Going forward, with  the phasing out  of temporary support  schemes, social 
risks and inequalities are likely to increase.  

The pandemic has somewhat overshadowed the impact of Brexit on the economy, though 
the latter still caused disruptions in specific sectors. The UK and EU concluded a Trade and 
Cooperation Agreement on 24 December 2020. Brexit mostly affected the agri-food sector, due 
to  increased  requirements  in  complying  with  documents  and  border  delays.  On  25  December 
2020, the Commission  adopted its proposal  for a Brexit Adjustment Reserve. The Council and 
the  European  Parliament  reached  a  preliminary  agreement  on  the  draft  Regulation  on  17  June 
2021.  The  Brexit  Adjustment  Reserve  is  set  to  help  counter  the  adverse  economic  and  social 
consequences of Brexit in the Member States and sectors that are worst affected by it, especially 
when it comes to trading and fishing opportunities. Its overall proposed budget is EUR 5 billion 
in  2018  prices.  Ireland  is  expected  to  claim  over  EUR 1 billion  from  the  Brexit  Adjustment 
Reserve. 

HICP inflation in Ireland was low over the recent years and is expected to remain subdued 
despite some increases  in the short run. HICP inflation was negative in 2020 and in the first 
quarter of 2021, amid low oil prices, weak demand and a 2% VAT cut from 1 September 2020 to 
28 February 2021. HICP inflation is set to increase in 2021 due to rising energy prices, supply 
frictions and increased transport cost, in line with the general euro area inflation trend. Inflation 
is  projected  to  reach  1.5%  in  2021  and  increase  to  1.2%  in  2022  on  the  back  of  recovering 
domestic demand. 

In  2020,  Ireland’s  general  government  deficit  was  5.0%  of  GDP,  following  a  surplus  of 
0.5% of GDP in 2019, while general government debt increased by 2.1 percentage points to 
59.5% of GDP. The increase in the deficit was due to discretionary budgetary measures of 3.9% 
of  GDP  in  support  to  the  economy  and  the  operation  of  automatic  stabilisers.  Ireland  also 
provided  liquidity  support  to  companies  and  households  (such  as  guarantees  and  tax  deferrals, 
which do not have a direct and immediate budgetary impact), estimated at 1.2% of GDP. 

According to the latest public debt sustainability analysis, Ireland faces low sustainability 
risk in the medium term and medium risk in the long term7. Financial market perceptions of 
sovereign risk are favourable, as reflected in low sovereign bond yields and credit default swap 
spreads. The interest to revenue ratio was estimated at 4.3% in 2020, compared to 5% in 2019, 
continuing a decreasing  trend from  a 25-year peak of 12.6% in  2013. The general  government 
debt-to-GDP  ratio  remained  below  the  60%  threshold  in  2020.  However,  when  scaling 
government  debt  with  gross  national  income  (GNI)  –  a  more  accurate  measure  of  public  debt 
repayment  capacity  in  Ireland  –  medium-term  vulnerabilities  appear  more  significant.  The 

7 See also COM(2021)529, Omnibus report under Art 126(3) and SWD(2021)126, Post Programme Surveillance Report, Ireland, 
Spring 2021. The Debt Sustainability Monitor 2020 contains detailed methodological explanations. 

7 

 
 
                                                           
Recovery and Resilience Facility is  expected to be a mitigating factor as regards the identified 
debt sustainability risks, as it should support growth potential through investments and reforms8. 

Table 2: Comparison of macroeconomic and budgetary developments and forecasts 

2025 
2019 
COM  COM  RRP  COM  RRP  COM  RRP  RRP  RRP  RRP 

2023  2024 

2021 

2020 

2022 

Real GDP (% change) 

5.6 

3.4 

3.4 

4.6 

4.5 

5.0 

5.0 

3.5 

3.2 

3.1 

2.2 

3.2 

5.0 

4.0 

0.9 

5.7 

5.0 

2.9 

2.3 

-3.5 

-1.5 

18.7 

11.0 

16.3 

10.7 

-15.1 

Employment (% 
change) 
Unemployment rate 
(%) 
HICP inflation (% 
change) 
General government 
balance (% of GDP) 
Gross debt ratio (% of 
GDP) 
Sources: Commission spring 2021 forecast9; RRP – 2021 Stability Programme 
Note: The Stability Programme Update of Ireland also include the projected impact of the recovery and resilience 
plan (RRP).  

59.7 

61.4 

62.2 

59.0 

57.4 

59.5 

59.5 

60.2 

57.7 

55.4 

-2.9 

-2.8 

-0.7 

-0.2 

-5.0 

-5.0 

-5.0 

-4.7 

-1.2 

-0.5 

-0.5 

0.5 

8.2 

6.0 

1.9 

1.6 

8.1 

6.7 

5.5 

0.9 

1.1 

1.3 

1.5 

1.9 

The  macroeconomic  projections  underlying  Ireland’s  recovery  and  resilience  plan  are 
plausible and seem to be conservative, in view of latest data. According to the plan, real GDP 
is expected to grow by 4.5% in 2021 and 5.0% in 2022, which was in line with the Commission 
spring 2021 forecast (see Table 2). However, the first quarter of 2021 outturn was very strong, at 
7.8% real GDP growth quarter on quarter, and high frequency indicators point to a strong second 
quarter.  The  Commission  summer  2021  forecast  hence  projects  real  GDP  to  grow  by  7.2%  in 
2021  and  5.1%  in  2022.  As  the  economy  is  reopening,  more  people  are  returning  to  work 
already,  providing  also  an  upside  to  the  labour  projections.  Nonetheless,  once  the  pandemic 
impact wanes and government support is withdrawn, unemployment might be higher than before 
the crisis due to the potential ‘scarring’ effects and increased skills mismatches. The authorities 
expect  growth  to  moderate  to  3.5%  in  2023,  3.2%  in  2024  and  3.1%  in  2025.  The 
macroeconomic  and  fiscal  outlook  continue  to  be  affected  by  high  uncertainty  related  to  the 
COVID-19 pandemic and its economic consequences. 

8 The impact from the EU-level recovery instruments is included in the debt sustainability assessment only in so far as sovereign 
financing conditions are expected to remain favourable and stable over the medium term.  
9 For  the  sake  of  coherence  in  the  macroeconomic  scenario  presented  by  the  Commission,  the  table  refers  to  the  Commission 
spring  2021  forecast.  According  to  the  Commission  summer  2021  interim  forecast  (containing  updated  data  for  GDP  and 
inflation  only),  real  GDP  has  been  revised  substantially  up  on  the  back  of  a  very  strong  performance  of  multinational 
corporations in the first quarter of the year. In the latest Commission projections, real GDP is expected to grow by 7.2% in 2021 
and 5.1% in 2022, while HICP inflation is expected to be 1.5% in 2021 and 1.2% in 2022. 

8 

 
 
 
 
 
                                                           
2.2. Challenges  related  to  sustainable  growth,  cohesion,  resilience  and  policies  for  the 

next generation  

Ireland  is  facing  intertwined  challenges  to  sustainable  growth,  resilience  and  cohesion, 
requiring  a  comprehensive  policy  response.  An  overarching  objective  of  the  Recovery  and 
Resilience  Facility  is  to  support  measures  along  four  pillars  that  address  these  challenges  (in 
addition to the two RRF pillars supporting the green and digital transitions). First, reforms and 
investments related to economic cohesion, productivity, and competitiveness can help strengthen 
the  growth  potential  of  the  Irish  economy  and  enable  a  sustainable  recovery.  Second,  tackling 
challenges  related  to  social  and  territorial  cohesion  should  ensure  nobody  is  left  behind  in  the 
economic  rebound.  Third,  the  COVID-19  crisis  has  also  highlighted  that  reforms  and 
investments  are  important  for  institutional  resilience,  including  crisis  reaction  capacity  and 
preparedness.  Fourth,  policies  for  the  next  generation,  including  education  and  skills,  can  help 
ensure that young people are not permanently affected by the impact of the COVID-19 crisis. 

Smart, sustainable and inclusive growth 

While Ireland has a business-friendly environment overall, its position in the World Bank’s 
‘ease  of  doing  business’  ranking  has  dropped  slightly.  In  2020,  Ireland  ranked  24th,  down 
from  23rd  in  the  previous  year.  While  Ireland’s  business  environment  generally  remains 
business-friendly,  the  most  problematic  dimensions  for  the  country’s  ranking  are  ‘enforcing 
contracts’  (91st),  ‘registering  property’  (60th)  and  ‘trading  across  borders’  (52nd).  As  regards 
enforcement of contracts, Ireland scores poorly on all three indicators (time required to enforce a 
contract through the courts, cost required and quality of judicial process). 

Despite  a  relatively  large  share  of  high  growth  enterprises  in  Ireland,  challenges  to  fast 
growth  remain.  Fast  growing  enterprises  carry  a  premium  in  a  recovery  context.  It  is  notable 
that in recent  years Ireland’s business economy has had the highest percentage  of fast growing 
enterprises in the EU (16% compared to the EU average of 12% for all sectors in 2018 or 28% 
versus  19%  for  knowledge  intensive  sectors  in  2018).  However,  less  favourable  financing  and 
other  framework  conditions  for  high  growth  enterprises  –  notably  concerning  human  capital 
matters – are causes for concern10. 

Productivity  in  Ireland  remains  very  strong,  compared  to  other  advanced  economies, 
pushed  up  by  a  limited  number  of  multinational  companies.  According  to  the  Central 
Statistics  Office,  the  labour  productivity  growth  rate  of  the  foreign  multinational  companies 
sector was on average 9.3% per year between 2000 and 2018, significantly above the 1.5% of the 

10 See  the  IE  factsheet  in:  Benedetti  Fasil,  C.,  Del  Rio,  J.C.,  Domnick,  C.,  Fako,  P., Flachenecker,  F.,  Gavigan,  J.,  Janiri,  M., 
Stamenov, B. and Testa, G., High Growth Enterprises in the COVID-19 Crisis Context, EUR 30686 EN, Publications Office of 
the European Union, Luxembourg, 2021, ISBN 978-92-76-37269-1 (online), doi:10.2760/63402 (online), JRC124469 

9 

 
 
                                                           
domestic sector and the EU average of 1.3% during the same period. The productivity growth of 
domestic firms is held back by much lower investment than that going into multinational firms, 
which widens the dichotomy between domestic and foreign-owned firms. Technology diffusion 
through  the  presence  of  multinationals  remains  limited.  The  competitiveness  of  Irish  firms, 
particularly small and medium-sized enterprises (SMEs), may be held back by the high cost of 
credit  (including  access  to  short-term  liquidity  and  investment  capital  at  affordable  rates), 
commercial  properties,  insurance  and  legal  services.  Ireland  scores  low  on  the  European 
Investment  Fund’s  SME  access  to  finance  index,  ranking  25th  out  of  28  for  the  sub-indicator 
covering bank loans.  

In  addition  to  differences  in  productivity  across  sectors,  Ireland  is  the  EU  country  that 
experienced  the  greatest  variation  in  productivity  growth  among  its  regions.  Irish regions 
also perform very differently in terms of location factors for enterprises and residents. While the 
Eastern  and  Midland  region  and,  to  a  lesser  extent,  the  Southern  region  offer  attractive  and 
sustainable  environments  for  firms  and  residents,  the  Northern  and  Western  region  has 
comparative  shortcomings  in  terms  of  infrastructure,  market  size  and  efficiency  (Regional 
Competitiveness  Index,  European  Commission,  2019).  Equally,  according  to  Eurostat, 
employment  in  high-tech  and  knowledge-intensive  services  is  concentrated  in  the  Eastern  and 
Midland  (10.5%)  and  in  the  Southern  (9%)  regions,  and  is  significantly  below  the  national 
average in the Northern and Western region (5.9%). This results in stark differences in the GDP 
per  head  of  between  the  three  regions,  with  the  GDP  per  head  in  the  Northern  and  Western 
region  being  about  a  third  of  the  GDP  per  head  in  the  Eastern  and  Midland  region  and  in  the 
Southern region.  

Skill shortages persist in, among other fields, construction, IT, life sciences, and transport, 
exacerbating the difficulties faced by Irish businesses in 2020. A survey conducted in October 
2020 by SOLAS, the Irish state agency for further education and training, shows that over 53% 
of the surveyed science, engineering and technology companies had difficulty hiring experts with 
appropriate skills. The figure was 27% for companies in the construction sector. 

Lending to businesses has fallen since the onset of the COVID-19 crisis, which may reflect 
both a fall in investment and tightened access to finance.  According to the Central Bank of 
Ireland, total lending to enterprises fell on average by 4.6% annually in the second half of 2020. 
SMEs  have  been  particularly  affected,  as  new  lending  to  these  businesses  fell  significantly 
during  the  year  (-17.6%  annually  in  the  second  half  of  2020),  with  the  most  affected  sectors 
being  the  ones  also  most  affected  by  the  pandemic,  notably  real  estate,  transport,  wholesale, 
retail  and  hospitality.  Part  of  this  may  be  due  to  falling  investment,  mainly  in  construction. 
During  2020,  domestic  modified  investment  was  8.5%  below  the  2019  level.  In  addition,  the 
bank  lending  survey  from  the  Central  Bank  of  Ireland  suggests  credit  standards  also  tightened 
moderately in 2020, reflecting the broader economic environment and firm-specific conditions. 

10 

 
 
Some  weaknesses  also  persist  in  the  financing  of  research  and  development  (R&D).  Until 
2018, Ireland had been gradually increasing its investment in R&D to 1.14% of GDP (or 1.87% 
of GNI*), although this had not been sufficient to raise it to the level that would be expected in 
an economy at  Ireland’s overall stage of development. In 2019, despite a continued increase in 
the level of public expenditure, a significant fall in business expenditure on R&D led Ireland’s 
overall research intensity - R&D as a percentage of GDP - to fall to 0.78% (or 1.30% of GNI*), 
which is well below the 2019 EU average of 2.20% and an EU objective of 3%. In addition, a 
significant share of public support for R&D in firms continues to come through the research and 
development tax credit, rather than direct support to SMEs.  

Social and territorial cohesion 

Despite the strong poverty-reducing effect of social transfers, social challenges remain due 
to  the  limited  availability  of  services,  especially  in  disadvantaged  communities,  and 
shortages in affordable and social housing. While the risk of poverty or social exclusion was 
close  to  the  EU  average  in  2019,  child  poverty  remained  consistently  above  the  EU  average 
(23.2% in Ireland vs 22.2% in the EU27), and severe material deprivation increased for the first 
time since 2012. The active inclusion of people furthest away from the labour market continues 
to be hampered by the limited availability of integrated services, including targeted and personal 
social  and  active  labour  market  services.  Homelessness  and  housing  availability,  especially 
affordable and social housing, remain  structural  challenges in  Ireland, having clear detrimental 
impacts on health equity and social cohesion.  

Both the risk of poverty and levels of disposable income vary between the Irish regions. The 
risk  of  poverty  is  below  the  national  average  in  the  Eastern  and  Midlands  (10.8%)  and  at  the 
national  average  in  the  Southern  region  (13.4%),  while  it  is  significantly  above  the  national 
average  in  the  Northern  and  Western  region  (18.9%).  Disposable  income  follows  the  same 
spatial  pattern  and  is  particularly  low  in  predominantly  rural  remote  areas  at  the  border  with 
Northern Ireland and in the centre of the country. 

The  COVID-19  crisis  is  adding  to  the  already  existing  challenges  in  the  labour  market, 
including  the  high  prevalence  of  quasi-jobless  households,  youth  unemployment,  and  the 
increasing  gap  in  gender  employment.  In  2019,  the  proportion  of  households  with  very  low 
work intensity remained the second highest in the EU (13.6% in Ireland vs 8.3% in the EU27), 
while youth unemployment increased from 12.5% in 2019 to 16.8% in the fourth quarter of 2020 
(vs the average of 7.2% in all age groups). The gender employment gap increased for the second 
consecutive  year  in  2019  (to  12.4  percentage  points),  further  diverging  from  the  EU  average 
(11.7  percentage  points  in  2019).  This  situation  might  have  further  deteriorated  due  to  the 
pandemic.  The  employment  gap  between  people  with  and  without  disabilities  remained  one  of 
the highest in the EU (40.3 percentage points). 

11 

 
 
Health, and economic, social and institutional resilience  

Ireland  faces  several  challenges  in  its  healthcare  system,  including  cost-effectiveness, 
recruitment  and  retention  of  healthcare  professionals,  and  certain  deficiencies  in  public 
procurement.  Ireland remains the only country in Western Europe without universal access to 
primary  care.  Challenges  regarding  workforce  planning  have  led  to  a  lack  of  control  over  the 
hiring process of health workers, which in turn has led to repeated budget overspends. The Irish 
healthcare system is relatively expensive compared to the rest of the EU, and the high proportion 
of  non-government  health  spending  contributes  to  driving  up  costs  and  inequity.  In  addition, 
Ireland’s long-term care system is over-reliant on institutional care, while home-care, which is a 
key part of long-term care services in many other EU Member States and is more efficient and 
appropriate  for  addressing  low  to  middle  levels  of  dependency,  has  been  historically 
underprovided.  Another  challenge  Ireland  faces  is  the  recruitment  and  retention  of  healthcare 
workers  to  meet  the  ever-growing  demand  for  healthcare,  despite  comparatively  high  salaries. 
This  is due to  several  factors, including long working hours  and limited access  to  training  and 
career development opportunities. Ireland also witnessed significant medical emigration. Lastly, 
the  Irish  Comptroller  and  Auditor  General  concluded  that  there  is  systematic  non-compliance 
with procurement requirements in the health service, with goods and services being procured in a 
non-competitive manner. 

The  quality  and  efficiency  of  the  justice  system  could  be  improved.  Businesses  face  high 
legal  costs  and  legal  processes  can  be  cumbersome.  According  to  the  2021  EU  justice 
scoreboard, the number of judges per inhabitant remains the lowest in the EU, which could affect 
the efficiency of the Irish justice system. In the justice plan 2021, the government has committed 
to  reviewing  the  numbers  and  types  of  judges  needed  to  ensure  the  efficient  administration  of 
justice  over  the  next  five  years.  The  length  of  proceedings  remains  a  challenge  and  the 
Parliament  is  currently  discussing  on  a  Criminal  Procedure  draft,  which  could  provide  for  a 
faster and more efficient court process for certain offences. Regarding digitalisation of the justice 
system, Ireland scores below the EU average, in particular with regard to the e-filing of incoming 
non-criminal cases, the case management system and the production of statistical data. Measures 
are being taken to address those challenges. 

Regarding  taxation,  several  issues  remain.  First,  the  Exchequer  has  become  increasingly 
reliant on revenues from few multinational firms. The volatile and potentially transitory nature of 
these  revenues,  along  with  a  narrow  tax  base  tend  to  reduce  revenue  stability  and  the 
effectiveness  of  automatic  stabilisers.  Second,  the  limited  application  of  withholding  taxes  on 
royalty and dividend payments going out of Ireland may lead to payments being taxed at a very 
low rate or escaping tax altogether in their destination jurisdiction. 

While  the  Irish  anti-money  laundering  framework  is  strong  in  many  aspects,  challenges 
remain.  Ireland  faces  risks  due  to  its  internationally  oriented  economy  and  complex  legal 
structures.  It  has  just  adopted  a  Bill  transposing  the  most  recent  EU  standards  as  regards  anti-

12 

 
 
money laundering. Ireland completed its updated assessment of legal entities and arrangements 
in  2020,  which  recognised  money  laundering  threats  and  vulnerabilities  of  companies  as 
significant  to  very  significant.  Transparency  of  beneficial  ownership  is  a  key  tool  to  avoid 
misuse of such legal entities and arrangements. For this reason, it is important that the beneficial 
ownership  register  contains  sufficient,  accurate  and  up  to  date  information.  Risk-based 
supervision  of  professionals  servicing  companies  and  trusts  is  yet  to  be  fully  implemented  – 
supervisors of these professionals are often self-regulatory bodies, and there is little evidence of 
them  providing  recommendations,  guidance  or  activity  reports.  A  key  supervisor,  the  Anti-
Money Laundering Compliance Unit, lacks the power to issue administrative penalties for non-
compliance. 

Policies for the next generation, children and youth, including education and skills. 

Progress can still be made in addressing the digital divide, digitalising schools and in digital 
learning. Ireland has implemented the digital strategy for schools (2015-2020) and continues to 
implement the digital learning framework and the supporting investment. Nevertheless, the 2019 
EU survey on ICT in schools showed that only 52% of primary school pupils could access their 
virtual learning environment from outside the school premises, compared to the EU average of 
81%, while only 33% of primary school students attended digitally well-equipped and connected 
schools  (vs  the  EU  average  of  35%),  indicating  further  investment  needs,  in  particular  for 
connectivity and support for the disadvantaged students. According to the 2018 Programme for 
International  Student Assessment  (PISA)  from  the OECD secondary school  students  in  Ireland 
are less likely than students in other countries to use digital devices for classwork in school or at 
home.  As  the  COVID-19  crisis  risks  increasing  educational  inequalities  it  is  essential  that  all 
schools and especially disadvantaged students have better access to digital infrastructure.  

2.3. Challenges related to the green and digital transition  

An  overarching  objective  of  the  Recovery  and  Resilience  Facility  is  to  support  the  green 
and digital transitions, for which Ireland still faces several challenges.  Ireland’s ambition to 
‘future proof its economy and society’ includes the goal of achieving climate neutrality by 2050, 
as well as objectives regarding online and digital services, remote working, and broader use of 
automation – including through education and skills. The climate action plan and national energy 
and  climate  plan  (NECP)  represent  a  breakthrough  compared  to  previous  policy,  and  the 
Programme  for  Government  commits  Ireland  to  increase  further  its  greenhouse  gas  emissions 
reduction  targets.  This  section  sets  out  where  Ireland  stands  in  achieving  targets  related  to  the 
green and digital transitions. 

2.3.1.  Green dimension 

The recovery and resilience plan should contribute to the green transition and at least 37% 
of the financial allocation needs to contribute to climate objectives. The measures in the plan 
should  contribute  to  achieving  the  2050  climate  neutrality  objective,  and  the  2030  energy  and 

13 

 
 
climate  targets,  taking  into  account  Member  States’  national  energy  and  climate  plans.  They 
should  also  contribute  to  meeting  environmental  targets  for  waste,  water,  pollution  control, 
sustainable  mobility,  biodiversity  protection  and  restoration,  marine  and  water  resources,  and 
support  the  transition  to  sustainable  food  systems  as  well  as  to  a  circular  economy,  while 
ensuring that nobody is left behind.  

Greenhouse gas emissions 

The  climate  action  plan  raises  the  level  of  ambition  in  tackling  climate  challenges. 
Achieving  the  2030  climate  and  energy  targets  will  nevertheless  be  a  major  challenge.  Recent 
trends  in  emissions,  particularly  for  transport  and  buildings,  and  the  sectoral  composition  of 
these emissions point to insufficient mitigation efforts so far and highlight the scale of the efforts 
ahead. Prior to the COVID-19 pandemic, Ireland projected that in 2020 emissions in sectors not 
covered by the EU emissions trading system (EU ETS) would have fallen by 2-4% compared to 
2005 levels – well short of the -20% target. Similarly, Ireland is expected to have fallen short of 
the  2020  energy  efficiency  and  renewable  energy  targets  by  several  percentage  points,  and 
progress remains particularly slow in the heating and cooling and transport sectors11. This means 
that the emissions trajectory between 2021 and 2030 will be steep and requires mitigation efforts 
to be significantly intensified. 

