COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Ireland and delivering a Council opinion on the 2022 Stability Programme of Ireland
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Ireland, circular economy, economic recovery, economic reform, energy policy, improvement of housing, public finance, renewable energy, stability pact, stability programme, waste management

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 615 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report - Ireland Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Ireland and delivering a Council opinion on the 2022 Stability Programme of Ireland {COM(2022) 615 final} - {SWD(2022) 640 final}  
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

The Irish economy has weathered 
the pandemic well 

Ireland’s  economy  performed  very  well 
prior  to  the  COVID-19  crisis.  The  country 
recorded  a  strong  recovery  following  the 
global financial crisis, with real GDP expanding 
by  9.8%  per  year  on  average  from  2014  to 
2019.  In  2019,  Ireland’s  per  capita  GDP  was 
231%  of  the  EU  average,  the  second  highest 
in  the  EU.  Its  economic  performance  was 
therefore strong as it entered the pandemic. 

of 

saw 

fields 

information 

Ireland was the only EU country to avoid 
a  recession  during  the  pandemic,  as  the 
strong  performance  of  multinationals 
bolstered  economic  activity.  Ireland  hosts 
the  headquarters  of  several  very 
large 
considerable 
multinationals,  which 
business  growth  during  the  pandemic.  Their 
exports  – in  particular  those  for  companies in 
the 
and 
telecommunication,  and  pharmaceuticals  – 
were a driving force behind Ireland’s economic 
expansion  in  2020  and  2021.  During  that 
period, domestic companies did not match the 
performance  of  multinationals.  To  illustrate 
the  dual  nature  of  Ireland’s  economy,  gross 
value  added 
in  sectors  dominated  by 
multinationals grew by 23.1% in 2020, while it 
declined by 8.7% in other sectors. This is also 
reflected in strong disparities between regions 
in  and 
hosting  multinationals 
(the  areas 
regions 
around  Dublin  and  Cork)  and 
dominated by Irish-owned small and medium-
sized companies (1). Overall, Ireland’s real GDP 
grew  by  5.9%  in  2020  and  again  by  a 
in  2021.  Excluding 
remarkable  13.5% 
multinationals, which account for a  significant 
share  of  Ireland’s  GDP  and  growth,  Ireland’s 

(1)  In the latest available figures, for 2019, the gross value 
added per person in Dublin was more than four times 
that in the Midlands. 

2 

per  capita  modified  gross  national  income 
(GNI*) (2) was still 140% of EU per capita GDP 
in  2020.  The  macroeconomic  outlook  remains 
positive,  with  real  GDP  growth  projected  at 
5.4% in 2022 and 4.4% in 2023. 

but 

fairly  well, 

labour  market  weathered 

the 
The 
pandemic 
labour 
shortages  are  already  re-emerging.  While 
the total number of hours worked fell by more 
than  9%  in  2020,  the  impact  of  reduced 
activity  on  employees (3)  and  companies  was 
cushioned by government support schemes. In 
March  2022  the  unemployment  rate  stood  at 
5.5%.  People  working  in  sectors  requiring 
physical contact (e.g. construction, hospitality), 
and  those  with  jobs  requiring  only  low  skills 
were  most  severely  affected  by  job  losses 
during  the  pandemic.  However,  the  reopening 
of  the  economy  in  early  2022 (4)  saw  a  rapid 
increase in employment and a sharp decline in 
reliance  on  employment-related 
support 
schemes.  At  the  same  time,  the  shift  to 
remote  work  has  increased  the  number  of 
women  working  or  looking  for  work,  and their 
participation  in  the  labour  force  reached  a 
record  level  of  72%  (see  Graph  1.1).  Job 
creation  is  set  to  continue  in  2022  as  the 
economy  grows.  Labour  shortages  related  to 
both  high-skilled  professions  and  low-skilled 
jobs in services and construction have already 
emerged  and  wages  for  these  workers  have 
started  increasing.  At  the  same  time,  the 
minimum  wage  of  EUR  10.50  per  hour  still 

(2)  GNI* reflects the income standards of Irish residents 

more accurately than GDP.  

(3)  European Commission (2021) Quarterly Report on the 

Euro Area (QREA), Vol. 20, No. 4, Chapter I. 