The  climate  action  plan  is  a  breakthrough  after  previously  subdued  policy  action.  The 
climate  action  plan  represents  a  transformative  agenda  for  the  entire  economy  and  some 
important measures have been implemented already, including (i) the carbon tax increases under 
Budget 2020 and Budget 2021 with further annual increases planned to reach a level of EUR 100 
per tonne of CO2 by 2030, and (ii) a new renewable electricity support scheme to help achieve 
the 70% renewable electricity target by 2030. The success of the climate action plan will largely 
depend on its consistent and effective implementation, as well as on policies and measures being 
constantly  reviewed  and  updated.  The  NECP  mitigation  target  is  in  line  with  current  EU 
legislation at around -30% in sectors not covered by the EU ETS12. While Ireland’s contribution 
to  the  EU’s  renewable  energy  target  –  34.1%  of  gross  final  energy  consumption  by  2030  –  is 
ambitious, the level of ambition for energy efficiency remains low. 

Ireland  recently  announced  it  would  step  up  its  mitigation  ambition  by  2030.  The 
Programme  for  Government  commits  Ireland  to  reducing  overall  greenhouse  gas  emissions  by 

11 Tsemekidi-Tzeiranaki,  S.,  Paci,  D.,  Cuniberti,  B.,  Economidou,  M.  and  Bertoldi,  P.,  Analysis  of  the  Annual  Reports  2020 
under the Energy Efficiency Directive, EUR 30517 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 
978-92-76-27416-2, doi:10.2760/180952, JRC122742. 
12 Economidou, M.,  Ringel,  M.,  Valentova,  M.,  Zancanella, P.,  Tsemekidi-Tzeiranaki,  S.,  Zangheri, P., Paci,  D.,  Serrenho,  T., 
Palermo, V., Bertoldi, P., 2020, National Energy and Climate Plans for 2021-2030 under the EU Energy Union: Assessment of 
the Energy Efficiency Dimension, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020, 978-92-76-
27013-3, doi:10.2760/678371, JRC122862 

14 

 
 
                                                           
7%  per  year  on  average  over  2021-2030,  which  is  a  significant  improvement  compared  to  the 
ambition set out under the NECP. To fulfil such a level of ambition over the rest of the decade, 
additional  policies  and  measures  will  need  to  be  devised  rapidly  under  the  climate  action  plan 
and a  revised  NECP.  In  the Finance Act  of 2020,  Ireland set  out  that the carbon tax would be 
increased to EUR 100 per tonne of CO2 by 2030, with an increase of EUR 7.50 each year until 
2029 and of EUR 6.50 in 2030. 

Implementing policies and measures will be critical to Ireland achieving the 2030 Climate 
targets. The climate action plan and NECP will steer public, business and household investment 
towards low or zero emission projects, but the impact on actual investment decisions will only 
materialise  fully  if  policies  and  measures  continue  to  be  implemented  over  the  coming  years. 
Achieving  the  planned  reduction  in  emissions  –  in  particular  in  agriculture,  buildings  and 
transport  –  will  require  further  complementary  and  specific  measures  to  go  from  broader 
objectives  and  ambitions  to  implementation.  Ireland  will  also  need  to  specify  its  strategy  for 
tackling greenhouse gas emissions from agriculture, mainly biogenic methane. 

Energy efficiency 

Energy  efficiency  policies  remain  pertinent  given  energy  consumption  increased  in  the 
years  before  the  onset  of  the  COVID  crisis.  While  the  national  energy  and  climate  plan 
presented a comprehensive set of measures, Ireland’s contribution to the EU target still remains 
low in ambition.  

The  potential  for  energy  efficiency  is  particularly  high.  First,  the  long-term  renovation 
strategy  adopted  in  2020  is  expected  to  play  an  important  role  in  addressing  investment  needs 
and delivering the various economic and health  benefits  of building retrofits. Second, the 30% 
CO2  emissions  reduction  and  50%  energy  efficiency  targets  for  the  public  sector  are  also 
expected to play an important driving role. Lastly, whilst the largest investment in the recovery 
and resilience plan is a rail project, other national measures, including a target of 926 000 electric 
vehicles on the road by 2030, or aiming at increasing investments in public transport and modal 
shift, will contribute to tap into the energy saving potential of the transport sector. 

Energy  efficiency  will  also  be  crucial  in  supporting  the  achievement  of  other  objectives. 
This is the case in particular as regards security of supply and renewables, but also in the context 
of the expected rapid development of data centres.  

Share of renewables in energy mix 

Ireland has made progress in transforming its electricity system. It has accelerated its phase-
out of coal and peat and reached a 43% renewables share in its electricity consumption in 2020. 
However, to reach the 70% renewable electricity target by 2030 the deployment of renewables, 
in particular onshore and offshore wind, needs to be considerably speeded up. The upgrading of 
network infrastructure and storage, as well as interconnectors, such as the Celtic Interconnector 

15 

 
 
between Ireland and France, will also be key in  facilitating the uptake of renewable generation 
and reducing energy prices.  

Investments needs 

Ireland has not yet comprehensively evaluated private and public investment needs related 
to  the  2030  targets  and  the  transition  towards  a  climate-neutral  economy.  Such  an 
assessment is critical in order to inform the design of policies and measures to achieve long-term 
climate mitigation objectives. At the same time, Ireland’s NECP and climate action plan provide 
a strong basis for the design of climate and energy-related aspects of its plan, including in energy 
efficiency,  energy  infrastructure  and  renewables,  sustainable  transport  and  climate  governance. 
Regarding  climate  governance,  enacting  the  Climate  Action  and  Low-Carbon  Development 
(Amendment)  Bill  2021  is  a  major  priority.  This  new  legislation  is  expected  to  define  the 
framework  under  which  national  and  sectoral  5-yearly  carbon  budgets  will  be  set,  as  well  as 
define targets against which progress will be monitored. 

Sustainable transport 

Making Ireland’s transportation sustainable and meeting  emissions reduction  targets will 
be  challenging,  although  some  progress  has  been  made  in  facilitating  investments.  On the 
back  of  the  economic  recovery  since  2013,  transport  emissions  gradually  increased  from  10.8 
million  tonnes  of  CO2  equivalent  in  2012  to  12.2  million  tonnes  in  2019.  Transport  was  the 
second largest contributor among non-ETS sectors to greenhouse gas emissions at 20.1% of the 
total  in  2018,  only  behind  agriculture  (32.7%),  with  private  cars  being  the  largest  source  of 
emissions within the sector. New technologies, infrastructure investment and roll-out, as well as 
fiscal measures, may help Ireland meet its emissions reduction targets. Specific actions will also 
need  to  be  taken  to  reduce  diesel  emissions  from  transport,  which  is  responsible  for  excessive 
nitrogen dioxide emissions in breach of the Air Quality Directive. 

Biodiversity and zero pollution 

Ireland faces significant challenges in its transition to a circular economy. Waste generation 
in Ireland is 20% higher than the EU average, and progress made on increasing recycling rates 
has  slowed  over  recent  years.  The  circular  use  of  materials  in  Ireland  was  only  1.6%  in  2019, 
well  below  the  EU  average  of  11.9%.  More  incentives  and  investments  are  needed  to  equip 
Ireland with a more ambitious waste and circular economy strategy, while avoiding the pitfalls of 
creating excessive incineration capacity.  

Challenges  also  remain  as  regards  protecting  and  restoring  healthy  ecosystems.  While 
Ireland  has  largely  completed  its  terrestrial  Natura  2000  designations,  there  is  still  work  to  be 
carried out for marine sites where Ireland has one of the smallest protected area networks (2% 
compared  to  an  EU  average  of  9%).  Progress  on  this  will  be  particularly  important  given 
Ireland’s  ambitions  to  expand  offshore  renewables,  in  order  to  ensure  that  such  expansion  is 
underpinned with  a  clear understanding of potential impacts  on marine habitats.  Key pressures 

16 

 
 
such  as  those  from  agriculture  also  present  a  challenge.  Within  the  designated  Natura  2000 
network  of  sites,  only  15%  of  habitats  are  in  favourable  condition,  with  over  half  showing 
ongoing  decline.  The  Irish  environmental  strategy  does  not  seem  to  address  sufficiently  the 
recent rise in ammonia emissions to air, as well as the increased pressure on water quality and 
biodiversity from the agricultural sector. Furthermore, the climate action plan and NECP do not 
provide  enough  details  on  how  Ireland  intends  to  increase  its  carbon  sinks,  in  a  manner  that 
would also deliver on its biodiversity protection targets.  

Less than 50% of waste waters in Ireland are treated in compliance with EU law, although 
some  progress  has  been  made  in  facilitating  investments  in  this  area. The most significant 
pressure on surface water quality in Ireland stems from excessive nutrients from both untreated 
waste  waters  and  agriculture.  Significant  upgrades  in  infrastructure  are  needed  as  is  a  more 
robust approach to controlling emissions to water from agriculture. Table 3 provides an overview 
of  Ireland’s  objectives,  targets  and  contributions  under  Regulation  (EU)  2018/1999  of  the 
European Parliament and of the Council of 11 December 2018 on the Governance of the Energy 
Union and Climate Action. 

Table 3: Objectives, targets and contributions under Regulation (EU) 2018/1999 

National targets and contributions  

Binding target for greenhouse gas 
emissions compared to 2005 under the 
Effort Sharing Regulation (%) 

Latest 
available 
data 

2020 

2030 

Assessment of 2030 
ambition level 

-4% 

-20% 

-30%  As in the ESR 

National target/contribution for 
renewable energy: Share of energy from 
renewable sources in gross final 
consumption of energy (%) 

12% 
(2019) 

National contribution for energy efficiency: 

16% 

34.1% 

Sufficiently 
ambitious (31% is 
the result of the 
RES formula) 

Primary energy consumption (Mtoe) 

Final energy consumption (Mtoe) 

14.7 

12.4 

13.9 

13.7 

Low ambition 

11.7 

11.2 

Low ambition 

Level of electricity interconnectivity (%) 

7.4% 

N.A. 

N.A 

N.A. 

Source: Assessment of the final national energy and climate plan of Ireland, SWD (2020) 906 final 

2.3.2.  Digital dimension 

The  recovery  and  resilience  plan  should  contribute  to  the  digital  transition  and  at  least 
20% of the financial allocation needs to contribute to digital objectives. The measures in the 
plan should, inter alia, contribute to the digital transformation of the economic and social sectors 
(including  public  administrations,  businesses  and  healthcare  systems).  The  objective  of  the 

17 

 
 
 
 
 
 
 
 
 
 
 
measures in the plan should be to improve not only the competitiveness, but also the resilience, 
agility and security of private and public actors, all while ensuring inclusiveness. 

Ireland performs above the EU average in the Digital Economy and Society Index (DESI). 
It ranked sixth in the EU in DESI 2020.  

Ireland is doing particularly well on integrating digital technologies in businesses, ranking 
first in the EU for the integration of digital technology and maintaining a leading position 
in  the  use  of  e-commerce  by  SMEs  in  DESI  2020. More specifically, according to  Eurostat, 
32%  of  SMEs  sold  online  in  2020  and  18%  sold  cross-border  in  2019,  well  above  the  EU 
averages of 17% and 8% respectively. On the other hand, Irish SMEs are closer to or even below 
the EU average when it comes to adopting other e-business technologies (such as supply chain 
management, enterprise resource planning, customer relationship  management, radio  frequency 
identification). According to the European Investment Bank, the construction and manufacturing 
sectors, which together account for almost a third of SMEs in Ireland, are lagging behind other 
sectors in adopting digital technologies. 

The use of digital technologies in the public sector has also been above the EU average. In 
DESI 2020, Ireland ranked ninth in the digital public services. In 2020, Ireland performed very 
well  in  open  data  and  provision  of  digital  public  services  for  citizens  and  businesses. 
Digitalisation  efforts  could  further  improve  the  efficiency  of,  and  simplify  formalities  in,  the 
customs  and  judicial  systems.  Ireland  is  also  above  EU  average  in  the  2020  eGovernment 
Benchmark  report.  Ireland  scores  particularly  well  on  user-centricity  of  digital  public  services. 
However,  significant  improvements  can  still  be  made  on  cross-border  electronic  identification, 
both for citizens and for businesses. 

While  Ireland  has  faced  infrastructural  challenges  for  the  digital  transition  in  the  past, 
there  have  been  significant  connectivity  improvements  in  2020.  Notably,  fixed  very-high 
capacity network coverage rocketed from 35% of households in 2019 to 83% in 2020 and is now 
well  above  the  EU  average  of  59%13.  Ireland  is  also  continuing  to  take  measures  to  further 
improve connectivity14. Nevertheless, the share of households with fixed broadband connection 
is  not  fully  even  across  regions  (88%  in  urban  areas,  against  82%  in  intermediate  areas15 and 
69%  in  rural  areas  in  2020),  which  indicates  an  area  for  improvement.  The  long  delay  in 
transposing  Article  8  of  the  Broadband  Cost  Reduction  Directive  2014/61/EU  could  hinder 
further  deployment  of  high-speed  electronic  communications  networks  to  reach  all  end-users. 
Regarding  the  pioneer  5G  spectrum  bands  awards,  Ireland  has  already  assigned  the  3.6  GHz 

13 Broadband coverage in Europe studies for the European Commission by IHS Markit, Omdia and Point Topic. 
14 By  way  of  illustration,  the  implementation  of  a  publicly  funded  scheme  under  the  Irish  National  Broadband  Plan  to  ensure 
delivery of high-speed broadband services is ongoing. 
15 Intermediate urbanised area with between 100 and 499 inhabitants/km2. 

18 

 
 
                                                           
band in 2017, the auction for the 700 MHz band commenced in April 2021 and for the 26 GHz 
band Ireland had found no evidence of market demand during a public consultation However, the 
monitoring  of  market  demand  is  ongoing.  In  addition,  as  Ireland  is  only  connected  to  other 
Member  States  by  way  of  non-EU  countries  (the  United  Kingdom  and  the  United  States), 
multiple plans for direct submarine cable systems are particularly relevant16. 

In DESI 2020, Ireland continued to rank 11th in human capital. Further efforts to improve 
digital  skills  are  important,  as  a  relatively  low  percentage  of  the  population  has  at  least  basic 
digital  skills  (according  to  Eurostat,  53%  in  2019,  below  the  EU  average  of  56%).  This  may 
hinder  people  without  basic  digital  skills  from  actively  participating  in  a  society  increasingly 
reliant  on  digital  tools  and  could  hold  back  improvements  in  the  productivity  and 
competitiveness  of  Irish  companies.  Although  Ireland  aims  to  address  these  shortages  in  its 
‘Future  Jobs  Ireland  2019’  framework,  action  remains  limited.  While  people’s  digital  skills 
continue  to  be  improved  through  dedicated  programmes,  such  as  the  explore  and  skills  to 
advance programmes and the digital skills for citizens grant scheme, there is no evidence yet that 
these programmes are significantly addressing the digital divide. 

Ireland appears to be on course to achieving the objectives of its ‘Innovation 2020’ strategy 
for R&D, science and technology. It is currently developing a successor strategy (2021-2027). 
Progress  made  so  far  includes  the  creation  and  maintenance  of  research  centres  by  Science 
Foundation Ireland. Ireland has also established  a Disruptive Technologies Innovation Fund, to 
encourage industry – especially SMEs – and the research sector to collaborate on developing and 
deploying  disruptive  technologies  and  applications  on  a  commercial  basis.  Ireland’s  other 
initiatives  to  forge  a  close  relationship  between  companies  and  research  institutes  and  to  help 
SMEs  profit  from  such  relationships  are  ‘technology  centres’,  ‘technology  gateways’  and 
‘knowledge transfer Ireland’. 

The expansion of the digital sector should not come at the expense of rising greenhouse gas 
emissions.  The  activities  of  large  IT  multinationals,  especially  as  they  involve  data  centres, 
generate a high level of demand for electricity. Therefore, ensuring that further expansion in the 
sector  does  not  lead  to  increased  CO2  emissions  and  compromise  Ireland’s  climate  objectives 
and  commitments  will  require  not  only  that  the  share  of  renewables  in  electricity  production 
reaches the projected targets, but that this also happens in the context of rising electricity demand 
from the IT sector. Ireland is making progress in that regard. 

Efforts  are  underway  to  improve  the  development  and  deployment  of  advanced 
technologies  in  Ireland,  including  the  adoption  of  an  Artificial  Intelligence  (AI)  strategy. 

16 Such  as  a  project  to  connect  to  Portugal  for  which  financing  is  not  yet  completed  and  a  project  to  connect  to  Norway  and 
Denmark that does not yet have a licence. 

19 

 
 
                                                           
Only  35%  of  businesses  in  Ireland  use  at  least  one  AI  technology  (below  the  EU  average  of 
42%),  and  regarding  the  uptake  of  two  or  more  AI  technologies  Ireland  is  among  the  bottom 
three  in  the  EU  (14%  of  businesses,  below  the  EU  average  of  25%).  To  accelerate  the 
development and deployment of advanced technologies, CeADAR (Ireland’s national centre for 
applied data analytics and AI) has been approved for public funding, matched with a contribution 
from industry and competitive sources. Moreover, the Commission selected CeADAR to form a 
network  for  cross-border  cooperation  on  AI,  to  help  SMEs  benefit  from  it.  Ireland  is  also  a 
member of the European High-Performance Computing (HPC) Joint Undertaking. To make full 
use  of  its  supercomputing/HPC  potential,  Ireland  needs  to  increase  its  supercomputing 
capabilities,  step  up  HPC  scientific  and  industrial  application,  foster  SME  uptake  of  HPC  and 
strengthen the national HPC competence centre with advanced education and training activities. 
Finally,  Ireland  advocates  that  all  new  government  systems  exploit  the  opportunities  of  cloud 
deployment and has announced a review of all existing systems for cloud capability.  

Figure 1: Digital Economy and Society Index 2020 – relative performance by dimension 

Note: EU aggregate corresponds to the EU-28, based on the 2020 DESI report. 

20 

 
 
 
 
Box 1: Progress towards the Sustainable Development Goals 

Sustainable Development Goals and the four dimensions underpinning the Annual Sustainable Growth 
Strategy. 

The objectives of the Sustainable Development Goals (SDGs) have been integrated in the European Semester since 
the  2020  cycle.  This  provides  a  strong  commitment  towards  sustainability  in  coordination  of  economic  and 
employment  policies  in  the  EU.  In  that  respect,  this  section  outlines  Ireland’s  performance  with  respect  to  SDGs 
with particular relevance for the four dimensions underpinning the 2021  annual sustainable growth strategy and of 
relevance  to  the  recovery  and  resilience  plans  (green  transition,  fairness,  digital  transition  and  productivity,  and 
macroeconomic stability), indicating possible areas where investments and reforms in line with the objectives of the 
RRF could further accelerate the progress on the SDGs. 

Green Transition 

Ireland can still improve its performance in addressing SDGs related to the green transition. The country has mixed 
results  on  the  use  of  circular  material  (SDG11  –  ‘sustainable  cities  and  communities’  and  SDG12  –  ‘responsible 
consumption and production’): waste generation in Ireland is higher than the EU average, while at the same time the 
recycling  rate  has  stagnated  over  the  last  few  years  and  remains  below  EU  average.  On  SDG7  –  ‘affordable  and 
clean energy’,  Ireland is almost at EU average:  while it  has performed  well on  ‘energy affordability’, its share of 
renewable energy in gross final energy consumption was 12.0% in 2019, below the EU average (19.7%), making it 
dependent  on  imported  fossil  fuels.  Ireland  also  lags  behind  the  EU  average  in  SDG13  –  ‘climate  action’  as  the 
recent trend in emissions is not in line with climate objectives. However, progress is being made on this SDG, as the 
mitigation  ambition  for  2030  is  being  stepped  up  significantly  and  associated  policies  and  measures  are  being 
prepared, alongside a new and significantly reinforced climate governance framework.  

Fairness 

21 

 
 
 
In the years preceding the COVID-19 crisis, Ireland performed relatively well in terms of fairness. For instance, the 
ratio of total income received by the top quintile to that of the bottom quintile of households decreased from 4.8 in 
2012  to  4.0  in  2019  –  a  relatively  low  value  when  compared  to  an  EU-27  average  of  5.0  in  2019.  Ireland  made 
significant progress in addressing SDG 1  – ‘no poverty’ and SDG 8 – ‘decent work and economic growth’. In the 
five years to 2018, Ireland surpassed the EU average level in almost all dimensions related to these SDGs. However, 
for 2019, there were some signs of a deteriorating performance. For the first time since 2012, the shares of people 
who are severely materially deprived and people living in very low work intensity households increased. The share 
of people living in overcrowded conditions increased for the first time  since 2015. Within SDG 8 – ‘decent  work 
and  economic  growth’,  Ireland  continued  to  perform  well,  except  for  the  share  of  people  who  are  inactive  due  to 
caring responsibilities, which remained well above the EU average in 2019. Furthermore, Ireland scored moderately 
well within SDG 5 – ‘gender equality’. However, the gender employment gap continued to increase and remained 
above  the  EU  average  in  2019,  having  narrowed  considerably  in  the  period  leading  to  2012.  Ireland  performed 
consistently above the EU average in SDG 4 – ‘quality education’. 

Digital transition and productivity 

As  mentioned above, Ireland performs  well overall in SDG 8 – ‘decent  work and economic growth’ as  well as in 
SDG 9  –  ‘industry,  innovation,  and  infrastructure’.  Ireland  performs  very  well  regarding  R&D  related  budget 
allocations  for  the  ICT  sector  as  a  share  of  total  R&D  related  budget  allocations:  in  2018  Ireland  had  the  second 
highest  share  in  the  EU  (15%).  By  further  intensifying  policy  efforts,  Ireland  could  make  further  progress  on  the 
SDGs related to the digital transition and productivity as several challenges remain. Gross domestic expenditure on 
R&D  was  only  0.8%  of  GDP  in  2019  (or  1.3%  of  GNI*),  compared  to  the  EU-27  average  of  2.2%  and  an  EU 
objective of 3%. Moreover, although gross domestic expenditure on R&D is growing in absolute terms, Ireland has 
not achieved the target of 2% of GDP by 2020 and is now aiming to reach that target only in 2025.  Regarding the 
business R&D intensity rate in ICT, Ireland scored below the EU-28 average in 2017.  

Macroeconomic stability 

While Ireland is performing well in SDG 8 – ‘decent work and economic growth’, the pandemic heightened risks of 
a reversal in the gains of recent years. The share of young people neither in employment nor in education has been 
steadily declining from 22.3% in 2011 to 11.2% in 2019, but due to the pandemic this share increased to 13.4% in 
2020.  

3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1. Overall strategy of the plan  

The  Irish  plan  aims  to  address  climate,  biodiversity,  and  digitalisation  challenges,  in  the 
context  of  transitioning  to  a  more  sustainable  society  and  economy  as  Ireland  recovers 
from  the  COVID-19  pandemic.  The  plan  includes  9  reforms  and  16  investments,  covering  a 
range of challenges identified in the context of the European Semester and the country-specific 
recommendations addressed to Ireland, while focussing predominantly on addressing the twin – 
digital  and  green  –  transition,  as  well  as  supporting  the  economic  and  social  recovery  and  job 
creation. The plan’s strategy is structured around three components. 

The first component focusses on advancing the green transition. The component includes two 
reforms  and  seven  investments,  for  a  total  financial  envelope  of  EUR  518  million.  The 
component  has  an  overall  climate  contribution  of  37%,  and  a  digital  contribution  of 

22 

 
 
approximately 2%. The component contributes to addressing  Ireland’s climate and biodiversity 
challenges  and  aims  to  accelerate  the  decarbonisation  of  the  Irish  economy.  It  includes  the 
introduction  of  key  environmental  policies  that  are  expected  to  strengthen  the  overall  green 
governance framework, as well as commitments to reduce greenhouse gas emissions by 51% in 
2030  compared  to  2018  levels.  Measures  in  the  component  aim  to  direct  relevant  funding 
towards  decarbonising  projects,  such  as  retrofitting  of  residential  buildings  and  reducing 
emissions  in  the  enterprise  sector,  and  towards  green  data  systems  that  have  the  potential  to 
support  businesses  in  accelerating  their  efforts  to  reduce  emissions.  The  component  also 
addresses  sustainable  transport  through  an  investment  that  aims  to  prepare  for  the  future 
electrification  of  railways  in  Cork  and  addresses  transport  congestion.  A  number  of  measures 
contribute to biodiversity and enhancing ecosystem resilience and rehabilitation while increasing 
the  carbon  sink.  Measures  to  encourage  research  and  innovation  also  form  part  of  this 
component.  

The  second  component  centres  on  accelerating  and  expanding  digital  reforms  and 
transformation.  The  component  includes  one  reform  and  six  investments,  for  a  total  financial 
envelope of EUR 291 million. The component has an overall climate contribution of almost 2%, 
and  a  digital  contribution  of  29%.  The  component  addresses  the  challenges  of  the  digital 
transformation by supporting the digitalisation of public services and companies, and improving 
digital  skills.  The  objective  of  the  component  is  to  accelerate  and  expand  the  country’s  digital 
transformation  by  supporting  the  digitalisation  of  enterprises,  addressing  the  risk  of  the  digital 
divide,  including  in  the  education  sector,  enhancing  digital  skills,  and  supporting  the 
development of digital infrastructure and the delivery of digital public services. 

The  third  component  aims  to  support  social  and  economic  recovery  and  job  creation.  The 
component  includes  six  reforms  and  three  investments,  for  a  total  financial  envelope  of 
EUR 181 million.  The  component  has  an  overall  climate  contribution  of  3%.  The  measures  in 
this component aim to: (i) keep those who are unemployed close to the labour market; (ii) equip 
the  Irish  workforce  with  the  necessary  future-oriented  skills  that  are  required  to  boost  the 
innovation and productivity of the SME sector and skills, including in support of climate action; 
and (iii) contribute to strengthening the overall social and economic policy framework, to help 
maximise investments in activation support and upskilling. The component addresses a range of 
challenges: (i) the need to foster activation strategies; (ii) the need to address skill shortages and 
prepare  the  workforce  for  the  green  and  digital  transitions;  (iii)  the  need  to  lower  regulatory 
barriers  to  entrepreneurship;  (iv)  the  need  to  strengthen  the  anti-money  laundering  framework; 
(v) the need to address features of the tax system that facilitate aggressive tax planning; (vi) the 
need  to  implement  pension  reform  plans;  (vii)  the  need  to  address  shortages  in  social  housing 
supply  and  improve  housing  affordability;  and  (viii)  the  need  to  improve  the  accessibility, 
resilience, and cost-effectiveness of the healthcare system.  

23 

 
 
Table 4: Components and associated costs 
Component 
1 Advancing the green transition 
2 Accelerating and expanding digital reforms and transformation 
3 Social and economic recovery and job creation 

Costs (EUR million) 
518 
291 
181 

3.2. Implementation aspects of the plan 

Consistency with other programmes 

The  plan  is  aligned with  Ireland’s  national  policy  framework  and  is  consistent  as  well  as 
complementary  with  other  national  initiatives  and  priorities.  The  priorities  and  policy 
objectives  of  Ireland’s  national  development  plan  and  economic  recovery  plan  are  reflected  in 
the  recovery  and  resilience  plan,  as  are  European  priorities  such  as  ensuring  a  just  transition, 
advancing  the  twin  transition  and  ensuring  a  high  level  of  social  and  territorial  cohesion.  The 
plan increases the level of ambition associated with the national energy and climate plan. Ireland 
is  in  the  process  of  updating  its  climate  action  policies  and  plans  to  reflect  the  new  more 
ambitious climate targets set out in the recovery and resilience plan.  

Consistency  with  the  challenges  and  priorities  identified  in  the  most  recent  euro  area 
recommendation 

The  Irish  recovery  and  resilience  plan  is  consistent  with  the  challenges  and  priorities 
identified  in  the  most  recent  Draft  Council  Recommendation  on  economic  policy  in  the 
euro area17. First, the plan contains several measures that are expected to support the recovery. 
In this respect, the work placement experience programme is expected to help combat the labour-
market impact of the crisis, while the eHealth and health reform measures have the potential to 
support the accessibility and cost-effectiveness of the healthcare system. Second, measures in the 
plan  also  have  the  potential  to  further  improve  convergence,  resilience,  and  sustainable  and 
inclusive  growth.  The  measures  in  components  1  and  2  of  the  plan  are  expected  to  increase 
public investment and foster private investment to support a recovery consistent with the green 
and  digital  transitions,  while  also  aiming  to  support  a  shift  towards  carbon  pricing  and 
environmental  taxation.  The  measures  under  component  3  have  the  potential  to  strengthen 
inclusion  and  support  job  transitions,  as  well  as  to  make  further  progress  in  combatting 
aggressive  tax  planning.  Third,  the  plan  is  expected  to  strengthen  national  institutional 
frameworks, by among others digitalising public administration and aiming to lower barriers to 
entrepreneurship with an SME test. Finally, the plan has the potential to strengthen the European 

17 Pending final adoption by the Council, after endorsement by the European Council. The text agreed by the Eurogroup on 16 
December 2020 is available at: https://data.consilium.europa.eu/doc/document/ST-14356-2020-INIT/en/pdf 

24 

 
 
 
                                                           
regulatory and supervisory framework by reinforcing the supervision and enforcement capacities 
of Ireland’s anti-money laundering framework. 

Coordination and implementation framework 

The  Implementing  Body  for  the  plan  will  be  located  in  the  Department  of  Public 
Expenditure and Reform. This body is expected to be responsible for the strategic monitoring 
and management of the plan. It is expected to report to the Minister for Public Expenditure and 
Reform, who should inform the government cabinet every six months on the implementation of 
the  committed  milestones  and  targets,  relating  both  to  investments  and  reforms,  along  with 
Ireland’s draw down of funds. The Implementing Body should act as a single point of contact for 
the  Commission  on  a  day-to-day  basis.  It  is  expected  to:  (i)  provide  all  necessary  reports  and 
requests for disbursements; (ii) ensure coordination with other relevant authorities; (iii) report on 
progress on milestones and targets; (iv) oversee implementation of control measures; (v) provide 
technical and systems support; and (vi) communicate at national level to promote and publicise 
the Union’s funding. It is also expected to collect information on EU funding sources from the 
RRF information system, as shared by Departments and other bodies responsible for individual 
projects.  This  information  is  expected  to  be  communicated  to  other  fund  managers  in  order  to 
allow for complementarity to be assessed and to mitigate risks of double funding. 

The Implementing Body is expected to work in close cooperation with the newly established 
Delivery  Committee.  The  Delivery  Committee  should  meet  on  at  least  a  quarterly  basis, 
maintain  oversight  over  the  implementation  of  the  plan,  and  address  issues  as  they  arise.  The 
Delivery Committee is to be chaired by the Department of Public Expenditure and Reform, and 
deputy co-chaired by the Department of Taoiseach and Department of Finance, at senior official 
level.  These  departments  were  also  leading  the  preparatory  technical  discussions  with  the 
European Commission. While the Implementing Body and Delivery Committee are expected to 
monitor  the  implementation  of  the  plan  and  be  responsible  for  exchanges  with  the  EU 
institutions,  responsibility  for  implementing  the  individual  measures  lies  with  the  relevant 
Departments and bodies (as per the Table 5 below).  

25 

 
 
Table 5: Departmental responsibility per measure  
Responsible 
Department/other body 
Department 
Communications, 
Action and Environment 

of 
Climate 

1.1 Derisking a low cost residential 
retrofit loan scheme 

Investments 

Reforms 

1.8. Climate Action and Low 
Carbon Development 
(amendment) Bill 

1.6. Enhanced rehabilitation of peatlands 

Department of Enterprise, Trade 
and Employment 

1.2 Accelerate decarbonisation of the 
enterprise sector 

3.4. Reducing regulatory barriers 
to entrepreneurship.  

Department of Transport 

2.2. Programme to drive digital 
transformation of enterprise in Ireland 

1.4. Enable future electrification through 
targeted investment in Cork commuter 
rail  

Department of Social Protection  3.1.  Work 
programme 

placement 

experience 

Department of Finance 

1.9. Carbon tax  

3.6. Aggressive tax planning 

3.7. Pensions 

Department of Health 

2.6. Suite of eHealth projects 

3.9 Health reforms 

Department  of  Further,  Higher 
Education, Research, Innovation 
and Skills 

1.5. National grand challenges 
programme 

2.7. Address digital divide and 
enhancing digital skills (with 
D/Education and Skills) 

3.2. SOLAS recovery skills response 
programme 

3.3. Technological universities 
transformation fund 

Department of Housing, Local 
Government and Heritage 

Department of Education and 
Skills 

Department of Justice  

Central Statistics Office 

1.7. River basin management plan - 
enhanced ambition programme 

3.8. Increase provision of social 
and affordable housing 

2.3. Programme to provide digital 
infrastructure and funding to schools 

2.4. Provision of an online response 
option for the census of population 

2.7. Address digital divide/ digital 
skills (with D/ Further, Higher 
Education, Research, Innovation 
and Skills) 

3.5. Anti-money laundering  

Office of the Government Chief 
Information Officer (OGCIO) 

2.5. Using 5G technologies to drive a 
greener more innovative Ireland  

26 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Responsible 
Department/other body 

Investments 

Reforms 

2.1 Development of a shared government 
data centre 

Office of Public Works (OPW) 

1.3 Public sector retrofit pathfinder  

project 

Gender equality and equal opportunities for all  

With  regard  to  gender  equality  and  equal  opportunities  for  all,  the  plan  describes 
challenges  regarding  gender  equality  as  well  as  challenges  faced  by  persons  with 
disabilities,  Roma  and  Travellers,  LGBTIQ+18 people  and  people  with  a  minority  racial 
background  in  Ireland. The section on gender equality and equal opportunities for all briefly 
explains  which  reforms  and  investments  contribute  to  overcoming  the  challenges  identified, 
while the detailed descriptions in part 2 of the plan also include information on whether and how 
equality considerations were taken into account in each measure. Several measures are expected 
to contribute to addressing challenges related to gender equality and equal opportunities for all. 
The plan refers notably to the work placement experience programme and the SOLAS recovery 
skills  response  programme  aiming  to  provide  work  experience,  reskilling  and  upskilling 
opportunities to workers adversely impacted by the COVID-19 crisis – among whom women in 
vulnerable  situations  might  be  overrepresented.    With  regard  to  monitoring,  the  plan  refers  to 
overall  employment  levels  disaggregated  by  gender  and  age,  as  well  as  to  the  gender 
employment  gap  as  key  metrics,  which  are  due  to  be  used  at  the  national  level  to  measure 
Ireland’s  recovery  efforts,  including  the  contribution  of  the  plan.  The  plan  also  refers  to  the 
Public  Service  Equality  and  Human  Rights  Duty  and  to  the  cross-governmental  equality 
strategies,  which  aim  to  address  the  particular  needs  of  specific  groups  such  as  Travellers  and 
Roma, people of African or Asian descent, LGBTIQ+, migrants and persons with disabilities. It 
points  to  the  disproportionate  impact  of  the  COVID-19  crisis  on  these  groups,  including  in 
relation to housing conditions, health status and the loss of jobs in sectors highly impacted by the 
pandemic. 

Stakeholder consultations 

The  consultation  process  was  relatively  brief.  In  February  2021  the  Department  of  the 
Taoiseach  opened  a  public  consultation  website  setting  out  process  and  parameters  for  the 
recovery and resilience plan, and requested stakeholder input on two questions:  

18 Lesbian, gay, bisexual, transgender and intersex people 

27 

 
 
 
 
 
 
                                                           
 

 

‘What  areas  should  Ireland  prioritise  for  investments  and  reforms  for  inclusion  in  the 
plan?’ 
‘What  Country  Specific  Recommendations  received  by  Ireland  in  2019  and  2020  are 
considered  the  most  relevant  for  reflection  upon  in  Ireland’s  National  Recovery  and 
Resilience Plan?’  

Stakeholders  could  provide  their  contribution  during  a  20-day  period,  and  the  government 
received over 110 written submissions, including from regional representatives, political parties, 
business associations, trade unions, youth organisations, environmental organisations, academia, 
other civil society stakeholders, and members of the public. The submissions were summarised 
and shared with relevant government Departments as part of the plan development.  

A summary of the public consultation process and how this consultation has been reflected in the 
plan is included in the plan itself. 

Security self-assessment 

The  plan  does  not  include  a  security  self-assessment  for  investments  in  digital  capacities 
and connectivity. The connectivity measures included in the plan do not involve the deployment 
of public 5G networks. 

Cross-border projects 

Ireland  included  one  multi-country  project  in  its  plan  to  support  the  digitalisation  of 
companies  in  Ireland,  particularly  of  SMEs.  To  tackle  the  unbalanced  digitalisation  among 
companies (see Section 2.3), the plan includes the programme to drive digital transformation of 
companies,  particularly  SMEs,  across  all  sectors  in  Ireland.  Digital  transition  of  the  Irish 
enterprise  through  this  programme  is  expected  to  be  further  supported  through  Ireland’s 
participation in the European digital innovation hubs (EDIHs) network, in the context of a multi-
country  project.  The  establishment of four EDIHs  and the  creation of  clusters anchored by the 
EDIHs  are  expected  to  be  an  important  facilitator  of  cross-border  collaboration  which  is  also 
expected to strengthen value chains. 

Communication 

The plan contains a short description  of a communication strategy. A dedicated website is 
expected to ensure delivery of communications on the plan. The website www.gov.ie is a central 
portal for all government services, communications and information in Ireland, and the recovery 
and resilience plan webpage is expected to act as the main repository of information. A detailed 
plan  for  communication  actions  at  national  and  measure  levels  should  be  developed,  to  raise 
public  awareness,  promote  the  benefits  of  EU  funding  and  give  visibility  to  the  reforms  and 
investments.  The  Implementing  Body  is  expected  to  be  responsible  for  all  communication 
actions at programme level. There is no further specification of these actions. The plan indicates 

28 

 
 
that an appropriate funding statement will be a condition of funding for beneficiaries, which is in 
line with the requirements of Article 34(2) of the RRF Regulation. 

It  is  essential  that  the  described  communication  plan  be  fully  developed  and  implemented. 
Coordination between EU and national  authorities, as mentioned in the recovery and resilience 
plan, should be pursued to maximise the impact and effectiveness of communications. 

State aid 

State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience  Facility. Union funds channelled through the authorities of Member States, like the 
RRF funds, become State resources and can constitute State aid if all the other criteria of Article 
107(1)  TFEU  are  met.  When  this  is  the  case  and  State  aid  is  present,  these  measures  must  be 
notified and approved by the Commission before Member States can grant the aid, unless those 
measures are covered by an existing aid  scheme or comply  with  the applicable conditions  of a 
block  exemption  regulation,  in  particular  the  General  Block  Exemption  Regulation  (GBER) 
declaring certain categories of aid compatible with the internal market in application of Articles 
107 and 108 TFEU19. When State aid is present and it requires notification, it is the duty of the 
Member  State  to  notify  State  aid  measures  to  the  Commission  before  granting  them,  in 
compliance  with  Article  108(3)  TFEU.  In  this  respect,  the  State  aid  analysis  carried  out  by 
Ireland in the plan cannot be deemed a State aid notification. In as far as Ireland considers that a 
specific  measure  contained  in  the  plan  entails  de  minimis  aid  or  aid  exempted  from  the 
notification  requirement,  it  is  the  responsibility  of  Ireland  to  ensure  full  compliance  with  the 
applicable rules. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation 

The  Irish  plan  explains  in  detail  how  it  addresses  the  six  pillars  of  Article  3  of  the  RRF 
Regulation,  namely:  (i)  green transition,  (ii) digital transformation,  (iii) smart,  sustainable and 
inclusive  growth,  (iv)  social  and  territorial  cohesion,  (v)  health  and  economic,  social  and 
institutional resilience, and (vi) policies for the next generation.  Table 6 below summarises the 
coverage of each of the components in the Irish plan to one or more of the six pillars. 

19 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1 

29 

 
 
                                                           
Table 6: Coverage of the six pillars of the RRF by the Irish plan components 

Green 
transition 

Digital 
transformation 

Smart, 
sustainable 
and 
inclusive 
growth 
● 

Social and 
territorial 
cohesion 

Health and 
economic, 
social and 
institutional 
resilience 
● 

Policies 
for the 
next 
generation 

● 

○ 

● 

○ 

● 

● 

1 Advancing the green 
transition  
2 Accelerating and 
expanding digital 
reforms and 
transformation 
3 Social and economic 
recovery and job 
creation 
Key:  “●”  investments  and  reforms  of  the  component  significantly  contribute  to  the  pillar;  “○”  the  component 
partially contributes to the pillar 

● 

● 

● 

○ 

● 

● 

● 

● 

Overall, the plan is adequately balanced and focuses on Ireland’s main challenges. The plan 
proposes  an  appropriate  overall  balance  of  reforms  and  investments  addressing  the  six  pillars 
(see  Table  6),  reflecting  the  overall  financial  allocation  as  well  as  the  challenges  the  country 
faces.  

Pillar I: Green transition  

The  green  transition  is  supported  predominantly  through  nine  investments  and  two 
reforms that provide a roadmap to a low-carbon future for the Irish economy. The reforms 
enshrine key climate targets in national legislation, strengthen the climate governance framework 
and dis-incentivise the use of fossil fuels through carbon taxation. These reforms commit Ireland 
to  a  51%  reduction  in  greenhouse  gas  emissions  compared  to  2018  levels  by  2030  and  to 
becoming  a  climate  neutral  society  (achieving  net  zero  greenhouse  gases  emissions)  by  2050. 
The  carbon  tax  includes  successive  annual  increases  in  the  carbon  tax  rate,  by  EUR  7.50  per 
tonne of CO2 per year, following a trajectory that would lead to a rate of EUR 100 per tonne of 
CO2 in 2030. The measures in the plan are aligned with the national energy and climate plan for 
2021-2030. 

Investments  in  the  plan  contribute  to  enhancing  biodiversity,  expanding  sustainable 
transport  and  accelerating  decarbonisation  efforts.  The  plan  supports  carbon  abatement 
measures through retrofitting and energy efficiency measures that have the potential to contribute 
to reducing greenhouse gas emissions. The construction of a shared Government data centre is 
expected to also lead to significant energy savings. The largest investment in the plan targets the 
transport  sector.  The  investment  in  the  Cork  commuter  rail  aims  to  enable  the  future 
electrification  of  railways  in  the  Cork  metropolitan  area  and  to  expand  sustainable  mobility 
policy in the region that should reduce car use and increase the uptake of public transport, thus 
contributing  to  reducing  emissions.  The  plan  includes  support  for  research,  development  and 

30 

 
 
 
 
 
 
innovation,  a  substantial  portion  of  which  is  earmarked  for  green  projects.  The  plan  also 
contributes  to  increased  biodiversity  through  the  restoration  and  rehabilitation  of  peatlands. 
Investments  in  waste  water  treatment  plans  are  expected  to  also  contribute  to  environmental 
objectives.  In  addition,  the  SOLAS  green  skills  action  programme  is  expected  to  contribute  to 
upskilling efforts that have a clear focus on improving skills to progress the green transition and 
support climate action. 

Pillar II: Digital transformation  

The plan’s measures related to digital transformation are well anchored in the analysis of 
Ireland’s  main  challenges  in  digitalisation. While Ireland performs above the EU average in 
the Digital Economy and Society Index (DESI) (see Section 2.3), it still faces some fundamental 
challenges notably related to human capital.  

Component  2  (Accelerating  and  expanding  digital  reforms  and  transformation)  is 
dedicated to the digital transition.  Several measures aim to contribute to the digital transition 
by supporting the digitalisation of enterprises, addressing the risk of the digital divide, including 
in  the  education  sector,  enhancing  digital  skills,  and  supporting  the  development  of  digital 
infrastructure and the delivery of digital public services.  

Component 1 is also expected to partially contribute to the digital transformation. The plan 
contributes  to  addressing  the  key  digital  challenges  by  incentivising  research  teams  to  develop 
viable  practical  innovative  solutions.  The  digital  dimension  of  the  national  grand  challenge 
programme focuses on eGovernment, eHealth and eInclusion. 

Pillar  III:  Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs, 
productivity,  competitiveness,  research,  development  and  innovation,  and  a  well-functioning 
single market with strong SMEs 

All  components  of  the  plan  are  expected  to  significantly  contribute  directly  to  the  third 
pillar.  The green and digital components of the plan focus on smart and sustainable growth in 
particular, while the social and economic component of the plan has notable elements covering 
inclusive growth. 

The plan includes several  measures  that are expected to contribute to economic cohesion, 
jobs, productivity, competitiveness. It has a strong focus on facilitating the green transition. In 
particular,  investment  in  the  Cork  commuter  rail  is  expected  to  support  economic  cohesion  by 
enhancing  the  strategic  potential  of  Cork  as  a  regional  economic  driver  and  to  act  as  a 
counterbalance  to  Dublin.  Measures  to  improve  energy  efficiency,  such  as  labour-intensive 
renovations,  are  expected  to  contribute  to  creating  jobs.  Activation  support  and  upskilling 
measures,  such  as  the  work  placement  experience  programme  and  the  SOLAS  recovery  skills 
response  programme  aim  to  reinforce  these  efforts,  while  also  contributing  to  social  inclusion. 
Investment in five new and emerging technological universities aims to complement these efforts 
by building capacity in education and training in technological universities.  

31 

 
 
Supporting these efforts are measures that focus on research, development and innovation. 
The  national  grand  challenge  programme  aims  to  facilitate  the  realisation  of  research  and 
innovation  projects  across  Government,  on  themes  such  as  climate,  health,  digital  and 
agriculture. The plan also supports the establishment of four European digital innovation hubs. 

The  plan  is  also  expected  to  contribute  to  a  well-functioning  internal  market  with  strong 
SMEs.  SMEs  are  generally  supported  by  the  above-mentioned  measures,  which  have  the 
potential to improve productivity and competitiveness. In addition, the SME test has the potential 
to reduce regulatory barriers to the business activity of SMEs. Finally, the plan aims to support 
the digital transformation of SMEs. 

Pillar IV: Social and territorial cohesion 

Several  measures  in  the  plan  are  expected  to  contribute  to  social  cohesion.  The  work 
placement experience programme (WPEP) and the SOLAS recovery skills response programme 
focus  on  activation  support  and  upskilling,  with  the  aim  to  improve  labour  market  outcomes. 
WPEP targets jobseekers who have been unemployed for six months or more, supporting them 
with  work  placement,  training,  and  an  allowance.  The  SOLAS  recovery  skills  response 
programme seeks to equip workers with green skills and skills to transition into growth sectors of 
the economy by offering a range of educational and training programmes. Reforms also seek to 
improve the provision of social and affordable housing by improving the development of public 
land  for  the  delivery  of  housing  and  introducing  schemes  that  could  increase  housing 
affordability for low-income households. Finally, the long-term sustainability of welfare systems 
is expected to be supported by reforms that simplify and harmonise the supplementary pension 
landscape.  

Other measures also have the potential to contribute to territorial cohesion by addressing 
regional  disparities.  The  technological  universities  transformation  fund  is  expected  to 
contribute  to  tackling  regional  disparities  by  building  capacity  in  education  and  training  in 
regionally  based  technological  universities.  Investment  in  the  Cork  commuter  rail  aims  to 
support  the  sustainable  growth  of  the  metropolitan  area  by  facilitating  sustainable  urban 
development.  The  investment  in  the  suburban  rail  network  is  expected  to  provide  greater 
integration  with  other  existing  and  future  public  transport  services  in  the  Cork  area.  The 
rehabilitation of 33 000 hectares of peatlands is expected to contribute to the just transition in the 
Midlands, a territory whose economy has been hit by the exit from peat for electricity generation. 
In  addition,  the  plan  also  aims  at  bridging  the  regional  and  digital  divide  by  ensuring  that 
learners  of  (post)-primary  schools  are  equipped  with  the  appropriate  digital  skills.  Digital 
transformation  of  Irish  education  at  all  levels  (schools,  tertiary,  lifelong  learning)  has  the 
objective to mainstream essential digital skills across all settings. By way of illustration, the plan 
contains  measures  that  aim  to  bring  connectivity  to  990  schools,  many  of  which  are  in  rural 
areas.  In  addition,  the  scheme  aiming  at  the  digital  transformation  of  enterprise  in  Ireland  is 

32 

 
 
expected  to  target  enterprises  across  the  country,  thereby  also  providing  support  and 
opportunities for companies located in less productive regions. 

Pillar  V:  Health,  and  economic,  social  and  institutional  resilience,  with  the  aim  of,  inter  alia, 
increasing crisis preparedness and crisis reaction capacity 

The plan contributes to the fifth pillar, as all components directly contribute to health and 
economic,  social  and  institutional  resilience.  In particular, the plan includes investments and 
reforms of the healthcare system, measures to facilitate the green and digital transitions for both 
businesses and the workforce, and measures that may improve the effectiveness and resilience of 
public administration.  

Measures  in  the  plan  are  expected  to  improve  the  healthcare  system’s  resilience.  The 
introduction  of  a  digital  ePharmacy  solution  in  hospitals  is  expected  to  support  effective 
management  of  the  health  service  and  enable  the  integrated  care  delivery  system.  The 
deployment  of  an  integrated  financial  management  system  aims  to  provide  financial  and 
procurement  efficiencies,  improve  transparency  and  ultimately  increase  the  capability  of  the 
finance function to support the health system. The introduction of the ‘public only’ Sláintecare 
consultant contract has the potential to improve the cost-effectiveness of the healthcare system, 
by  ensuring  all  capacity  currently  available  in  the  public  system  is  used  only  for  public 
healthcare  activity.  The  expansion  of  participation  in  the  chronic  disease  management 
programme is expected to make the health system more resilient by reducing the number of non-
elective hospital admissions and by reducing bed days related to chronic disease treatment. The 
operationalisation of community healthcare networks may help build capacity in community care 
and help build more effective multi-disciplinary teams. 

By facilitating the green and digital transitions for both businesses and the workforce, the 
plan  has  the  potential  to  reinforce  economic  and  social  resilience.  The  plan  is  expected  to 
contribute to facilitating the green transition of enterprises, by improving their carbon footprint 
metering  systems,  without  entailing  operational  losses.  The  plan  aims  also  to  incentivise 
enterprises to invest in abatement opportunities through support that is expected to contribute to 
decrease significantly the payback period of these investments. The plan  is expected to support 
upskilling and reskilling efforts with a focus on the green transition, and thereby support climate 
action.  The  provision  of  social  and  affordable  housing  is  expected  to  abide  by  environmental 
standards, thereby contributing to the green transition whilst promoting social resilience. 

The plan also addresses digitalisation needs of the Irish economy that were highlighted by 
the  COVID-19  containment  measures.  The  measure  related  to  digitalisation  of  companies, 
mainly SMEs, is expected to reinforce their economic and social resilience and strengthen their 
capacity  to  participate  in  value  chains  across  the  EU,  including  through  establishment  of  Irish 
European  digital  innovation  hubs.  Long  term,  the  programme  to  provide  digital  infrastructure 
and  funding  to  schools  is  expected  to  contribute  to  strengthening  the  sustainable  growth 
potential, employment opportunities and resilience of young people. The reform measures under 

33 

 
 
the digital component are expected to ensure that learners at all levels (schools, tertiary, lifelong 
learning) develop foundational skills to enable them to take part in the digital economy. Finally, 
the  activation  support  and  upskilling  programmes  are  expected  to  help  the  Irish  workforce 
transition  towards  new  employment  opportunities,  including  in  ICT  programming  and  web 
development.  

The  effectiveness  and  resilience  of  public  administration  is  expected  to  be  increased 
through  several  measures.  The plan aims at  reinforcing the government’s digital  capabilities. 
As  currently  there  are  disparate  inefficient  Government  server  rooms  and  data  centres  that  are 
sub-optimal  in  terms  of  location,  operational  and  cyber  resilience,  and  physical  risk,  the  plan 
aims to develop a shared Government data centre. In addition, the plan supports the digitalisation 
of  the  census  operation.  The  next  census  in  Ireland  is  due  in  2026  and  is  expected  to  be 
conducted  through  a  newly  developed  platform  to  enable  households  to  complete  their  census 
return online. The measure also aims to better capture and analyse the data, to reduce both the 
burden on survey respondents and the cost to the State of collecting data while maintaining its 
quality  and  confidentiality.  It  also  has  a  reuse  potential  for  any  large-scale  data  collection  by 
public authorities. The introduction of the SME test is expected to help limit regulatory obstacles 
faced by SMEs when starting or growing their business. The reinforcement of the Anti-Money 
Laundering  Compliance  Unit’s  capacity  to  conduct  inspections,  combined  with  the  risk 
assessment of trust or company service providers, is expected to improve anti-money laundering 
supervision,  while  reforms  also  have  to  potential  to  strengthen  anti-money  laundering 
enforcement.  

Pillar VI: Policies for the next generation, children and the youth, such as education and skills  

The  plan  contributes  to  the  sixth  pillar,  as  two  out  of  the  three  components  directly 
contribute  to  policies  for  the  next  generation.  Measures  in  the  plan  aim  to  help  the  next 
generation develop the necessary digital skills and support young people in gaining or regaining 
their footing in the labour market. 

Several measures support the next generation by ensuring they can develop the necessary 
digital  skills  for  the  future.  The  programme  to  provide  digital  infrastructure  and  funding  to 
schools  is  expected  to  enable  embedding  digital  technologies  in  teaching  and  learning  and 
contribute to the development of key digital skills, as well as mitigate and lessen the educational 
and  social  impact  of  the  crisis  to  ensure  an  inclusive  recovery.  The  new  Digital  Strategy  for 
Schools  aims  at  realising  the  potential  and  further  embedding  of  digital  technologies  in  school 
activities. Ireland’s third ICT skills action plan aims to increase the number of ICT graduates by 
over 65% by the end of 2022. Finally, a grant is expected to support disadvantaged students in 
higher and further education in accessing ICT devices to facilitate the shift to online and blended 
models of learning. These measures are expected to address the risk of digital divide by focusing 
on digital skills throughout the education  system and hence making it more resilient and better 
able to cope with disruptions with a specific focus on the next generation.  

34 

 
 
The young unemployed are mentioned in the plan as a target group specifically benefitting 
from  the  reskilling  and  upskilling  measures.  The  plan  notes  that  young  people  are 
overrepresented in  the sectors that have been most  severely impacted by the COVID-19 crisis. 
They  are  thus  likely  to  particularly  benefit  from  the  work  placement  opportunities,  associated 
allowances  and  training  opportunities  to  be  supported  by  the  plan.  Finally,  the  technological 
universities  transformation  fund  is  expected  to  support  regionally  based  higher  education  and 
training, which may help improve the skills of young people and address regional disparities. 

Conclusion of the assessment under criterion 2.1 in Annex V to the RRF Regulation 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Ireland,  its  recovery  and 
resilience plan represents to a large extent a comprehensive and adequately balanced response to 
the economic and social situation, thereby contributing appropriately to all six pillars referred to 
in Article 3 of the RRF Regulation, taking the specific challenges and the financial allocation of 
Ireland  into  account.  This  would  warrant  a  rating  of  A  under  the  assessment  criterion  2.1  in 
Annex V to the RRF Regulation. 

4.2. Link with country-specific recommendations and the European Semester  

The  plan  provides  a  response  to  a  significant  subset  of  challenges  faced  by  the  Irish 
economy. The plan introduces reforms and investments aimed at addressing a significant number 
of challenges identified in the European Semester in 2019 and 2020. It contributes to addressing 
country-specific recommendations (CSRs) related to  sustainable public transport, water, digital 
infrastructure, the digital divide in education, research and innovation, the front-loading of public 
investment, the promoting of private investment, employment through active integration support 
and  upskilling,  regulatory  barriers  to  entrepreneurship,  anti-money  laundering,  aggressive  tax 
planning,  social  and  affordable  housing,  pensions,  and  healthcare.  Several  of  the  reforms  and 
investments also take into account regional disparities. Nonetheless, given the modest size of the 
financial  contribution  and  the  entrenched  nature  of  some  of  the  challenges,  further  efforts  are 
needed in several areas in the coming years. Finally, some CSRs have already been addressed in 
a broadly satisfactory manner outside the plan, namely support to companies, particularly SMEs, 
through  ensuring  their  liquidity  (CSR  2020.3.1),  increasing  access  to  affordable  and  quality 
childcare (CSR 2019.2.2), and investment-related policy focused on the green transition (CSRs 
2020.3.4 and 2019.3.1).  The government has also fully put into place robust emergency policy 
measures to mitigate the negative economic impact of the crisis (CSR 2020.1.1). These included 
discretionary  budgetary  measures  of  3.9%  of  GDP  in  support  of  the  economy,  which 
complement the operation of automatic stabilisers. Measures related to these areas were therefore 
not incorporated in the plan. 

A  major  objective  of  the  plan  is  to  accelerate  the  green  transition,  consistently  with  the 
CSRs for 2019 and 2020 (CSRs 2019.3 and 2020.3).  Achieving the 2030 climate and energy 
targets,  while  transitioning  to  a  circular  economy,  and  protecting  and  restoring  healthy 
ecosystems,  will  be  a  major  challenge.  The  component  relating  to  the  advancing  of  the  green 

35 

 
 
transition includes a very broad scope of measures, promoting energy renovation for private or 
public  buildings,  aiming  at  decarbonising  enterprises,  promoting  sustainable  transport, 
addressing  biodiversity  challenges  through  the  rehabilitation  of  peatlands  and  improvement  of 
water treatment. 

The plan contains measures to improve efficiency in the clean and efficient production and 
use  of  energy  (CSR  2020.3.4).  In  this  regard,  the  plan  includes  two  reforms.  A  first  reform 
consists  in  the  entry  into  force  of  the  Climate  Action  and  Low  Carbon  Development 
(amendment)  Bill.  Second,  a  carbon  tax  is  expected  to  help  decarbonise  the  economy  by  dis-
incentivising  the  use  of  fossil  fuels  and  encouraging  the  use  of  greener  fuels  by  industry  and 
society.  

The plan includes investment in sustainable transport (CSRs 2019.3.2 and 2020.3.5). Road 
congestion  around  larger  cities,  combined  with  the  need  to  decarbonise  the  transport  sector, 
points  to  investment  opportunities  in  transport  infrastructure.  The  plan  contains  a  significant 
investment included in component 1, accounting for 17% of the total cost of the plan, which aims 
to  enable  the  future  electrification  of  Cork  commuter  rail.  The  measure  includes  three  sub-
investments. The first sub-investment includes the creation of an additional through-running line, 
with an additional platform at Kent station. The second sub-investment includes double tracking 
of the current single line between Glounthaune and Midleton. The third sub-investment relates to 
the  re-signalling  of  the  lines  to  facilitate  increased  frequency  of  services  and  the  subsequent 
electrified service. Most importantly, Ireland’s commitment to purchase either electric or battery 
electric fleet is expected to contribute to the decarbonisation of the rolling stock. In addition this 
measure aims at bridging territorial divides by providing greater integration with other existing 
and future public transport services in the Cork area. 

The plan includes measures that are expected to improve water supply and treatment (CSR 
2020.3.6). The plan addresses waste water treatment plants across Ireland. It includes a measure 
dedicated  to  waste  water  treatment  that  is  expected  to  contribute  to  the  sustainable  use  and 
protection of water. The main aim of the measure is to advance 10 priority waste water treatment 
plant projects whose discharges have been identified as putting significant pressures on receiving 
water  bodies.  In  addition,  the  rehabilitation  of  peatland  is  expected  to  lead  to  enhanced 
biodiversity20. It is also expected to contribute to water quality improvements, increased carbon 
storage and reduced carbon emissions.  

The  plan  includes  measures  that  support  the  digital  transition,  including  through 
investment  in  digital  infrastructure  (CSRs  2019.3.4  and  2020.3.8).  Digital  infrastructure  is 

20 The rehabilitation of peatlands also aims at bridging territorial divides by contributing to the just transition in the Midlands, a 
territory whose economy has been hit by the exit from peat for electricity generation. 

36 

 
 
                                                           
essential for boosting the productivity of SMEs and public services. The measures envisaging the 
building of a low latency edge platform and the development of a shared Government data centre 
focus the investment on the digital transition and in particular on the digital infrastructure. In a 
similar  vein,  the  suite  of  eHealth  projects  advances  the  development  of  digital  infrastructure 
required to meet health demands and the integration of health services, which may further drive 
the  digital  transformation  in  the  public  service.  The  measure  to  support  the  digitalisation  of 
companies in Ireland aims to help them undertake transformative digitalisation of their business 
processes  to  increase  value  to  customers.  The  programme  to  provide  digital  infrastructure  to 
schools  is  expected  to  facilitate  the  use  of  cloud  computing  solutions  and  reduce  the  need  for 
physical  equipment,  thereby  advancing  digital  transition.  The  online  census  response  option 
measure  focuses  on  digital  transition  by  reforming  a  paper  based  and  manually  intensive  data 
collection  operation  into  a  digital  and  more  automated  operation  and  by  providing  a  digital 
service to every household in the country. The reform measures have the potential to help create 
an environment where people have the required skills to engage fully in, and take advantage of, 
the digital transition.  

The  plan  is  also  expected  to  address  the  risk  of  digital  divide,  including  in  the  education 
sector (CSR 2020.2.2). Disparities and regional divide related to digital remain in Ireland. Some 
reform  measures are expected to  address  the risk of digital  divide by focusing on digital  skills 
throughout the education and training system and can be expected to make it more resilient and 
better able to cope with disruptions. The reform measures also have the potential to ensure that 
learners,  at  all  levels,  develop  foundational  skills  to  enable  them  to  take  part  in  the  digital 
economy.  The  programme  to  provide  digital  infrastructure  and  funding  to  schools  aims  at 
equipping  learners  with  digital  skills  and  is  expected  to  help  address  the  digital  divide  by 
ensuring  that  all  learners  have  equal  access  to  appropriate  digital  infrastructure.  Moreover,  the 
measure to support the digitalisation of companies in Ireland aims at supporting the development 
of essential digital skills among the business community. 

Several  investments  are  expected  to  contribute  to  the  front-loading  of  mature  public 
investment  projects  (CSR  2020.3.2),  the  promotion  of  private  investment  (CSR  2020.3.3), 
and the use of more direct funding instruments to stimulate research and innovation (CSRs 
2019.3.6 and 2020.3.7). The restart of the economy requires ambitious environmental, climate, 
energy and infrastructure investments. Some investments in the plan contribute to the completion 
of  mature  public  investment  projects.  In  particular,  private  investments  may  be  front-loaded 
through  the  residential  retrofit  loan  scheme,  which  aim  to  grant  cheaper  loans  to  private 
homeowners and non-corporate landlords to retrofit residential buildings. The retrofit pathfinder 
project  aims  to  front-load  public  investment  through  the  deep  retrofit  of  selected  public 
buildings.  Private  investment  is  expected  to  be  promoted  through  the  fund  for  the 
decarbonisation of the enterprise sector and the fund to drive digital transformation of businesses 
with a particular focus on SMEs. Research and innovation is expected to receive direct funding 
through  the  national  grand  challenge  programme,  which  deploys  a  challenge-based  funding 

37 

 
 
model  to  support  research  and  innovation  projects  and  incentivises  researchers  to  focus  on 
projects  that  have  the  potential  to  contribute  to  the  climate,  healthcare,  digital  and  agriculture 
sectors, whilst also delivering tangible impact  for society. The plan is also expected to support 
the  digital  transformation  of  SMEs  and  includes  the  establishment  of  four  European  digital 
innovation  hubs.  During  the  implementation  of  the  plan,  sectoral  support  for  the  design, 
implementation  and  evaluation  of  research  and  innovation  policy  reforms  will  be  available  via 
the Horizon Policy Support Facility. 

Investments  under  the  third  component  of  the  plan  focus  on  supporting  employment 
through active integration support and upskilling (CSRs 2019.2.1 and 2020.2.1). Ireland has 
a relatively high share of households with low work intensity and faces skill shortages in several 
sectors. As part of the plan, the work placement experience programme aims to keep people who 
have  been  unemployed  for  six  months  or  more  close  to  the  labour  market,  by  providing  them 
with  work  experience  and  training  to  increase  their  employability.  The  SOLAS  recovery  skills 
response  programme  seeks  to  equip  workers  with  the  skills  to  shift  into  growth  sectors  of  the 
economy,  with  a  focus,  among  others,  on  skills  for  green  construction,  climate  change 
mitigation,  IT,  healthcare  and  logistics,  which  has  the  potential  to  help  address  skill  shortages 
that  persist  in,  among  other  fields,  construction,  IT,  healthcare,  and  transport.  These 
opportunities could help workers keep up with the changing requirements of a more green and 
digitalised labour market. The investments and reform measures to address the digital divide and 
enhance  digital  skills  are  expected  to  further  support  these  efforts  by  helping  strengthen  basic 
digital  skills  needed  to  engage  in  the  digital  economy.  Outside  the  plan,  these  investments  are 
complemented  on  a  national  level  by  the  training  support  grant  for  short-term  skills,  which  is 
expected  to  allow  individuals  to  pursue  short-term  specific  training,  and  the  SOLAS  skills  to 
advance  programme,  which  is  targeted  at  vulnerable  groups  in  the  Irish  workforce  with  lower 
skills levels. 

The  plan  includes  measures  that  seek  to  reduce  regulatory  barriers  to  entrepreneurship 
(CSR  2019.3.7).  Regulatory  barriers  to  entrepreneurship  negatively  affect  firm  entry  and  exit 
and thereby the productivity of indigenous Irish firms. The planned SME test – four steps policy 
makers  should  follow  to  ensure  they  consider  the  possible  effects  of  legislative  proposals  on 
SMEs – aims to remove any unnecessary regulatory obstacles SMEs face when establishing and 
growing their business. A consistent uptake of the SME test across Government departments is 
expected  to  help  reduce  the  regulatory  burden  on  SMEs.  The  plan  also  refers  to  initial  steps 
towards a single SME portal currently being considered, which would aim to provide access to 
assistance  and  support  to  reduce  the  administrative  burden  on  SMEs.  Outside  the  plan,  these 
reforms and investments are complemented on a national level through the introduction of online 
retail  and  online  trading  voucher  schemes,  which  are  designed  to  support  small  businesses  to 
develop their online presence. 

The  plan  is  expected  to  partially  address  challenges  to  the  effective  supervision  and 
enforcement of the anti-money laundering framework as regards trust or company service 

38 

 
 
providers  (CSR  2020.4.3).  Ireland  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  publication  of  a  sectoral  risk  assessment  of  trust  or 
company  service  providers  may  improve  the  understanding  of  the  risk  exposure  of  these 
professionals.  Supervision  is  expected  to  be  intensified  through  the  recruitment  of  additional 
specialist  staff  to  assist  with  the  supervision  and  management  of  trust  or  company  service 
providers  in  2021  and  an  increased  number  of  inspections.  In  addition,  new  legislation 
operationalising  any  recommendations  from  a  working  group  is  expected  to  lead  to  better 
enforcement, by expanding the regulatory toolkit to include an administrative financial sanctions 
regime. At the same time, the plan does not include actions to bring about effective risk-based 
supervision  by  self-regulatory  bodies.  Outside  the  plan,  these  reforms  are  complemented  on  a 
national level through the introduction of a central register of beneficial ownership of collective 
asset-management  vehicles,  credit  unions  and  unit  trusts,  which  is  expected  to  help  ensure 
transparency of investment vehicles.  

Reforms  in  the  plan  are  expected  to  partially  address  features  of  the  tax  system  that 
facilitate  aggressive  tax  planning  (CSRs  2019.1.3  and  2020.4.2).  A  limited  application  of 
withholding  tax  on  outbound  payments  of  interest,  royalties,  and  dividends  may  lead  to  those 
payments  being taxed at a very low rate or escaping tax altogether, if they  are  channelled to  a 
low  or  no  tax  jurisdiction.  In  this  respect,  the  commitment  to  future  measures,  including 
withholding  taxes  or,  where  relevant,  non-deductibility,  applying  to  outbound  payments  to  EU 
blacklisted and all other zero-tax and no-tax jurisdictions is  expected to  limit  the possibility of 
outbound payments not being taxed. At the same time, the extent of the reform (such as the level 
of a potential withholding tax) remains unclear and outbound payments to low tax jurisdictions 
are  not  addressed  in  the  plan.  The  plan  also  includes  several  other  measures  relevant  to 
aggressive tax planning, including enhanced controlled foreign company rules and completion of 
corporate tax residency reform. The plan finally includes an amendment of capital allowances on 
intangible  assets.  The  effectiveness  of  this  measure  is  however  mitigated  by  indefinite 
grandfathering  provisions,  which  ensure  that  existing  structures  will  be  unaffected  by  the 
legislative change. 

The plan is expected to contribute to implementing pension reform plans (CSR 2019.1.4). 
The overall deficit of the pension system is expected to grow significantly in the long term and 
add risks to the sustainability of public finances. The proposed measures aim to contribute to the 
simplification and harmonisation of the pension landscape, and assisting in harmonising the tax 
treatment of contributions and helping simplify the drawdown process. These reforms would be a 
good step towards the full implementation of the pension reforms plans, as they are a part of the 
national  roadmap  for  pensions  reform  for  the  years  2018  to  2023.  Outside  the  plan,  further 
actions in the roadmap for pensions reform include a new automatic-enrolment system, which is 
expected to address Ireland’s low level of supplementary pension coverage, and a report from a 

39 

 
 
commission on pensions to examine the sustainability of the state pension system, including the 
potential increase of the state pension qualifying age. 

The  plan  includes  measures  that  aim  to  increase  the  provision  of  social  and  affordable 
housing (CSRs 2019.3.5 and 2020.2.3). Shortages in social housing supply remain a significant 
challenge with regard to fostering inclusion. The Land Development Agency Bill in component 3 
should  confer  functions  on  the  existing  Land  Development  Agency  (LDA)  to  develop  and 
regenerate relevant public land for the delivery of housing and to develop and manage housing, 
including a quota of social housing. Furthermore in component 3, the Affordable Housing Act is 
expected  to  launch  the  affordable  purchase  scheme  for  homes  on  public  land,  the  affordable 
purchase  shared  equity  scheme  and  the  cost  rental  scheme.  These  schemes  can  be  expected  to 
increase  housing  affordability  to  low  and  medium  income  households,  which  is  a  particular 
challenge  for  Ireland.  However,  as  housing  affordability  in  Ireland  is  mostly  caused  by  supply 
constraints,  the  Economic  and  Social  Research  Institute  has  noted  that  the  affordable  purchase 
shared equity could cause additional inflation. Effectively targeting the scheme to lower-income 
categories  might  increase  its  effectiveness  while  reducing  the  risks  of  creating  inflationary 
pressures.  The  investments  associated  to  these  reforms  will  themselves  not  consume  any  RRF 
funding  and  are  to  be  financed  by  the  Irish  Government,  with  the  exception  of  selected  cost 
rental scheme projects,  which are expected to be complemented by European Investment Bank 
funding.  Outside  the  plan,  a  substantial  national  budget  of  EUR 3.3 billion  of  Irish  Exchequer 
funding will be dedicated to housing measures in 2021. This is expected to be complemented by 
numerous measures, including an upcoming national housing strategy with annual targets on the 
delivery  of  social  homes,  energy  improvements  of  the  social  housing  stock  and  a  better 
enforcement of the vacant site levy. 

Several measures aim at improving the cost-effectiveness, accessibility, and resilience of the 
healthcare  system  (CSRs  2019.1.4  and  2020.1.2).  The  Irish  healthcare  system  is  relatively 
expensive  compared  to  the  rest  of  the  EU:  the  high  proportion  of  non-government  health 
spending contributes to driving up costs and inequity. The suite of eHealth investments presented 
in the plan is expected to increase the cost-effectiveness of the healthcare system by improving 
the  efficiency  of  financial  and  procurement  processes.  These  investments  are  also  expected  to 
indirectly improve accessibility to care services, by delivering ICT infrastructure to community 
health  locations  and  allowing  data  to  ‘follow  the  patient’.  Cost-effectiveness  may  also  be 
improved  through  the  implementation  of  the  Sláintecare  consultant  contract,  which  has  the 
potential  to  ensure  a  more  efficient  and  equitable  use  of  resources  in  the  public  system.  The 
development of community healthcare networks has the potential to further improve accessibility 
and respond to the needs of health workforce, by building capacity to deliver care in community 
settings. Lastly, the chronic disease management programme is expected to improve the quality, 
accessibility and efficiency of chronic disease care and management. This measure also has the 
potential  to  strengthen  the  resilience  of  the  healthcare  system  by  lowering  the  incidence  of 
avoidable  hospital  admissions.  These  reforms  would  be  a  welcome  step  towards  the 

40 

 
 
implementation  of  Sláintecare,  Ireland’s  long-term  health  system  strategy.  Among  other 
objectives, Sláintecare aims to achieve a modern universal single-tier healthcare system, where 
residents have equal access to care services irrespective of their ability to pay. 

The  plan  does  not  contain  specific  measures  to  broaden  the  tax  base,  although  the  issue 
could be addressed by measures outside the plan (CSRs 2019.1.2 and 2020.4.1).  Excessive 
reliance  on  highly  concentrated  corporate  taxes  carries  risks  for  the  financing  of  permanent 
current  expenditure.  While  the  plan  refers  to  a  proposed  trajectory  of  annual  increases  in  the 
carbon tax rate as a base broadening measure, the Commission would not consider this measure 
as broadening the tax base, as it intervenes on the rate only and not  the base. Nonetheless,  the 
measure  is  expected  to  have  a  welcome  environmental  impact,  by  reducing  carbon  emissions. 
Outside  the  plan,  in  June  2021,  the  Irish  Government  enacted  changes  to  local  property  tax, 
which brought properties built since 2013 into the charge and provided that property valuations 
will  be  reviewed  every  four  years.  Extending  the  scope  of  properties  covered  by  the  local 
property tax is expected to broaden the tax base. 

Access to affordable and quality childcare (CSRs 2019.2.2) has been addressed by a variety 
of actions undertaken by the government outside the plan. Investing in access to quality and 
affordable  childcare  is  necessary  to  support  women’s  labour  market  participation.  Reform 
initiatives  committed  to  in  the  first  5  strategy  are  being  gradually  implemented.  These  include 
the rollout of the national childcare scheme, the workforce development plan, the development 
of the new funding model, and the review of the operating system. Annual investment in early 
learning and childcare has increased by 141% since 2015, in part also due to increased demand. 
Investing  in  access  to  quality  and  affordable  childcare  and  rolling  out  the  national  childcare 
scheme are expected to help increase the relatively low female employment rate. 

By  contributing  to  addressing  these  challenges  identified  in  the  European  Semester,  the 
plan  is  expected  to  boost  the  growth  potential  of  the  Irish  economy  in  a  sustainable 
manner.  In particular, the aims of the plan are in line with the flagship  areas identified by the 
2021 annual sustainable growth survey for their potential to create jobs and growth and help reap 
the  benefits  from  the  green  and  digital  transitions.  Through  forward-looking  investments  to 
facilitate  the  green  and  digital  transitions,  investments  in  skills,  and  the  implementation  of 
structural reforms, the plan can be expected to sustainably boost growth potential.  

The measures in the plan also represent an adequate response to the general economic and 
social  challenges  in  Ireland  (see  Sections  2.1  and  2.2).  Despite  positive  growth  during  the 
pandemic  year, the domestic  Irish economy took  a hit.  Investment  contracted substantially and 
actual (COVID-adjusted) unemployment has risen sharply. While progress in vaccination efforts 
leads  to  a  pick-up  of  growth  globally  and  in  Ireland  and  recessionary  trends  are  reversing,  the 
plan  provides  an  opportunity  to  boost  sustainable  and  long-term  growth.  The  plan  includes 
several  measures  that  have  the  potential  to  help  improve  employment  and  the  productivity  of 
domestic firms, and address skill shortages in specific sectors or regions. With respect to social 

41 

 
 
challenges,  the  plan  includes  measures  that  could  help  those  far  away  from  the  labour  market 
through activation support and that may help address shortages in social and affordable housing. 

The modest size of the plan implies that the potential to directly address the vulnerabilities 
in the context of the macroeconomic imbalance procedure is very limited. Ireland has been 
identified as a country with vulnerabilities stemming from large private and public debts and net 
external  liabilities.  While  the  direct  impact  of  the  plan  on  these  vulnerabilities  might  be  very 
limited, the plan may indirectly help lessen riskiness of the private debt and external debt to the 
degree  it  improves  productivity,  employment  and  competitiveness.  Similarly,  the  planned 
reforms  are  expected  to  strengthen  the  business  environment,  as  well  as  the  efficiency  of  the 
public sector, thereby further reducing these vulnerabilities and the associated risks.  

Conclusion of the assessment under criterion 2.2 in Annex V to the RRF Regulation 

Taking  into  consideration  the  reforms  and  investments  envisaged  by  Ireland,  its  recovery  and 
resilience  plan  is  expected  to  contribute  to  effectively  addressing  all  or  a  significant  subset  of 
challenges  identified  in  the  country-specific  recommendations,  or  challenges  in  other  relevant 
documents officially adopted by the Commission under the European Semester, and the recovery 
and  resilience  plan  represents  an  adequate  response  to  the  economic  and  social  situation  of 
Ireland. This would warrant a rating of A under the assessment criterion 2.2 in Annex V to the 
RRF Regulation. 

42 

 
 
Table 7: Mapping of country challenges identified in 2019-20 country-specific recommendations and the Irish 
recovery and resilience plan components  

y
r
e
v
o
c
e
r

c
i
m
o
n
o
c
e
d
n
a
l
a
i
c
o
S
-
3
t
n
e
n
o
p
m
o
C

n
o
i
t
a
e
r
c
b
o
j
d
n
a

○ 

● 

● 

● 
○ 

○ 
● 
● 

● 

Country challenges 
(as identified in Section 2) 

Associated CSR 
(2019-2020) and 
European Semester 
recommendations 

Address investment needs related to sustainable transport 

2019.3.2, 2020.3.5 

Address investment needs related to water  

Address the risk of digital divide, including in the 
education sector  
Focus investment on digital infrastructure 

Front-load mature public investment projects 

Promote private investment 

Provide personalised active integration support and 
facilitate upskilling 
Support employment through developing skills 

2019.3.3, 2020.3.6 

2020.2.2 

2019.3.4, 2020.3.8 

2020.3.2 

2020.3.3 

2019.2.1 

2020.2.1 

n
e
e
r
g
e
h
t

g
n
i
c
n
a
v
d
A

-
1
t
n
e
n
o
p
m
o
C

n
o
i
t
i
s
n
a
r
t

● 
● 

● 
● 

Use more direct funding instruments to stimulate research 
and innovation (R&I)  
Reduce regulatory barriers to entrepreneurship 

Effective supervision and enforcement of the anti-money 
laundering framework 
Curbing aggressive tax planning 

2019.3.6, 2020.3.7 

○ 

2019.3.7 

2020.4.3 

2019.1.3, 2020.4.2 

Increase the provision of affordable and social housing 

2019.3.5, 2020.2.3 

g
n
i
d
n
a
p
x
e
d
n
a
g
n
i
t
a
r
e
l
e
c
c
A

-
2
t
n
e
n
o
p
m
o
C

n
o
i
t
a
m
r
o
f
s
n
a
r
t
d
n
a
s

m
r
o
f
e
r

l
a
t
i
g
i
d

● 

● 
● 
○ 
● 

● 
○ 

Ensure the long-term fiscal sustainability of the pension 
system  
Improve the cost-effectiveness, accessibility, and resilience 
of the healthcare system 
Broaden the tax base 

2019.1.4 

2019.1.4, 2020.1.2 

● 

2019.1.2, 2020.4.1 

Key: “●” investments and reforms of the component significantly address the challenge; “○” the component 
partially addresses the challenge.  

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence 

Fostering economic growth and jobs  

The  plan  is  designed  to  support  economic  growth  and  job  creation  through  investments 
and reforms. It is also in line with the 2020 new industrial strategy21. Given the size of the RRF 
financial contribution, at below EUR 1 billion or 0.3% of Ireland’s 2019 GDP, the direct impact 
from a macroeconomic perspective is expected to be small. Hence, the plan assesses the impact 
on growth and employment in the medium term (5 years), and not in the short (2 years) and long 
(20 years) term. The COSMO model used by the Irish authorities estimates that the level of GDP 
is set to be 0.1 percent above the baseline and increase employment by 0.15 percent above the 
baseline over 2021-2026. The QUEST model used by the Commission provides higher estimates 
for the impact of NextGenerationEU (NGEU) on GDP and employment, but most of this impact 
comes from spill-over effects (see the Box 2). 

Investments and policies to improve energy efficiency are expected to contribute to creating 
jobs  and  to  the  green  transition.  These  investments  encompass  renovation  works  which  are 
particularly  labour  intensive,  decarbonisation  of  Irish  enterprises,  sustainable  transport  (with  a 
large  share  of  funding  dedicated  to  rail)  as  well  as  peatland  rehabilitation.  In  addition  to 
contributing  to  job  creation  and  economic  growth,  these  investments  are  set  to  help  achieve 
climate goals. This is expected to create jobs, while investments in sustainable rail transport may 
help  indirectly  increase  labour  force  participation  and  productivity  by  reducing  travel  times. 
Meanwhile, reforming environmental taxation is expected to raise revenues that can be used to 
create new jobs and reduce the carbon footprint. 

Investments  and  policies  to  accelerate  digitalisation  are  expected  to  improve  productivity 
over different horizons, as well as create jobs. Investments are envisaged in the digitalisation 
of  public  service,  schools  and  Irish  enterprises,  contributing  to  reducing  the  digital  divide, 
addressing  skill  shortages  and  reducing  youth  unemployment.  Such  investments  in  the  public 
sector  may  help  achieve  higher  efficiency  of  the  public  sector  and  ease  interactions  with  the 
private  sector.  Investments  in  schools  target  skills  and  digital  competences  that  could  improve 
productivity  in  medium  and  long  term.  Investments  in  business  digitalisation  aim  at  building 
awareness, diffusion of technologies and use of AI to enhance productivity. Finally, investments 
in eHealth have the potential to achieve higher productivity and cost-efficiency in the healthcare 
sector.  These  investments  are  expected  to  be  accompanied  by  reform  measures  to  address  the 
digital divide and help the economy transition to digital work and business activity. 

21 European Commission, Updating the 2020 New Industrial Strategy, COM(2021) 350 final, 05.05.2021. 

44 

 
 
                                                           
Investments  and  reforms  in  the  social,  education  and  business  fields  are  expected  to 
encourage  job  growth  and  increase  productivity.  Some measures  in  the plan are directed at 
developing skills to help participants in these projects find employment, as well as to ensure an 
adequate  pool  of  labour  is  available  to  facilitate  the  green  and  digital  transitions.  Such  skill 
enhancing  measures  are  expected  to  help  workers  to  adjust  to  post-crisis  structures,  thereby 
contributing  to  growth.  The  reforms  relating  to  affordable  housing  aim  at  addressing  housing 
needs  in  the  medium  term  and,  if  they  do  not  lead  to  additional  inflationary  pressures,  should 
improve Ireland’s capacity to increase labour supply. Measures in the health sector are expected 
to  help  ensure  the  accessibility  of  healthcare  services,  including  for  workers  and  their 
dependents. A dedicated reform aims to remove unnecessary regulatory obstacles for businesses 
and sustain SME growth and employment.  

Box 2: Stylised NGEU impact simulations with QUEST - Ireland 

Model simulations conducted by the Commission using the QUEST model show that the economic impact of 
the NextGenerationEU (NGEU) in Ireland could lead to an increase of GDP of between 0.3% and 0.5% by 
202622. Spillovers account for a large part of such impact.  

According to these simulations, this would translate into up to 6 200 additional jobs. Cross border (GDP) spillovers 
account  for  0.4  percentage  points  in  2026,  showing  the  value  added  of  synchronised  expenditure  across  Member 
States  (line  2).  Even  in  a  scenario  with  a  lower  productivity  of  NGEU  funds,  it  would  still  lead  to  a  significant 
impact (line 3)23. 
Table  8:  QUEST  simulation  results  (%-deviation  of  real  GDP  level  from  non-NGEU  case,  linear 
disbursement assumption over 6 years) 

Scenario 

Baseline 

 of which spillover 

Low productivity 

2021  2022  2023  2024  2025  2026  2027  2028  2029  2030  2040 

0.6 

0.6 

0.2 

0.6 

0.5 

0.2 

0.5 

0.5 

0.2 

0.5 

0.5 

0.3 

0.5 

0.4 

0.3 

0.5 

0.4 

0.3 

0.4 

0.3 

0.3 

0.3 

0.2 

0.2 

0.2 

0.1 

0.1 

0.1 

0.1 

0.1 

0.0 

0.0 

0.0 

This  stylised  scenario  does  not  include  the  possible  positive  impact  of  structural  reforms,  which  can  be 
substantial. A model-based benchmarking exercise shows that undertaking structural  reforms that would result in 
halving  the  gap  vis-à-vis  best  performers  in  terms  of  indicators  of  structural  reforms  could  raise  Ireland  GDP  by 
11% in 20 years’ time, in line with findings for the EU average24. 

Due  to  the  differences  in  the  assumptions  and  methodology,  the  results  of  this  stylised  assessment 
cannot  be  directly  compared  to  the  numbers  reported  in  chapter  4  of  Ireland’s  recovery  and 
resilience plan.  

22 RRF  amounts  to  roughly  90%  of  NGEU,  which  also  includes  ReactEU,  Horizon,  InvestEU,  JTF,  Rural  Development  and 
RescEU. 
23 Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 
24 Varga,  J,  in  't  Veld  J.  (2014),  ‘The  potential  growth  impact  of  structural  reforms  in  the  EU:  a  benchmarking  exercise’, 
European 
541. 
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf.  

Economic 

Economy 

Papers 

no. 

45 

 
 
 
                                                           
Investments  in  the  plan  financed  through  the  RRF  are  expected  to  be  growth-enhancing 
expenditure  additional  to  the  baseline  without  the  RRF. According to the data presented in 
the plan, the baseline of growth-enhancing public expenditures not financed by the RRF over the 
period  of  2021-2026  is  slightly  above  the  average  level  in  the  three-year  period  before  the 
pandemic (2017-2019). The projected RRF-financed growth-enhancing expenditure is estimated 
at 0.1% of GDP in 2021-2026. The plan is expected to contribute to the government’s capacity to 
support  the  economy,  although  public  investment  has  been  picking  up  after  a  long  period  of 
subdued investment. Public investment in 2017-2019 was at 2.0% of GDP, well below the EU 
average  of  2.9%  of  GDP,  but  above  the  average  when  taking  public  investment  as  a  share  of 
GNI* into account (3.3%).  

Strengthening social cohesion  

The plan contains a range of measures that are expected to strengthen social cohesion by 
supporting  employment  prospects,  particularly  through  creating  work  placement 
opportunities,  training  and  educational  programmes.  The  plan  includes  measures  with  a 
particular  focus  on  digital  infrastructure  in  schools,  as  well  as  education  and  training  in 
technological  universities  that  is  attuned  to  regional  needs.  The  plan  also  includes  the  work 
placement experience programme (WPEP), which provides active integration support to people 
who  have  been  unemployed  for  six  months  or  more.  The  SOLAS  recovery  skills  response 
programme  aims  to  equip  participants  with  those  skills  most  needed  in  growth  sectors,  in 
particular  green  and  digital  skills.  Both  the  WPEP  and  SOLAS  recovery  skills  response 
programme  can  be  expected  to  contribute  to  cohesion  and  social  convergence,  as  they  provide 
support  to  those  who  are  in  a  disadvantaged  labour  market  position.  Finally,  the  technological 
universities  transformation fund has the potential to  strengthen the provision  of quality tertiary 
education and reduce territorial disparities. The proposed reforms are in line with the European 
Pillar of Social Rights relating to active support to employment. They can be expected to provide 
personalised training and re-qualification. 

A set of reforms has the potential to contribute to addressing the high need for social and 
affordable  housing.  Shortages  in  social  housing  supply  can  be  a  significant  challenge  to 
fostering inclusion, including for the most vulnerable, and reducing risks of poverty and social 
exclusion.  The  Land  Development  Agency  Bill  is  expected  to  contribute  to  the  delivery  of 
additional  housing  supply  by  conferring  new  functions  on  the  existing  agency  to  develop  and 
regenerate relevant public land for the delivery of housing and to develop and manage housing. 
In addition, the Bill requires that a large proportion of any housing provided on relevant public 
land  be  made  available  for  affordable  housing  and  contains  an  additional  quota  for  social 
housing.  The  Affordable  Housing  Act  is  expected  to  launch  three  different  schemes,  covering 
both  rental  and  purchase,  which  can  be  expected  to  increase  housing  affordability  to  low  and 
medium income households. The proposed reforms are in line with the European Pillar of Social 
Rights relating to housing and assistance for the homeless, as they can be expected to increase 
access  to  social  housing  or  housing  assistance  of  good  quality  to  those  in  need,  although 

46 

 
 
expected  future  needs  for  social  housing  in  Ireland  are  likely  to  be  higher  than  the  number  of 
units currently planned to be created.  

Several measures have the potential to help ensure timely access to affordable healthcare of 
good  quality.  eHealth  investments  in  the  plan  have  the  potential  to  improve  accessibility  by 
supporting ICT infrastructure in the community healthcare sector. In addition, they may improve 
cost-effectiveness  through  the  implementation  of  a  single  national  finance  and  procurement 
system for the entire health sector. With respect to reforms, the implementation of the Sláintecare 
consultant contract, operationalisation of community health networks and implementation of the 
chronic  disease  management  programme  are  expected  to  help  achieve  the  objective  of  the 
European Pillar of Social Rights relating to access to affordable, preventive and curative health 
care  of  good  quality.  The  health-related  reforms  are  all  actions  in  support  of  Sláintecare’s 
overarching goal to deliver a universal, single-tier healthcare where patients are treated in public 
hospitals solely on the basis of clinical needs rather than ability to pay. 

Reducing vulnerability and increasing resilience  

The plan is expected to reduce vulnerabilities and increase economic resilience.  Ireland has 
been  identified  among  the  countries  experiencing  imbalances.  The  country’s  vulnerabilities 
relate to large private and government debts and net external liabilities. Reforms and investments 
included in the plan can be expected to increase employment and productivity, hence lessening 
the  burden  of  private  debt  and  increasing  the  resilience  against  external  shocks.  However,  the 
plan’s  direct  impact  may  be  limited  due  to  the  modest  size  of  the  financial  contribution. 
Economic  resilience  is  also  expected  to  be  strengthened  by  the  green  and  digital  investments, 
which  have  the  potential  to  support  Irish  companies,  and  SMEs  in  particular.  Reforms  in  the 
public sector may aid institutional resilience. 

The  plan  includes  a  range  of  measures  that  may  strengthen  the  capacity  of  the  economic 
and  social  structures  and  institutions  to  adjust  to  and  withstand  shocks.  Such  measures 
include actions to increase the resilience of public administration, strengthen the health system, 
improve  the  adaptability  of  education,  and  strengthen  social  resilience  by  addressing  housing 
needs.  

Public  administration  is  expected  to  be  made  more  resilient  by  several  measures  in  the 
plan.  In  addition,  the  plan  may  also  help  Ireland  better  address  risks  related  to  its  anti-money 
laundering framework due to its internationally oriented economy. The plan has the potential to 
strengthen anti-money laundering supervision and enforcement, with a reinforcement of capacity 
and resources of supervisors – supported by the publication of a sectoral risk assessment of trust 
or company service providers – and steps towards sanctioning powers.  

A  set  of  reforms  and  investments  included  in  the  plan  are  expected  to  reinforce  the 
robustness  and  resilience  of  health  services.  Digitalisation of the healthcare system,  through 
eHealth investments such as the deployment of an ePharmacy system and an integrated financial 

47 

 
 
management  system,  can  be  expected  to  improve  resilience  by  standardising,  integrating  and 
improving the effectiveness of processes. By delivering care within the community, the proposed 
reforms  aiming  to  expand  the  chronic  disease  management  programme  and  operationalise 
community healthcare networks may increase resilience by helping avoid hospital admission as 
much  as  possible.  In  addition,  the  introduction  of  the  ‘public  only’  Sláintecare  consultant 
contract  has  the  potential  to  address  the  current  number  of  temporary  and  unfilled  consultant 
posts,  as  well  as  improve  the  cost-effectiveness  of  the  healthcare  system  by  ensuring  that  all 
capacity currently available in the public system is used for public healthcare activity only.  

The  plan  has  the  potential  to  improve  the  adaptability  of  education  to  new  needs.  The 
technological  universities  transformation  fund  has  the  potential  to  improve  the  adaptability  of 
higher education to regional needs, by building capacity in training and education at regionally-
embedded technological universities.  

Finally,  reforms  aiming  to  address  housing  affordability  needs  may  strengthen  social 
resilience.  If  left  unaddressed,  constraints  limiting  the  supply  of  housing  could  contribute  to 
affordability concerns, which could, in the long term, act as a constraint on the labour force and 
barrier to investment. Improving the development of public land for the delivery of housing and 
increasing housing affordability for low and medium income households would be expected to 
improve Ireland’s capacity to attract new businesses and to increase labour supply. 

Cohesion and convergence  

The  productivity  enhancing  measures  in  the  plan  have  the  potential  to  advance 
convergence between domestic and foreign firms, as well as between sectors. To tackle the 
unbalanced  digitalisation  among  companies,  the  plan  includes  the  programme  to  drive  digital 
transformation of companies, particularly SMEs, across all sectors in Ireland. This measure aims 
to  advance  innovation,  expand  market  presence,  boost  productivity  and  ultimately  increase 
competitiveness. Support is envisaged in a tailored way such as, by developing online presence, 
digitalising  products  and  business  processes,  and  using  digital  technologies  to  develop  new 
markets  and  business  models.  Regulatory  barriers  to  entrepreneurship,  which  negatively  affect 
firm  entry  and  exit  and  thereby  the  productivity  of  indigenous  Irish  firms,  are  expected  to  be 
lowered by increasingly applying the SME test. Access to the labour market and productivity of 
the  workforce  are  expected  to  be  improved  by  the  activation  support  and  upskilling  measures 
included  in  the  plan,  especially  in  economic  sectors  most  relevant  for  the  green  and  digital 
transitions. 

The  plan  includes  measures  that  are  expected  to  reduce  disparities  between  different 
territories.  Investments  in  five  regionally-based  technological  universities  are  expected  to 
contribute  to  tackling  persistent  regional  economic  disparities  by  supporting  training  and 
education,  building  on  local  strengths  through  strong  links  with  stakeholders  in  the  region. 
Reducing  local  bottlenecks  in  public  transport  in  the  Cork  area  is  expected  to  have  a  positive 
impact  for the whole transport network.  Investments  in  regional  commuter rail are expected to 

48 

 
 
help facilitate local firms in attracting talent. The rehabilitation of 33 000 hectares of peatlands is 
expected to help mitigate the negative impact of the exit from peat for electricity generation in 
the  Midlands  region.  In  addition,  the  plan  also  aims  at  reducing  disparities  by  enhancing 
connectivity  of  a  number  of  schools,  many  of  which  are  in  rural  areas,  and  by  supporting  the 
digital transformation of enterprise in Ireland. 

Some measures in the area of healthcare are also expected to contribute to alleviating social 
and territorial disparities.  In particular, expanding the provision of public health services and 
creating healthcare networks based on the needs  of local  populations  is  expected to  effectively 
respond  to  this  challenge.  As  a  whole,  the  health-related  measures  in  the  plan  also  contribute 
toward  making  progress  on  the  implementation  of  the  Sláintecare  reform  programme  with  the 
aim  of  achieving  a  universal  single-tier  healthcare  system  where  everyone  has  equal  access  to 
services irrespective of their ability to pay. 

The  plan  also  includes  a  set  of  measures  that  are  aimed  at  addressing  risks  of  a  digital 
divide, including in the education sector. The programme to provide digital infrastructure and 
funding to schools aims at equipping learners with digital skills and is expected to help address 
the  digital  divide  by  ensuring  that  all  learners  have  equal  access  to  appropriate  digital 
infrastructure.  Many  of  the  schools  to  which  this  plan  aims  to  bring  connectivity  are  in  rural 
areas.  The reform  measures may address  the risk of digital  divide by focusing on digital  skills 
throughout the education system and can be expected to make it more resilient and better able to 
cope with disruptions. The reform measures also have the potential to ensure that learners, at all 
levels, develop foundational skills to enable them to take part in the digital economy. Moreover, 
the  measure  to  support  the  digitalisation  of  companies  in  Ireland  aims  at  supporting  the 
development of essential digital skills among the business community. 

Conclusion of the assessment under criterion 2.3 in Annex V to the RRF Regulation 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Ireland,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation, and economic, social and institutional resilience of the Member State, on contributing 
to the implementation of the European Pillar of Social Rights, including through the promotion 
of  policies  for  children  and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the 
COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial  cohesion  and 
convergence within the Union. This would warrant a rating of A under the assessment criterion 
2.3 of Annex V to the RRF Regulation. 

49 

 
 
Box 3: Employment and social challenges in light of the Social Scoreboard accompanying the European 
Pillar of Social Rights 

Ireland  performs  relatively  well  on  a  number  of  indicators  of  the  Social  Scoreboard  supporting  the 
European Pillar of Social Rights, while challenges remain. The COVID-19 crisis has halted the positive labour 
market developments observed in the past years and risks leading to an increase in the share of people at risk of 
poverty or social exclusion. While extended income subsidy schemes have contributed to cushioning the economic 
impact  of  the  pandemic  so  far,  the  employment  rate  decreased  to  73.4%  (-1.7  percentage  points)  and 
unemployment increased to 5.8% (+0.8 percentage points) in 2020. Ireland ranks better than average or among the 
best performers in terms of income quintile ratio, unemployment rate, early leavers from education and training, 
net  earnings  of  a  full-time  single  worker  earning  the  average  wage,  and  impact  of  social  transfers.  The  share  of 
people with basic digital skills in Ireland has increased over the past years, reaching 53% in 2019. However, this is 
still below the EU average (56%) and there is a risk of digital divide, in part due to a high number of households 
level  of 

the  high 

low  work 

with 
intensity  and 
digitalisation of the Irish economy and public sector. 

The  employment  and  social  situation  of  vulnerable 
groups remains a challenge and is likely to have been 
exacerbated by the crisis. The number of people not in 
education, employment or training (NEET) gives reason 
for  concern  (12%  in  2020,  almost  2  percentage  points 
increase year-on-year). While the share of people living 
in  low  work-intensity  households  has  been  decreasing 
since 2013, it still remains one of the highest in the EU 
(13.6%  vs  8.3%  in  2019  in  the  EU).  The  limited 
availability  of 
to  disadvantaged 
communities and the insufficient level of targeted active 
situation. 
labour  market  policies  aggravates 
Individualised support in the form of strengthened social 
services 
these  groups,  activation  policies  and 
increased  training  on  basic  skills  (including  digital) 
could  help  address  challenges.  Rent  increases  in  big 
cities  and  an  insufficient  provision  of  social  and 
affordable  housing  have  led  to  a  rising  number  of 
homeless people and call for adequate measures.  

services 

social 

the 

to 

There  is  scope  for  improved  coverage  of  early 
childhood  education  and  care  in  Ireland.  While  the 
provision  of  quality  and  affordable  childcare  has 
improved over the past years, Ireland is still well below 
the  EU  average  in  terms  of  the  proportion  of  children 
aged  3  or  less  attending  childcare  for  more  than  30 
hours  a  week.  This  continues  to  have  an  adverse  effect 
on  female  labour  market  participation.  The  gender 
employment  gap  (12.1%  in  2020)  is  still  above  the  EU 

average (11.3%).  

The plan submitted by Ireland addresses a number of employment and social policy challenges relevant for 
the  implementation  of  the  European  Pillar  of  Social  Rights. To foster equal opportunities and access to the 

50 

Critical situationTo watchWeak but improvingGood but to monitorOn averageBest performersSocial Scoreboard for IRELANDEqual opportunities and access to the labour marketEarly leavers from education and training (% of population aged 18-24) (2020)Youth NEET (% of total population aged 15-24) (2020)Gender employment gap (2020)Income quintile ratio (S80/S20) (2019)At risk of poverty or social exclusion (in %) (2019)Dynamic labour markets and fair working conditionsEmployment rate (% population aged 20-64) (2020)Unemployment rate (% population aged 15-74) (2020)Long term unemployment (% population aged 15-74) (2020)GDHI per capita growth (2019)Net earnings of a full-time single worker earning AW (2019)Update of 29 April 2021. Members States are classified on the Social Scoreboard according to a statistical methodology agreed with the EMCO and SPC Committees. It looks jointly at levels and changes of the indicators in comparison with the respective EU averages and classifies Member States in seven categories. For methodological details, please consult the Joint Employment Report 2021; NEET: neither in employment nor in education and training; GDHI: gross disposable household income.Social protection and inclusionImpact of social transfers (other than pensions) on poverty reduction (2019)Children aged less than 3 years in formal childcare (2019)Self-reported unmet need for medical care (2019)Individuals' level of digital skills (2019)Better than average 
 
 
 
 
labour market, the plan envisages re- and upskilling measures in the green and digital sectors for all that have lost 
their job due to the pandemic. A particular focus on those furthest away from the labour market is given through a 
work  placement  programme  that  supports  people  which  have  been  in  unemployment  for  more  than  6  months. 
Their  re-entering  the  labour  market  is  envisaged  by  acquiring  relevant  on-the-job  experience  with  a  view  to  an 
employment contract. The challenge of the digital divide is addressed by the recovery and resilience plan through 
a combination of infrastructure and skills-focused projects. The measures proposed include the provision of high-
speed  connectivity  for  primary  schools  and  digital  devices  and  software  for  disadvantaged  students  in  (post)-
primary  schools.  Further  measures,  as  outlined  in  the  reform  to  address  the  digital  divide,  are  laptops  for 
disadvantaged students in further and higher education and a 10-year adult literacy, numeracy and digital literacy 
strategy. While these measures go in the right direction, the focus on disadvantaged groups in the plan could be 
stronger.  The  high  need  for  affordable  and  social  housing  is  addressed  through  numerous  reforms  and 
investments,  which  are  outlined  in  the  recovery  and  resilience  plan  but  are  financed  through  other  sources. 
Affordable housing is well addressed by the plan, but measures on social housing could require further efforts to 
address the challenge given its size. 

4.4. The principle of ‘do no significant harm’  

The  RRF  Regulation  requires  that  no  measure  included  in  the  plan  leads  to  significant 
harm  to  any  of  the  six  environmental  objectives  within  the  meaning  of  Article  17  of  the 
Taxonomy Regulation25. ‘Do no significant harm’ (DNSH) compliance is a necessary condition 
for  the  Commission  to  positively  assess  the  plan.  Ireland  has  included  a  detailed  DNSH 
assessment for each measure included in its plan in accordance with the template provided by the 
Commission,  and  in  line  with  the  DNSH  technical  guidance.  The  Commission  has  assessed 
whether and how each measure in Ireland’s plan complies with DNSH on that basis. 

Ireland  satisfactorily  substantiated  compliance  as  part  of  the  DNSH  assessment.  By 
selecting measures that either contribute substantially to environmental objectives, such as those 
focussing  on  energy  efficiency,  or  have  no  or  an  insignificant  foreseeable  impact  on 
environmental  objectives  (such  as 
labour  market,  social  policy,  or  public 
administration), the measures included in the Irish plan can be considered DNSH compliant from 
the  outset.  Measures  are  designed  to  ensure  compliance  with  DNSH,  directly  or  by  requiring 
specific evidence and commitments through milestones and targets to substantiate that they will 
not lead to significant harm to environmental objectives. 

those  on 

Ireland  confirmed  compliance  with  the  DNSH  requirements  of  the  measures  related  to 
energy  efficiency  (measures  1.1,  1.3  and  3.8).  As  regards  non-hazardous  construction  and 
demolition  waste  generated  on  construction  sites,  and  the  limitation  of  waste  generation  in 

25 The  six  environmental  objectives  comprise  (1)  climate  change  mitigation,  (2)  climate  change  adaptation,  (3)  sustainable use 
and protection of water and marine resources, (4) the circular economy, (5) pollution prevention and control, and (6) protection 
and restoration of biodiversity and ecosystems. 

51 

 
 
 
                                                           
processes  related  to  construction  and  demolition,  Ireland  confirmed  that  building  designs  and 
construction techniques would support circularity and compliance with air quality standards.  

Regarding  the  decarbonisation  of  enterprises  (measure  1.2),  which  includes  potential 
support to the purchase of biomass boilers, Ireland gave assurance that biomass is expected 
to  meet  the  sustainability  and  greenhouse  gas  emission  savings.  In  the  national  grand 
challenge  programme,  Ireland  provided  a  detailed  DNSH  assessment  and  specified  that  brown 
research and innovation would be excluded from the awarded projects. 

Regarding the sustainable transport measure (1.4),  Ireland clarified that the construction 
of  double  rail  tracks  would  not  increase  greenhouse  gas  emissions.  In  the  short  term  this 
would be due to  the expected decrease in  road  congestion, and in  the medium term  due to  the 
entire  electrification  of  the  fleet.  The  implementation  of  the  Cork  metropolitan  area  transport 
strategy,  to  which  the  recovery  and  resilience  plan  is  envisaged  to  contribute  significantly,  is 
expected to reduce environmental emissions in the range of 2 to 5%. Ireland estimates that the 
full implementation of the strategy may lead to a reduction of 46 000 tonnes of CO2 equivalent 
per  year  in  vehicular  emissions.  Ireland  also  provided  specific  guarantees  for  a  number  of 
measures  in  other  components,  such  as  component  3  where  upskilling  and  reskilling 
opportunities  are  expected  to  be  subject  to  exclusion  lists  as  to  the  types  of  activities  being 
covered, in order to ensure the measures’ compliance with the DNSH principle.  

Conclusion of the assessment under criterion 2.4 in Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation of reforms and investments projects included in Ireland’s recovery and resilience 
plan  is  expected  to  do  a  significant  harm  to  environmental  objectives  within  the  meaning  of 
Article  17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant  harm’).  This 
would  warrant  a  rating  of  A  under  the  assessment  criterion  2.4  of  Annex  V  to  the  RRF 
Regulation. 

4.5. Green transition 

Climate target  

The  plan  follows  the  methodology  for  climate  tagging  set  out  in  Annex  VI  to  the  RRF 
Regulation  by  identifying  intervention  fields  and  corresponding  coefficients  for  the 
calculation  of  contribution  to  the  climate  change  objectives.  In  cases  where  the  selected 
intervention  field  includes  specific  conditions  to  justify  the  climate  contribution,  those  are 
explained  in  the  description  of  the  measure  and  reflected  in  milestones  and  targets,  where 
relevant. To ensure that the climate contribution of certain measures is not overestimated, Ireland 
split the measures into sub-measures to the extent possible, with a relevant intervention field for 
each sub-measure. 

52 

 
 
Overall,  based  on  the  methodology,  measures  supporting  climate  change  objectives  in 
Ireland’s recovery and resilience plan account for EUR 414 million, which represents 42% 
of the plan’s total allocation of EUR 989 million. This exceeds the minimum climate target of 
37% set out in the RRF Regulation. The climate change contribution of each of the components 
of Ireland’s recovery and resilience plan is set out in Table 9 below. 

Table 9: Climate contribution per component  

Component 

Cost 
(EUR million) 

Climate-
related  
(EUR million) 

Share dedicated to climate  

as % of the 
cost of the 
component 

as % of the 
non-repayable 
allocation 

1 Advancing the green transition 
2 Accelerating and expanding digital 
reforms and transformation 
3 Social and economic recovery and 
job creation 
Total 
Source: Irish recovery and resilience plan 

518.2  

291.0  

180.8 

989.9 

369.0  

15.6  

29.0  

413.6 

71.2% 

5.4% 

16.0% 

41.8% 

37.3% 

1.6% 

2.9% 

41.8% 

Note: the plan’s total allocation is EUR 988,966,534. This corresponds to the financial allocation after deduction of 
Ireland’s proportional share of the expenses of Article 6(2) of  Regulation (EU) 2021/241, calculated in accordance 
with the methodology of Article 11 of that Regulation. The amount of the estimated total costs of the recovery and 
resilience plan is higher than the plan’s total allocation. 

Green transition  

The Irish recovery and resilience plan allocates a significant set of reforms and investments 
to the objective of addressing the challenges  of the green  transition.  The proposed reforms 
and  investments  are  aligned  with  the  national  energy  and  climate  plan  and  are  expected  to 
contribute directly to the EU’s 2030 climate targets and 2050 climate neutrality. Measures in the 
plan are expected to contribute to meeting national and EU targets for environmental policy and 
biodiversity. 

Several  measures  in  component  1  are  dedicated  to  advancing  the  decarbonisation  of 
Ireland.  Retrofitting  of  the  residential  housing  stock  is  expected  to  be  promoted  by  offering 
loans  with  reduced  interest  rates  to  private  homeowners  and  corporate  landlords,  to  finance 
energy efficiency upgrades. Energy efficiency of public buildings is also supported through the 
‘public sector retrofit pathfinder project’. This measure has the potential to contribute to reduced 
energy consumption and greenhouse gas emissions thanks to the refurbishment of public office 
buildings,  including  the  Tom  Johnson  House  in  Dublin,  an  office  block  of  10  650  m².  Smart 
green data systems  are  also  promoted through the plan to  incentivise the installation of energy 
metering  and  monitoring  control  systems  to  speed  up  business’s  transition  to  a  low  carbon 
economy and assist with reducing greenhouse gas emissions. 

53 

 
 
Sustainable  transport  is  promoted  through  the  Cork  commuter  rail  investment. The Irish 
plan supports investments to improve rail infrastructure in the Cork area. Promoting sustainable 
mobility  alternatives  to  private  passenger  cars  and  the  uptake  of  public  transport  should 
contribute  to  lowering  greenhouse  gas  emissions.  This  measure  forms  part  of  the  Cork 
metropolitan  area  transport  strategy,  and  supports  future  electrification  of  rail  services  on  the 
Cork area commuter rail network.  

Biodiversity and ecosystems are supported in the plan through several investments, notably 
in  the  rehabilitation  of  peatlands  and  the  river  basin  management  plan.  This  measure  is 
expected  to  lead  to  enhanced  biodiversity  and  eco-systems,  water  quality  improvements, 
increased  carbon  storage  and  reduced  carbon  emissions.  The  restoration  of  peatlands  has  the 
potential to promote and encourage the return of flora and fauna in these areas. It is estimated in 
the  Irish  plan  that  over  a  30-year  timescale  3.3  million  tonnes  of  CO2  emissions  should  be 
avoided thanks to the implementation of the enhanced rehabilitation measures. The plan invests 
in  small  waste  water  treatment  plants  across  Ireland  that  are  expected  to  contribute  to  the 
sustainable use and protection of water and marine resources, pollution prevention and control. 
This  measure  also  aims  to  contribute  to  the  protection  and  restoration  of  biodiversity  and 
ecosystems.  The  main  aim  of  the  measure  is  to  advance  priority  waste  water  treatment  plant 
projects  whose  discharges  have  been  identified  as  putting  significant  pressures  on  receiving 
water bodies. 

Innovation in green technology and data systems is expected to play an important part in 
reducing  Ireland’s  carbon  footprint.  The  national  grand  challenge  programme  incentivises 
innovation  in  green  and  climate  solutions.  The  measure  encourages  technology  transfers  and 
cooperation between enterprises focussing on the low carbon economy. Funding is expected to 
be directed towards supporting research and innovation projects across government which have 
the potential to contribute to environmental objectives.  

Ireland has earmarked a substantial financial envelope to advancing green skills. According 
to  the plan, a suite of educational  courses and training programmes aimed at  developing  green 
skills  should  be  developed.  This  is  expected  to  contribute  to  upskilling  and  reskilling  those 
negatively affected by the pandemic whilst contributing to achieving Ireland’s carbon reduction 
targets and climate neutrality by 2050.  

The development of a shared Government data centre is expected to lead to reduced energy 
consumption. The majority of current public service server rooms and data centre facilities are 
old  and  inherently  inefficient  from  a  power  usage  perspective,  which  renders  them  unfit  for 
purpose. By increasing the overall power usage effectiveness the development of a new shared 
Government  data  centre  aims  to  reduce  by  at  least  50%  the  levels  of  energy  consumption 
compared to the existing data centres and server rooms it is replacing. 

The recovery and resilience plan is expected to strengthen Ireland’s governance framework 
of  its  climate  objectives  by  ensuring  environmental  legislation  is  enshrined  into  law.  The 

54 

 
 
entry into force of The Climate Action and Low Carbon Development (amendment) Bill 2021 is 
expected  to  drive  Ireland’s  transition  to  a  low  carbon  economy  with  the  objective  of  ensuring 
Ireland becomes a climate neutral economy by 2050. Milestones in the plan include the adoption 
of Ireland’s first carbon budget programme and the obligation to update the climate action plan 
on an annual basis. This reform underpins the investments being carried out in component 1.  

The  lasting impact  of  the  envisaged  measures  on  environmental  objectives  is  reflected  by 
the expected reduction  in greenhouse gas emissions and by energy savings resulting from 
improved  energy  efficiency.  The  recovery  and  resilience  plan  includes  measures  aimed  at 
reducing greenhouse gas emissions in the residential sector. The loan retrofit scheme fully meets 
the purposes of the 2019 climate action plan whereby  Ireland commits to reducing  greenhouse 
gas emissions in the residential sector from 6 million tonnes CO2 equivalent in 2017 to between 3 
and  4  million  tonnes  CO2  equivalent  in  2030  and  to  setting  a  trajectory  towards  net-zero 
greenhouse  gas  emissions  by  year  2050.  The  decarbonisation  of  enterprises  is  expected  to 
contribute specifically towards achieving the industry target of reducing emissions by 10%-15% 
by  2030  (2019  climate  action  plan).  CO2  savings  resulting  from  the  retrofit  of  Tom  Johnson 
House,  which  are  expected  to  be  realised  from  the  re-use  of  concrete,  are  estimated  at  around 
200-250kg CO2/m². The reuse of the building’s  structures  is  expected to  result in  an estimated 
saving  1  700  tonnes  of  CO2.  The  current  building  energy  rating  is  C3  with  253  kWh/m²/year 
primary energy use, while the target building energy rating after refurbishment is expected to be 
A2 with 61 kWh/m²/year primary energy use. This represents a 75% reduction in primary energy 
use.  The  measure  related  to  sustainable  transport  is  expected  to  lead  to  a  yearly  reduction  in 
vehicular  emissions  of  46 000  tonnes  of  CO2  equivalent,  as  a  result  of  its  full  implementation, 
this includes the rail elements for the overall Cork metropolitan area transport strategy project.  

Conclusion of the assessment under criterion 2.5 in Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 of 
Annex V to the RRF Regulation. 

4.6. Digital transition  

Digital tagging 

The  plan  follows  the  methodology  for  digital  tagging  set  out  in  Annex  VII  to  the  RRF 
Regulation  by  identifying  intervention  fields  and  corresponding  coefficients  for  the 
calculation of contribution to the digital objectives. The choice of intervention fields for the 
digital transition is well justified and reflects the nature, focus, objective or expected outcome of 
the  investments  included  in  the  component.  The  plan  does  not  propose  any  increased  digital 
coefficients for any measure.  

55 

 
 
Overall,  based  on  the  methodology,  measures  supporting  digital  objectives  in  Ireland’s 
recovery  and  resilience  plan  account  for  EUR  312  million,  which  represents  32%  of  the 
plan’s  total  allocation  of  EUR  989  million.  This  is  above the 20% target  set  out  in  the RRF 
Regulation.  The  digital  contribution  of  each  of  the  components  of  Ireland’s  recovery  and 
resilience plan is set out in Table 10 below. 

 Table 10: Digital contribution per component 

Component 

Cost 
(EUR million) 

Digital 
contribution 
(EUR million) 

1 Advancing the green transition 
2 Accelerating and expanding digital 
reforms and transformation 
3 Social and economic recovery and job 
creation 
Total 
Source: Irish recovery and resilience plan 

518.2 

291.0 

180.8 

989.9 

21.4 

291.0 

0 

312.4 

Share dedicated to digital  

as % of the 
cost of the 
component 

as % of the 
non-repayable 
allocation 

4.1% 

100% 

0% 

31.6% 

2.2% 

29.4% 

0% 

31.6% 

Note: the plan’s total allocation is EUR 988,966,534. This corresponds to the financial allocation after deduction of 
Ireland’s proportional share of the expenses of Article 6(2) of Regulation (EU) 2021/241, calculated in accordance 
with the methodology of Article 11 of that Regulation. The amount of the estimated total costs of the recovery and 
resilience plan is higher than the plan’s total allocation. 

Digital transition 

The plan is comprised of measures to accelerate and expand the digital transformation that 
are  also  expected  to  be  catalysts  for  the  wider  economic  recovery,  growth  and  increased 
competitiveness.  There  is  a  strong  focus  on  the  digital  transition  and  addressing  related 
challenges with  one  component  out  of three,  component  2 (Accelerating  and expanding digital 
reforms  and  transformation),  specifically  dedicated  to  the  digital  transformation  of  several 
sectors and to addressing the country-specific challenges resulting from the digital transition.  

The  digital  component  is  coherent  and  well  balanced  and  puts  a  strong  emphasis  on  the 
digital transition and the challenges resulting from it across economic and social sectors. It 
includes  six  investment  measures  and  one  reform  to  support  the  digitalisation  of  enterprises, 
address  the  risk  of  the  digital  divide  (including  in  the  education  sector),  enhance  digital  skills, 
and support the development of digital infrastructure and the delivery of digital public services. 
The  digital  component  contributes  to  addressing  Ireland’s  priorities  and  CSRs,  notably  on 

56 

 
 
supporting the digital transition, in particular digital infrastructure, as well as on digital skills and 
the risk of the digital divide. The four digital RRF flagships (connect, modernise, scale-up and 
reskill  and  upskill)  are  also  well  covered.  The  plan  also  tackles  the  four  strategic  priorities 
identified at EU level and reaffirmed in the recent communication on Europe’s Digital Decade26: 
skills,  infrastructures, business,  and government.  Finally, the measures in  the component cover 
five of the seven digital policy areas identified in Annex VII to the RRF Regulation, namely: (i) 
connectivity, (ii) human capital, (iii) digital public services, (iv) digitalisation of businesses, and 
(v)  investment  in  digital  capacities  and  deployment  of  advanced  technologies.  In  addition, 
digital-related investment in R&D are expected to be covered by the plan. 

With  regard  to  connectivity,  Ireland  proposes  to  build  a  low  latency  edge  platform  to 
support connectivity and compute capacity close to the user. In 2020, Ireland performed well 
on connectivity and the  proposed platform (measure 2.5) aims to  further  advance  Ireland’s  5G 
ambitions. The platform on which a variety of 5G public services are to be developed, tested and 
deployed is expected to be created with a high-speed backbone, compute nodes and low latency 
front haul. Ultimately, it is expected to constitute an enabler for other (public) services, such as 
for testing technologies and spectrum in the area of public protection and disaster relief, as well 
as in the context of ‘test before invest’ for SMEs and start-ups. By exploiting the transformative 
power of digital technologies, the measure is expected to contribute to the improvement of the 
quality  of  public  services  and  to  stimulate  innovation  and  economic  growth,  thereby  having  a 
long-term impact on the Irish economy. 

With  regard  to  human  capital,  the  plan  supports  enhanced  digital  skills  through 
infrastructural development in the education sector. This is particularly relevant, as in 2019 a 
relatively low percentage of the population had at least basic digital skills. The plan includes a 
programme to provide digital infrastructure and funding to schools (measure 2.3). The objective 
of this measure is to ensure that all learners are equipped with appropriate skills for the digital 
age and to improve the educational inclusion of students at risk of disengagement due to lack of 
access  to  digital  devices,  software,  or  network  connection.  More  precisely,  one  of  the  sub-
measures  complements  the  national  broadband  plan  by  delivering  high-speed  broadband 
connectivity to approximately one third of primary schools (990 schools) that would otherwise 
remain on speeds of less than 100 Megabits per second by 2023. The proposed sub-measure is 
expected to enable embedding digital technologies in teaching and learning and to contribute to 
developing key digital skills. In addition, as many of the impacted schools are in rural areas, it is 
also expected to lead to better social inclusion, poverty reduction and economic development in 
rural areas. Another sub-measure addresses the digital divide by enabling (post)-primary schools 
(3 415  schools)  to  support  students  most  at  risk  of  educational  disadvantage  through  the 

26 COM(2021) 118 - 2030 Digital Compass: the European way for the Digital Decade, 9 March 2021. 

57 

 
 
                                                           
provision  of  digital  devices  and  software.  This  sub-measure  is  expected  to  mitigate  and  lessen 
the educational and social impact of the crisis and ensure an inclusive recovery.  

The plan also includes a measure supporting the digital transformation of Irish education 
at all levels, enhancing digital skills and addressing the risk of a digital divide. The reform 
(measure 2.7) consists of four separate, yet complementary sub-measures. First, the development 
of a new digital strategy for schools 2021-2027 aims at further embedding digital technologies in 
school activities. Secondly, due to the pandemic the ways of working have changed and this has 
underlined  the  importance  of  high-level  ICT  skills.  Ireland’s  third  ICT  skills  action  plan 
therefore aims to increase the number of ICT graduates by over 65% by the end of 2022. This 
should be achieved through various measures such as the creation of a ‘progression pathway’ in 
further  and  higher  education,  expansion  of  ICT  apprenticeships  and  reskilling  professionals. 
Thirdly,  a  new  10-year  adult  literacy,  numeracy  and  digital  literacy  strategy  is  under 
development  and  aims  to  help  individuals  build  up  their  knowledge  in  terms  of  literacy, 
numeracy  and digital  literacy thereby  enabling them  to  participate  fully  in  society.  Finally, the 
last  reform  measure  provides  for  a  one-off  COVID-19  grant  to  higher  and  further  education 
institutions to enable them to provide disadvantaged students with  ICT devices to facilitate the 
shift to online and blended models of learning. To this end, over 20 000 ICT devices have been 
procured.  The  reform  addresses  the  risk  of  a  digital  divide  by  focusing  on  digital  skills 
throughout the education system. The reform is also expected to ensure that all learners develop 
foundational  skills  they  need  to  engage  in  the  digital  economy  and  to  take  advantage  of  the 
digital transition. Consequently, measure 2.7 is expected to have a lasting impact on the overall 
economic and social resilience and on employment, as it focusses on the strategic development 
of all levels of the education system and helps learners fully grasp the opportunities of the digital 
transition. 

The plan is expected to support the digitalisation of public administration services. The use 
of  digital  technologies  in  the  public  sector  in  Ireland  was  above  the  EU  average  in  2020.  To 
further advance the digitalisation of the public administration, the plan is expected to allow for 
greater interoperability of digital public services and to improve the quality of their provision to 
citizens, by introducing an online response option for the census of population (measure 2.4) and 
a  suite  of  eHealth  projects  (measure  2.6).  The  online  census  measure  aims  at  improving  the 
capacity  to  collect  and  analyse  data  through  the  provision  of  a  scalable  online  data  collection 
capability  for  the  Central  Statistics  Office.  It  also  aims  to  reduce  both  the  burden  on  survey 
respondents  and  the  cost  to  the  State  of  collecting  data,  while  maintaining  its  quality  and 
confidentiality.  The  suite  of  eHealth  measures  aims  to  support  the  digitalisation  of  the  Irish 
healthcare system by enhancing interoperability between different digital systems. It includes: (i) 
the  deployment  of  ePharmacy  systems  across  hospitals  in  Ireland  to  ensure  safety  for  patients, 
increase  transparency  in  relation  to  the  usage  of  medications  and  associated  expenditure,  and 
provide  a  foundation  for  ePrescribing  tools;  and  (ii)  the  deployment  of  an  integrated  financial 

58 

 
 
management system to foster financial and procurement efficiencies, improve transparency, and 
ultimately increase the capability of the finance function to support the health system.  

The  plan  also  supports  digital  capabilities  and  the  deployment  of  advanced  technologies. 
Currently there  are disparate and inefficient  Government  server rooms  and data centres, which 
are sub-optimal in terms of location, physical risk, and operational and cyber resilience. The plan 
provides for the construction of a high-quality and fit for purpose shared Government data centre 
enabling the migration  of the servers and services to  it  (measure 2.1).  The development  of the 
shared  Government  data  centre  is  ultimately  expected  to  allow  for  greater  interoperability  of 
public  services,  improved  quality  of  service  and  the  implementation  of  the  ‘once  only’ 
principle27.  Moreover,  in  terms  of  greening  the  digital  sector,  the  measure  aims  to  ensure  the 
power usage effectiveness and may also constitute an innovative solution for energy efficiency, 
such as by reusing heat from the data centre to heat other buildings. 

With  regard  to  the  digitalisation  of  businesses,  Ireland’s  plan  includes  a  measure  to 
support  the  digitalisation  of  companies  in  Ireland,  particularly  of  SMEs. Ireland performs 
very  well  on  integrating  digital  technologies  in  businesses  and  SMEs  continue  to  excel  in  e-
commerce.  However,  SMEs  lag  in  digitisation  of  business  processes  such  as  supply  chain 
management, enterprise resource planning, and customer relationship management. To tackle the 
unbalanced  digitalisation  among  companies,  the  plan  includes  the  programme  to  drive  digital 
transformation of companies, particularly SMEs, across all sectors in Ireland (measure 2.2). This 
measure aims to advance innovation, expand market presence, boost productivity and ultimately 
increase competitiveness. It includes the establishment of four Irish European digital innovation 
hubs (EDIHs) and the creation of clusters anchored in the EDIHs, which are expected to be an 
important facilitator of cross-border collaboration and therefore strengthen value chains. In case 
EDIHs  are  co-financed  by  the  RRF  and  digital  Europe  programme,  Ireland  has  provided 
guarantees that double funding will be avoided effectively.  

The  Irish  plan  contributes  to  addressing  key  digital  challenges  by  incentivising  research 
teams  to develop viable practical  innovative solutions. The digital dimension of the national 
grand  challenge  programme  aims  to  address  digital  challenges  such  as  (i)  bridging  the  digital 
divide by ensuring that all members of society have access to new digital technologies and have 
the digital skills necessary to use them, (ii) using digital technologies to advance healthcare by 
personalising  medicine  and  healthcare,  driving  uptake  of  preventative  health  mechanisms  and 
increasing the availability of datasets and biobanks and allowing new research to take place into 
relevant health issues; and (iii) enhancing efficiency and productivity across the public services 

27‘Once only’ principle is a concept that aims to ensure that State asks for information from the citizen once only and re-uses it as 
required in accordance with GDPR. 

59 

 
 
                                                           
by maximising impact of artificial intelligence, machine learning, distributed ledger technology, 
and robotics. 

Conclusion of the assessment under criterion 2.6 in Annex V to the RRF Regulation 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and ensures that at least 20% of its total 
allocation  contribute  to  support  digital  objectives.  This  would  warrant  a  rating  of  A  under 
criterion 2.6 of Annex V to the RRF Regulation. 

4.7. Lasting impact of the plan  

Structural change in administration and institutions 

The plan includes several measures that are expected to lead to structural change in public 
administration. The plan is expected to allow greater interoperability of digital services and to 
improve  quality  of  service  in  the  public  administration,  notably  through  measures  such  as  the 
provision of an online response option for the census of population. By enabling an online census 
response option, the measure aims at improving the capacity to capture and analyse data through 
the  provision  of  a  scalable  online  data  collection  capability  for  the  Central  Statistics  Office.  It 
also aims to reduce both the burden on survey respondents and the cost to the State of collecting 
data while maintaining its quality and confidentiality. Moreover, the introduction of the SME test 
is expected to help limit regulatory barrier to entrepreneurship, as policymakers are expected to 
consider whether any new legislation or regulation could create a burden for SMEs. The plan is 
also  expected  to  strengthen  anti-money  laundering  supervision,  with  a  reinforcement  of  the 
capacity and resources of supervisors, supported by the publication of a sectoral risk assessment 
of  trust  or  company  service  providers.  In  the  area  of  housing,  the  plan  establishes  the  Land 
Development  Agency  as  a  commercial  semi  state  body  to  manage  the  State’s  own  lands  and 
develop new homes and regenerate under-utilised sites. 

Several  of  the  proposed  reforms  and  investments  have  the  potential  to  lead  to  structural 
change  in  healthcare.  The  plan  aims  to  support  the  digitalisation  of  the  healthcare  system  by 
several eHealth investments that can be expected to improve cost-effectiveness and accessibility. 
The suite of eHealth projects aims at supporting the digitalisation of the Irish healthcare system 
by  enhancing  interoperability  between  the  digital  systems.  It  also  aims  at  building  the  digital 
infrastructure  required  to  meet  health  demands  and  integrating  health  services,  thereby  further 
driving the digital transformation of the public service and of the healthcare system in particular. 
Consequently,  the  suite  of  eHealth  measures  are  expected  to  have  an  impact  that  is  sustained 
over  time.  The  plan  also  includes  reforms  that  are  a  step  towards  the  implementation  of 
Sláintecare – Ireland’s long-term health system strategy – which, among other objectives, aims 
to  achieve  a  modern  universal  single-tier  healthcare  system,  with  equal  access  to  care  services 
irrespective of ability to pay. The implementation of the Sláintecare consultant contract, marks 

60 

 
 
the introduction of a ‘public only’ consultant contract that has the potential to address the current 
number  of  temporary  and  unfilled  consultant  posts.  Moreover,  the  new  contract  supports  a 
central aim of Sláintecare, which is to remove private practice from public hospitals, in order to 
ensure that public healthcare facilities are used for public patients only. In addition, the proposed 
reforms  to  expand  the  chronic  disease  management  programme  and  operationalise  community 
healthcare  networks  aim  to  deliver  more  care  within  the  community  rather  than  in  hospitals, 
which may also improve accessibility. 

The  plan  also  aims  to  introduce  some  structural  changes  in  education.  It  includes  a 
programme to provide digital infrastructure and funding to schools and a reform addressing the 
digital divide and enhancing digital skills. The objective is to provide an education system that 
ensures  all  learners  are  equipped  with  appropriate  skills  for  the  digital  age.  The  measure  is 
expected  to  deliver  high-speed  broadband  connectivity  to  approximately  one  third  of  primary 
schools  (990  schools)  that  would  otherwise  remain  on  speeds  of  less  than  100  Megabits  per 
second  by  2023.  The  proposed  measure  is  expected  to  enable  embedding  the  use  of  digital 
technologies in teaching and learning and contribute to the development of key digital skills. The 
measure  also  aims  at  enabling  schools  to  support  students  most  at  risk  of  educational 
disadvantage  through  the  provision  of  digital  devices  and  software.  This  should  mitigate  and 
lessen the educational and social impact of the crisis to ensure an inclusive recovery.  

In addition, the plan includes a reform aimed at supporting digital transformation of Irish 
education at all levels,  enhancing digital skills and addressing the risk of a digital divide. 
The  reform  addresses  the  risk  of  digital  divide  by  focusing  on  digital  skills  throughout  the 
education system, thereby  making it more resilient and better able to  cope with  disruptions.  In 
addition, the reform supports employment through developing skills by equipping learners with 
the skills they need to engage in the digital economy and by providing opportunities for adults to 
reskill  or  upskill  in  line  with  the  changing  requirements  of  a  more  digitalised  labour  market. 
Consequently, the plan is expected to have a lasting impact on the overall economic and social 
resilience  and  employment,  as  it  focuses  on  the  strategic  development  of  all  levels  of  the 
education system and helps learners to fully grasp opportunities of the digital transition. Finally, 
the  technological  universities  transformation  fund  has  the  potential  to  support  changes  to  the 
higher  education  landscape  and  address  risks  of  the  digital  divide,  with  capacity  building  at 
technological universities including an emphasis on the digital transition.  

Structural change in policies  

The plan includes two reforms that introduce structural changes to green policies. The entry 
into force of the Climate Action and Low Carbon Development (amendment) Bill is expected to 
require the adoption of sectoral  emissions ceilings  for relevant  sectors of  the economy that are 
expected to have a lasting impact on greenhouse gas reductions. Its enforcement is expected to 
be  accompanied  by  a  set  of  measures  –  first  carbon  budget  programmes,  annual  update  of  the 
climate  action  plan,  climate  reporting  assessing  the  policies  implemented  under  the  climate 

61 

 
 
action  plan  –  that  are  expected  to  secure  a  structural  shift  of  the  Irish  economy  towards 
decarbonisation. Second, a carbon tax, which is expected to increase on a yearly basis following 
a trajectory leading to a rate of EUR 100 per tonne of CO2 emissions in 2030, has the potential to 
dis-incentivise in the long term the use of fossil fuels and encourage the use of greener fuels by 
industry and society. 

Additional  reforms  are  also  likely  to  lead  to  structural  changes  in  policy.  Among  other 
reforms to address features of the tax system that may facilitate aggressive tax planning, the plan 
commits  to  measures,  including  withholding  taxes  or  non-deductibility,  applying  from  2024  to 
outbound payments to EU blacklisted, as well as zero-tax and no-tax jurisdictions. In the area of 
pensions,  the  plan  includes  a  set  of  legislative  measures  that  aim  to  simplify  and  harmonise 
elements  of  the  Irish  supplementary  pension’s  landscape,  by  facilitating  movement  from 
occupational pension schemes to other pension plans, assisting in harmonising the tax treatment 
of contributions, and helping simplify the drawdown process. 

Lasting impact  

The  implementation  of  the  envisaged  measures  is  expected  to  have  a  lasting  impact.  The 
plan is fully aligned and integrated into the wider government national economic and recovery 
plan,  the  review  of  the  national  development  plan,  and  the  forthcoming  update  of  the  climate 
action  plan.  This  can  help  ensure  that  the  implementation  of  the  plan  is  well  coordinated  and 
lasting.  The  plan  includes  several  measures  that  may  help  improve  the  productivity  growth  of 
domestic  Irish  firms  by  supporting  their  digitalisation  and  reducing  barriers  to  investment, 
including  regulatory  barriers  to  entrepreneurship,  housing  affordability,  and  skill  shortages. 
Skill-enhancing and innovation-related measures, in general, can be expected to have important 
impacts  on  GDP  and  employment  that  are  expected  to  materialise  fully  in  the  longer  run. 
Reforms aimed at the efficient management of vacant land have the potential to further support 
housing  supply  growth  in  the  future.  The  lasting  impact  of  measures  supporting  the  green 
transition  ranges  from  the  transitory  direct  employment  effects  to  the  long-term  effects  of 
providing better environment for future generations. Public investment in energy efficiency and 
sustainable transport can also be expected to increase long-term productivity and potential GDP. 
Finally, the structural reforms in the plan can be expected to have a lasting impact. As set out in 
Box  2,  halving  the  gap  vis-à-vis  best  performers  could  raise  Ireland  GDP  by  up  to  11%  in  20 
years’ time.  

Conclusion of the assessment under criterion 2.7 in Annex V to the RRF Regulation 

Taking into consideration all reforms and investments envisaged by  Ireland in its recovery and 
resilience  plan,  their  implementation  is  expected  to  a  large  extent  to  bring  about  a  structural 
change  in  the  administration  or  in  relevant  institutions  and  in  relevant  policies  and  to  have  a 
lasting  impact.  This  would  warrant  a  rating  of  A  under  criterion  2.7  of  Annex  V  to  the  RRF 
Regulation. 

62 

 
 
4.8. Milestones, targets, monitoring and implementation  

Adequacy  of  the  structure  tasked  with  the  implementation  of  the  plan,  monitoring  of  progress 
and reporting  

Whereas the overall responsibility for the implementation of the plan rests with  the Irish 
Government,  a  newly  created  Implementing  Body  within  the  Department  of  Public 
Expenditure  and  Reform  is  expected  to  be  responsible  for  its  strategic  monitoring  and 
management.  It  will  be  essential  that  the  Implementing  Body  be  put  in  a  position  to  fully 
perform the role set out in the plan, which is to act as a single contact point for the Commission, 
ensure  coordination  among  Irish  authorities,  report  on  progress  on  milestones  and  targets, 
oversee  the  implementation  of  control  measures,  provide  technical  and  systems  support,  and 
communicate  at  national  level  to  promote  and  publicise  funding  from  the  RRF.  The 
Implementing Body is expected to report to the Minister for Public Expenditure and Reform. The 
plan does not explicitly specify whether the Implementing Body is also responsible for assuring 
that reporting on milestones and targets by accountable Departments and other bodies is correct. 

The plan provides a description of the institutional actors in charge of the implementation 
of  individual  reforms  and  investments.  The descriptions  of reforms  and investments  refer to 
the  institutional  actors  in  charge  of  their  implementation,  while  a  comprehensive  overview  is 
provided.  Responsibility  for  implementing  specific  measures  mainly  lies  with  Government 
Departments,  but  also  other  public  entities,  in  particular  in  the  case  of  investments.  Although 
other  public  bodies  may  in  some  cases  deliver  aspects  of  a  measure,  accountability  for  the 
delivery of the entire measure and reporting is expected to lie with the accountable Department 
or another body, designated as accountable for a particular measure. 

The plan states that accountable Departments and other bodies will be required to apply 
the Public Spending Code. An updated version of the Public Spending Code was published in 
December 2020 and contains a set of rules, procedures and guidance to ensure value for money 
in public expenditure across the Irish Public Service. It imposes obligations on organisations that 
spend  public  money  at  all  stages  of  a  project  lifecycle.  Accountable  Departments  and  other 
bodies  will  be  responsible  for  meeting  all  regulatory,  monitoring  and  control  requirements, 
providing  reporting  on  their  respective  milestones  and  targets,  reporting  on  costs  (as 
appropriate), communication at measure level, and record keeping. 

According to the plan, all responsible Departments and bodies should be represented in a 
Delivery Committee. The latter is expected to be established and meet at least quarterly. It is to 
be chaired by the Department of Public Expenditure and Reform  and deputy co-chaired by the 
Department  of  Taoiseach  and  the  Department  of  Finance,  at  senior  official  level.  It  should 
maintain ongoing oversight over the implementation of the plan and address issues as they arise. 
The  Delivery  Committee  is  expected  to  be  tasked  with  driving  project  delivery  and  provide  a 
forum  for  collaboration  and  coordination  across  the  plan.  Issues  related  both  to  the 
implementation  of  the  plan  and  to  the  European  Semester  are  expected  to  be  subject  to  close 

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cooperation  between  the  Department  of  Public  Expenditure  and  Reform,  the  Department  of 
Taoiseach and the Department of Finance. 

Milestones, targets and indicators 

The  milestones  and  targets  of  the  Irish  plan  constitute  an  appropriate  system  for 
monitoring  the  plan’s  implementation.  They  are  sufficiently  clear  and  comprehensive  to 
ensure that their completion can be traced and verified. They are relevant as they represent key 
steps of the measures and concrete achievements directly linked to  their implementation. They 
reflect adequately the ambition of the plan while appearing realistic and under the control of the 
Irish authorities. The verification mechanisms, data collection and responsibilities described by 
the  Irish  authorities  appear  sufficiently  robust  to  justify  in  an  adequate  manner  the  payment 
requests once the milestones and targets are completed. Milestones and targets also contain the 
appropriate  requirements  to  ensure  that  the  proposed  climate  tracking  and  digital  tagging  is 
correct and that compliance with ‘do no significant harm’ principle is confirmed.  

Overall, the milestones and targets included in the plan reach a satisfactory balance, both in 
terms  of their overall number (109 milestones and targets) and in terms  of repartition between 
milestones  (74)  and  targets  (35).  The  milestones  and  targets  in  the  plan  are  overall  distributed 
throughout  the  RRF’s  lifetime  in  a  balanced  manner.  There  are  in  general  more  deliverables 
towards the end of the year (i.e. in the fourth quarter). The presence of four milestones and five 
targets in the third quarter of 2026 is a risk for the timely submission of the last payment request. 

Overall organisational arrangements 

The plan refers to its relatively small size and states that the administrative structures put 
in  place  for  its  delivery  are  commensurate.  Although  the  national  legal  framework  for 
implementation is not described in details, the plan refers to the Cabinet’s decision on the formal 
approval  of  the  plan  on  28  May  2021  as  the  legal  basis  for  allocating  responsibilities  for  the 
attainment of specific milestones and targets to respective Departments and other bodies. It also 
specifies that a Decision of the Government of 22 December 2020 provides the basis for creating 
the Implementing Body. 

Challenges  relating  to  the  proper  staffing  of  the  Implementing  Body  are  expected  to  be 
addressed  through  the  implementation  of  a  dedicated  milestone.  The  plan  states  that  the 
Implementing Body will be given the necessary administrative capacity to carry out its functions. 
While it does not contain a clear assessment of staffing and resource needs, a specific milestone 
addresses this shortcoming. Attention should be continuously paid to ensuring that the objective 
of  granting  the  Implementing  Body  with  appropriate  means  to  perform  its  tasks  is  met.  At the 
same time, this should not be achieved to the detriment of the management of other Union funds. 

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Conclusion of the assessment under criterion 2.8 in Annex V to the RRF Regulation 

The  arrangements  proposed  by  Ireland  in  its  recovery  and  resilience  plan  are  expected  to  be 
adequate to ensure effective monitoring and implementation of the recovery and resilience plan, 
including the envisaged timetable, milestones and targets, and the related indicators. This would 
warrant a rating of A under the assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9. Costing  

Reasonable costs  

Ireland provided documents to justify and explain the cost estimates and gave explanations 
on  how  those  estimates  were  computed.  The  level  of  supporting  evidence  is  not  fully 
consistent  throughout  the  plan.  While  for  the  most  part  the  calculations  and  the  methodology 
used  were  described,  at  least  at  high  level,  the  level  of  details  was  not  homogeneous. 
Explanations  of  costing  for  measures  covering  roughly  half  of  the  total  cost  were  clearly 
understandable,  while  explanations  on  measures  covering  the  other  half  of  the  total  cost  could 
have  been  more  detailed.  Further  information  on  costing,  providing  a  greater  depth  of 
calculations and verifiable sources, was requested following the submission of the plan and led 
overall to a higher level of assurance that estimated costs in the plan are reasonable. Overall, cost 
estimates have been deemed to a medium extent reasonable.  

Plausible costs 

The amount of the estimated total cost of the plan is in line with the nature and type of the 
envisaged  reforms  and  investments.  Ireland  provided  documents  to  substantiate  the  cost 
estimates.  However,  the  link  between  the  supporting  documents  and  the  amount  proposed  was 
not  spelt out  homogeneously across the plan. Nonetheless  the plausibility of the  estimates was 
considered sufficient for all the measures in plan, even if the justification and evidence provided 
by the Ireland on cost estimates covering roughly half of the total cost was not strong enough to 
be assessed as plausible ‘to a high extent’. Overall, the cost estimates were deemed appropriate 
and seen as establishing the plausibility of the cost estimates to a medium extent. 

No double Union financing  

The  individual  components  provide  information  about  additional  investments  from  other 
EU funds overall, when they are already known. A coordination mechanism has been put in 
place  to  ensure  that  double  funding  is  avoided,  which  relies  mainly  on  the  exchange  of 
information  between  responsible  Departments  and  other  bodies  and  on  ex-post  verifications. 
When  complementarities  with  other  EU  funds  are  already  identified,  Ireland’s  plan  mentions 
them, such as with the EU LIFE nature funding. Ireland is expected to take into account further 
complementarities  when  finalising  the  programming  of  other  EU  funds,  such  as  the  European 
regional development fund (ERDF) or the just transition fund. Double funding is expected to be 

65 

 
 
avoided thanks to a verification procedure relying on regular reporting, cross-checking with EU 
fund managers and coordination with the work of cohesion policy programmes.  

Commensurate and cost-efficient costs  

Taking into account the economic and social impact of the plan, as well as the reasonability 
and  plausibility  of  the  cost  assessment,  it  is  considered  that  the  plan  is  in  line  with  the 
principle of cost-efficiency. The plan is fully aligned with, and integrated into, the government’s 
wider national economic and recovery plan, the review of the national development plan, and the 
forthcoming  update  of  the  climate  action  plan.  The  plan  includes  several  measures  that  are 
expected  to  lead  to  structural  change  in  public  administration,  housing,  healthcare,  education, 
digitalisation and green policies.  

Conclusion of the assessment under criterion 2.9 in Annex V to the RRF Regulation 

The justification provided by Ireland on the amount of the estimated total costs of the recovery 
and resilience plan is to a medium extent reasonable, plausible, in line with the principle of cost-
efficiency  and  is  commensurate  to  the  expected  national  economic  and  social  impact.  Ireland 
provided sufficient information and evidence that the amount of the estimated cost of the reforms 
and  investments  of  the  recovery  and  resilience  plan  to  be  financed  under  the  Facility  is  not 
covered  by  existing  or  planned  Union  financing.  This  would  warrant  a  rating  of  B  under  the 
assessment criterion 2.9 of Annex V to the RRF Regulation. 

4.10. 

Controls and audit  

Robustness of internal control system and distribution of roles and responsibilities  

Ireland’s  recovery  and  resilience  plan  describes  its  implementation  system.  Accountable 
Departments and other bodies are responsible and accountable for implementing, delivering, and 
reporting  on  the  individual  investment  and  reform  measures  in  the  plan,  in  line  with  their 
respective  areas  of  competence.  This  includes  the  responsibility  for  appropriate  monitoring, 
controls, reporting of serious irregularities and double funding, and record keeping. A Delivery 
Committee,  meeting  at  least  quarterly,  is  expected  to  maintain  ongoing  oversight  over  the 
implementation  of  the  recovery  and  resilience  plan.  All  accountable  Departments  and  other 
bodies  with  responsibility  for  investments  or  reforms  as  well  as  the  Implementing  Body  are 
expected  to  be  represented  in  the  committee.  The  Delivery  Committee  should  be  tasked  with 
driving  project  delivery  and  provide  a  forum  for  collaboration  and  coordination  across  the 
programme.  The  Implementing  Body  for  the  recovery  and  resilience  plan,  located  in  the 
Department of Public Expenditure and Reform and reporting directly to the Minister for Public 
Expenditure  and  Reform,  is  expected  to  be  responsible  for  the  strategic  monitoring  and 
management of the plan. The ERDF Audit Authority is due to be the  Independent  Audit Body 
for the National  Recovery  and Resilience Programme.  It  is  expected to  carry out  audits before 
each payment request  under the terms  of EU Regulations and in  compliance with  international 
auditing standards. 

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The system presents a robust process and structure, where the roles and responsibilities are 
clearly  defined  and  the  relevant  control  functions  are  appropriately  segregated.  The 
Implementing Body is expected to prepare payment requests and the management declarations, 
and provide to the Commission the summary of audits prepared by the Independent Audit Body. 
The  Independent  Audit  Body  is  expected  to  oversee  implementation  of  control  measures.  The 
Implementing  Body  is  expected  to  provide  confirmation  on  the  reliability  of  the  data  and  the 
progress of the programme once the IT system has been put in place to collect, record and store 
all required data on each measure. 

The  Independent  Audit  Body  and  Implementing  Body  are  both  located  within  the  same 
public  body,  the  Department  of  Public  Expenditure  and  Reform,  but  as  they  are  in 
different  divisions  there  is  a  clear  separation  of  functions  between  the  two  bodies.  The 
Independent  Audit  Body  is  also  independent  from  the  accountable  Departments  and  public 
beneficiary  bodies  that  will  be  involved  in  the  RRF  in  Ireland.  This  is  in  line  with  the  Unit’s 
ERDF Audit Authority function for which the certifying authority is a separate function within 
the Department. The Independent Audit Body does not have any decision rights nor has any role 
in the management of the funds, which are managed, paid and monitored by the Implementing 
Body, accountable Departments or public beneficiary bodies. The  Independent Audit Body has 
sole responsibility for the planning and selection of systems and operations to be audited and the 
manner in which the audits are conducted.  

Adequacy of control systems and other relevant arrangements  

The  recovery  and  resilience  plan  states  the  procedures  that  are  in  place  to  ensure 
compliance with applicable Union and national law, throughout the implementation of all 
measures.  The  evidence,  monitoring  and  reporting  of  irregularities  is  the  responsibility  of  the 
accountable  Departments  and  other  bodies,  which  are  expected  to  report  to  their  management 
board  if  any  risk  of  irregularities  arises.  The  Implementing  Body  is  responsible  for  overseeing 
the  implementation  of  control  measures.  A  memorandum  of  understanding  is  expected  to  be 
signed  between  the  Implementing  Body  and  each  accountable  Department  and  other  body.  It 
should  set  out,  among  other  things:  (i)  audit  and  control  requirements;  (ii)  document  retention 
requirements;  (iii)  verification  and  reporting  requirements  for  the  audit  trail;  (iv)  irregularities, 
fraud,  conflict  of  interest,  and  double  funding  reporting  requirements;  (v)  public  procurement 
requirements; and (vi) monitoring and reporting requirements.  

The  Implementing  Body  is  expected  to  ensure  awareness  of  national  legislation  and 
guidance in place and organise training on preventing conflict of interest, corruption and 
fraud.  The  Implementing  Body  is  expected  to  prevent  corruption  and  promote  the  integrity 
measures  set  out  in  the  Ethics  Acts  and  the  Lobbying  Act  2015,  and  to  ensure  the  statutory 
protections  available  for  whistle-blowers.  The  Implementing  Body  is  expected  to  share  the 
Commission’s guidance note on fraud risk assessment and effective and proportionate anti-fraud 
measures  (EGESIF  14-0021)  with  the  accountable  Departments  and  other  bodies,  and  provide 

67 

 
 
training and guidance on fraud warning signs and indicators. Finally, the Implementing Body is 
expected to use the data mining tool as part of the verification procedures of the beneficiaries of 
funding from the RRF. 

A reporting mechanism on the RRF information system is expected to be created to ensure 
final  beneficiary  details  are  adequately  recorded  to  declare  the  absence  of  conflict  of 
interest for the accountable Departments and  other bodies. These accountable Departments 
are  expected  to  report  any  irregularities,  such  as  fraud,  corruption,  conflict  of  interest  and 
double-funding,  to  the  statutory  authorities,  as  well  as  to  complete  a  detailed  report  for  the 
Implementing  Body  and  the  Independent  Audit  Body.  When  it  is  established  that  a  serious 
irregularity  has  arisen,  the  relevant  accountable  Department  or  other  body  must  ensure  the 
suspension  of  all  relevant  activities  until  the  matter  has  been  resolved.  A  report  detailing  the 
incident and the steps taken to resolve it should be sent to the Implementing Body. In its audits, 
the  Independent  Audit  Body  is  expected  to  report  to  the  Audit  Committee  on  its  RRF  audit 
activities,  including  notification  of  all  critical  findings  or  irregularities  which  would  have  the 
potential  to  reduce  Ireland’s  drawdown  of  funds.  It  should  be  the  Implementing  Body’s 
responsibility  to  respond  appropriately  and  address  any  situations,  which  may  objectively  be 
perceived as a conflict of interest within an accountable Department or other body. 

The proposed measures give assurance that there is an adequate level of control to prevent, 
detect  and  correct  irregularities  identified  when  using  funds  provided  by  the  RRF.  The 
RRF  information  system  is  expected  to  be  a  crucial  tool  in  the  detection  and  prevention  of 
serious  irregularities,  as  it  will  require  accountable  Departments  and  other  bodies  to  record 
information related to the final recipients of the funds. The RRF information system is expected 
to  be  used  to  report  identified  conflict  of  interest  by  the  accountable  Departments  to  their 
management board. The  Implementing  Body is  also  expected to  provide training  and  guidance 
on fraud warning signs and indicators and to use the data mining tool as part of the verification 
procedures  of  the  beneficiaries  of  funding.  Moreover,  the  plan  states  that  the  accountable 
Departments  and  other  bodies  should  use  the  single  data-mining  tool  made  available  by  the 
Commission (ARACHNE), as it is an effective tool in the fight against fraud, and irregularities. 
On  the  procedures  to  recover  the  funds,  the  authorities  have  confirmed  that  any  irregularity 
requiring  the  recovery  of  funds  should  be  pursued  by  the  accountable  Department  through  the 
Irish Court system as appropriate. 

There  are  adequate  procedures  in  place  for  the  avoidance  of  serious  irregularities.  Each 
Department’s  Accounting  Officer  is  responsible  for  signing  off  the  annual  accounts  of  the 
relevant  Department,  office  or  body.  To  this  end,  the  Accounting  Officer  is  required  to  be 
satisfied  that  the  Department’s  arrangements  are  adequate  to  prevent  and  detect  serious 
irregularities  and  double  funding.  This  is  to  ensure  that  all  funds  under  their  responsibility  are 
handled correctly and to ensure their prompt and efficient recovery, when required following the 
detection  of  serious  irregularities.  Accounting  Officers  should  also  ensure  that  they  have  staff 
throughout their Department or office appropriately trained in the management of public funds. 

68 

 
 
In  addition,  the  Accounting  Officer  must  ensure  that  there  are  adequate  financial  management 
systems  in  place  to  support  the  proper  administration  of  the  Department’s  functions  in  an 
economic and efficient way. To prevent and detect fraud and corruption, the Implementing Body 
is  expected  to  cooperate  closely  with  the  national  Anti-Fraud  Coordination  Service  (AFCOS), 
which in turn cooperates with the European Anti-Fraud Office (OLAF) on matters related to anti-
fraud and protecting the EU budget.  

A dedicated milestone is expected to ensure that a repository system be operational by the 
time  of  the  first  payment  request.  The  RRF  information  system  is  expected  to  store  data  on 
final beneficiaries, contractors, sub-contractors, and beneficial owners, and a list of measures for 
the  implementation  of  reforms  and  investments  under  the  recovery  and  resilience  plan.  The 
Commission  needs  reassurance  that  a  repository  system  for  recording  and  storing  and  making 
available  all  relevant  data  related  to  the  implementation  of  the  plan  –  the  achievement  of 
milestones and targets, data on final recipient, contractors, subcontractors and beneficial owners 
–  be  operational  by  the  time  the  first  payment  request  is  made.  To  ensure  its  development, 
Ireland  is  expected  to  submit  a  dedicated  audit  report  confirming  the  effectiveness  of  the 
functionalities  of  the  repository  system  before  the  first  payment  request.  This  should  be 
implemented through a dedicated milestone. 

Adequacy of arrangements to avoid double EU funding  

The avoidance, detection and prevention of double funding is expected to be ensured at all 
stages of the projects’ lifecycle, through procedures identified in the recovery and resilience 
plan. First, as a prerequisite to funding, accountable Departments and other bodies are required 
to record information related to the final recipients of the funds in the RRF information system. 
Accountable Departments and other bodies must report on a six monthly basis on all sources of 
funding. This is expected to be done through an electronic reporting structure via the stand-alone 
RRF  information  system,  which  is  under  development  and  subject  to  a  dedicated  milestone. 
Given the small number of measures included in the plan based on which payment requests are 
expected  to  be  submitted  each  year,  the  Irish  authorities  believe  it  will  be  relatively 
straightforward to generate a systems report, providing detail on key information fields such as 
project  name,  beneficiary,  date  of  project.  The  information  in  the  report  should  be  used  to 
conduct  a  search  of  the  eCohesion  system.  Another  key  element  is  expected  to  be  the  regular 
bilateral  communications  with  all  other  EU  fund  managers,  who  should  be  provided  with  the 
above-mentioned report on funding sources. Regarding a separation of funding streams, the plan 
includes an initial analysis of the priorities and possible complementarities of the RRF funding 
with other EU funding streams. Coordination should be ensured through continued meetings of 
fund  managers  during  programme  development  and  delivery.  In  addition,  the  Implementing 
Body is expected to be a member of the Partnership Process Steering Group, which guides and 
advises on the programming of all cohesion policy programmes. The Independent Audit Body is 
expected to contact the ESI Fund Audit Authorities to check that expenditure items being funded 
by the RRF have not been subject to claims from other EU Cohesion Funds. 

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The arrangements put in place to avoid double funding from the Facility and other Union 
programmes are sufficient and adequate in their description. The RRF information system is 
expected to allow for crosschecking and consolidation of other possible data sources related to 
the  EU  funding  with  the  sixteen  RRF  investment  measures.  It  should  also  allow  coordination 
with  other  EU  fund  managers.  Detailed  records  and  supporting  documents  are  expected  to  be 
kept at the appropriate management level for each project, thus ensuring an adequate audit trail 
for  the  prevention,  detection  and  correction  of  serious  irregularities,  including  double  funding. 
This is expected to be enabled through the RRF information system, where evidence will be held 
on the achievement of the milestones and targets for each individual project.  

Legal empowerment and administrative capacity of control function 

Roles  and  responsibilities  of  the  actors  for  controls  and  audits  are  clear,  relevant  control 
functions are appropriately segregated and the independence of actors performing audits is 
ensured. Overall responsibility for the implementation of Ireland’s recovery and resilience plan 
rests with Government. The Cabinet formally approved the plan on 28 May 2021, and allocated 
responsibility for the attainment of specific milestones and targets with the lead Department for 
each of the investment or reforms commitments. Additionally, the Decision of the Government 
on  22  December  2021  established  the  Implementing  Body  for  the  National  Recovery  and 
Resilience Plan, which is located in the Department of Public Expenditure and Reform.  

The Irish Government has designated the Internal and EU Audit Unit of the Department of 
Public Expenditure and Reform as the Independent Audit Body for Ireland’s recovery and 
resilience plan. It should comprise an Audit Manager and two auditors allocated to RRF systems 
and operations audits as from 2022. In addition, the Head of Unit should allocate approximately 
25% of his time to development and oversight of the RRF audits.  

Ireland  indicated  that  the  Implementing  Body  is  expected  to  have  the  necessary 
administrative capacity to carry out its functions, but no further detail has been provided. 
The detailed description of the organisation structure of the Implementing Body is still needed. 
Additionally, adequate staffing of the audit bodies, both for the ESIF funds and for the RRF, is 
required  to  avoid  any  risk  that  the  audit  functions  for  all  EU  funds  be  understaffed.  This  is 
addressed through a dedicated milestone, aimed at ensuring the administrative capacity of the 
Implementing Body and guaranteeing the administrative capacity for the audit body. 

The chapter on audit and control gives a satisfactory description of the arrangements for 
the  implementation  and  control  of  the  plan  in  Ireland,  subject  to  the  achievement  of  two 
milestones. The chapter is detailed and gives the Commission reasonable assurance that there is 
a sound structure in place to monitor the allocated funds from the RRF. 

Conclusion of the assessment under criterion 2.10 in Annex V to the RRF Regulation 

The arrangements proposed by Ireland in the recovery and resilience plan to prevent, detect and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 

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Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union programmes, are assessed to be adequate, provided that the pending issues are addressed 
in  due  time,  through  the  dedicated  milestones.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.10 of Annex V to the RRF Regulation. 

4.11. 

Coherence 

Mutually reinforcing measures  

The  reforms  and  investments  in  each  of  the  individual  components  are  coherent  and 
targeted to the same objectives. The plan consists of three components, each of which contains 
a  set  of  measures  that  are  centred  on  a  clear  objective:  (i)  the  green  transition  for  the  first 
component,  (ii)  the  digital  transition  for  the  second  component,  and  (iii)  social  and  economic 
recovery and job creation for the third component. By way of illustration, the second component 
covers  measures  supporting  the  digital  transition  and  includes  a  set  of  measures  that  aim  at 
digitising  both  government  and  businesses,  as  well  as  improving  the  digital  skills  of  the 
population, thus aiming at bridging the digital divide. 

The  measures  in  each  of  the  individual  components  are  mutually  reinforcing,  as 
investments  are  accompanied  by  reforms  that  aim  to  resolve  structural  underlying 
challenges. The investments in the green component are reinforced by two key reforms. The first 
reform,  the  Climate  Action  and  Low  Carbon  Development  Bill,  strengthens  the  governance  of 
the State’s climate objectives. The second reform, the carbon tax increase, provides an incentive 
for  decarbonisation  with  annual  rate  increases.  In  the  digital  component,  the  investments  in 
broadband  connectivity  and  ICT  infrastructure  for  schools  are  reinforced  by  reform  measures 
that aim to strengthen digital education and skills in general. In the social and economic recovery 
and job creation component, the measures are primarily mutually reinforcing in supporting social 
inclusion. 

Complementarity of measures  

The components pursue complementary aims. In general, the components are aligned with the 
Irish Government’s broader recovery efforts.  The plan also  has a strong forward-looking focus 
on  the  green  and  digital  transitions  that  is  reflected  in  all  three  components  –  including  in  the 
third component (Social and economic recovery and job creation). The third component, by way 
of  illustration,  includes  measures  that  are  expected  to  support  the  development  of  green  and 
digital skills in the workforce. As such, the components pursue complementary aims, both in the 
shorter run to support the broader recovery effort and in the longer run to facilitate the green and 
digital transitions.  

Measures  in  different  components  are  expected  to  complement  one  another.  By  way  of 
illustration,  the  SOLAS  recovery  skills  response  programme  (component  3)  aims  at  offering 
skills  training in  support of national  retrofitting targets,  while the measure on derisking  a low-
cost residential retrofit loan scheme (component 1) aims to offer loan guarantees to incentivise 

71 

 
 
indirect 
retrofitting  for  energy  efficiency  upgrades.  A  second  example 
complementarity  of  the  SME  test  (component  3)  and  the  programme  to  drive  digital 
transformation of enterprise, in particular SMEs (component 2), both of which may help address 
the  productivity  challenge  faced  by  Irish  firms.  A  third  example  are  the  eHealth  investments 
(component 2) and healthcare reforms (component 3), which share the aim to improve the cost-
effectiveness and accessibility of healthcare in Ireland.  

the  more 

is 

There  is  an  adequate  balance  between  investments  in  different  territories.  A  few  of  the 
investments  are territorially  focused outside the  Dublin  and Cork areas and can be expected to 
reduce  disparities  between  different  territories.  In  order  to  promote  wider  coherence  across 
instruments, notably with the European cohesion policy funds, a balanced territorial allocation of 
resources is encouraged. 

Conclusion of the assessment under criterion 2.11 in Annex V to the RRF Regulation 

Taking into consideration the qualitative assessment of all components of Ireland’s recovery and 
resilience  plan,  their  individual  weight  (importance,  relevance,  financial  allocation)  and  their 
interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a high extent, represent coherent actions. This would warrant a rating of A 
under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

72 

 
 
 
 
ANNEX: CLIMATE TRACKING AND DIGITAL TAGGING TABLE28  

Int. Field = intervention field 
Coeff. = Coefficient for the calculation of support to climate change objectives and to digital transition, on the basis 
of Annex VI and Annex VII to the RRF Regulation 

Measure ID 

(Sub-)Measure name 

1.1 

1.2 

1.2 

1.3 

1.4 

1.5 - 1 

1.5 - 2 

1.6 

2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

Investment: 1.1 Derisking a low cost 
residential retrofit loan scheme 

Investment: 1.2 Accelerate the 
decarbonisation of the enterprise sector 

Investment: 1.2 Accelerate the 
decarbonisation of the enterprise sector 

Investment: 1.3 Public sector buildings’ 
energy retrofit programme 

Investment: 1.4 Enable future electrification 
through targeted investment in Cork 
commuter rail 
Investment: 1.5 National grand challenge 
programme - green 

Investment: 1.5 National grand challenge 
programme - digital 

Investment: 1.6 Enhanced rehabilitation of 
peatlands 

Investment: 2.1 Development of a shared 
Government data centre 

Investment: 2.2 Programme to drive the digital 
transformation of enterprise in Ireland 

Investment: 2.3 Programme to provide digital 
infrastructure and funding to schools 

Investment: 2.4 Provision of an online 
response option for the census of population 

Investment: 2.5 Using 5G technologies to 
drive a greener more innovative Ireland 

Investment: 2.6 Suite of eHealth projects 

Budget 
(EUR  
m) 

30 

Climate 

Digital 

Int.  
Field 
025bis 

Coeff. 
% 
100% 

Int. 
Field 

Coeff. 
% 

30 

047bis 

40% 

25 

047 

40% 

60 

026bis 

100% 

164 

069bis 

100% 

022 

100% 

50 

21 

108 

050 

40% 

009bis 

100% 

39 

055bis 

40% 

055bis 

100% 

85 

64 

10 

19 

75 

010 

100% 

012 

100% 

011 

100% 

054bis 

100% 

095 

100% 

28 While the total cost of the Ireland’s recovery and resilience plan exceeds the total allocation of non-repayable financial support 
to  Ireland,  Ireland  will  ensure  that  all  spending  related  to  the  measures  mentioned  in  this  table  as  contributing  to  climate 
objectives are fully financed by the funds from the Recovery and Resilience Facility. 

73 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Measure ID 

(Sub-)Measure name 

3.2 

Investment: 3.2 SOLAS recovery skills 
response programme - green skills action 
programme  

Budget 
(EUR  
m) 

29 

Climate 

Digital 

Int.  
Field 

Coeff. 
% 
01  100% 

Int. 
Field 

Coeff. 
% 

74