(4)  After almost 2 years of severe restrictions to contain 
the COVID-19 pandemic, and with Ireland having had 
higher levels of pandemic restrictions than most other 
EU Member States, in January 2022 the government 
declared the pandemic emergency phase over and 
confirmed that most pandemic restriction measures 
would be lifted. 

 
                                                 
                                                 
 
and 

social 

exclusion, 

falls  short  of  the  minimum  living  wage (5)  of 
EUR 12.90 per hour. Some vulnerable groups – 
especially lone parent households and persons 
with  disabilities  –  are  at  a  higher  risk  of 
often 
poverty 
exacerbated by difficulties to participate in the 
labour  market  and  find  employment.  It  is 
particularly 
integrate 
important  to  quickly 
groups  with  lower  employment  rates  into  the 
workforce,  especially  inactive  women,  low-
skilled  people,  lone  parents  and  persons  with 
disabilities (see  also  Annex  12  on 
the 
European Pillar of Social Rights). 

Graph 1.1: Female Participation Rate 

Source: Eurostat 

Russia’s invasion of Ukraine will 
have a mostly indirect 
macroeconomic impact 

As  the  Irish  economy  has  both  very 
limited  trade  and  limited  direct  financial 
links  with  Russia,  any  negative  impact  is 
primarily  expected  from  second-round, 
indirect effects. Russia accounts for 0.4% of 
Irish  goods  exports  and  0.6%  of  goods 
in  bio-pharma  and 
imports,  concentrated 
Regarding 
respectively. 
fertilisers, 
multinationals  headquartered  in  Ireland,  the 
biggest  impact  from  Russia’s  invasion  of 
Ukraine is felt by companies leasing planes, as 

(5)  As calculated by civil society using the Minimum 

Essential Standard of Living approach. 

will 

80 000-100 000, 

their planes in Russia have been appropriated. 
However,  this  affects  no  more  than  5%  of 
their collective fleet size. Regarding the energy 
sector,  Ireland  depends  almost  exclusively  on 
energy  imports  from  the  United  Kingdom. 
Despite  these  very  limited  direct  links  to 
Russia,  Ireland  is  set  to  indirectly  experience 
some  slowdown 
in  growth  through  other 
European  economies,  with  which  it  trades 
extensively,  as  well  as  rising  global  energy 
prices and supply shortages for certain goods. 
The potential inflow of people fleeing Ukraine, 
broadly  estimated  by  the  Irish  authorities  at 
around 
require 
additional social spending but may also have a 
positive  impact  on  the  tight  Irish  labour 
market,  given  the  right  to  work  for  displaced 
persons  from  Ukraine.  The 
Irish  financial 
sector  has  significant  exposures  to  Russia, 
estimated  at  around  EUR  49  billion.  However, 
EUR  37  billion  of  this  is  held  by  special 
purpose 
Russian 
companies  or  banks,  which  have  very  limited 
or  no  direct  links  to  the  Irish  economy. 
Investment  funds  based  in  Ireland  hold  EUR 
11.5 billion of Russian exposures – accounting 
for  0.3%  of  their  total  assets  –  of  which  EUR 
5.1 billion are Russian government bonds. Irish 
domestic banks have no substantial direct ties 
with Russia, but could be affected more by the 
aforementioned second-round macroeconomic 
effects and through financial linkages. 

operated 

entities 

by 

As  in  other  EU  Member  States,  rising 
energy  prices  have  fuelled 
inflation, 
which  the  invasion  risks  exacerbating. 
Higher  oil  and  gas  prices,  as  well  as  supply 
bottlenecks for goods or their components, led 
to  increasing  inflation  in  2021.  In  February 
2022,  the  harmonised  index  for  consumer 
prices was 5.7% higher than a year before, in 
line  with  the  euro  area  average  of  5.8%. 
Inflation is set  to continue increasing in 2022 
amid  persistently  high  energy  prices  and 
supply  bottlenecks,  while  rising  wages  may 
start adding to price pressures. Given the large 
share  of  crops  and  other  food  products  being 
produced by Ukraine and Russia, food prices in 
Europe  have  already 
increased.  Higher 
inflation,  driven  primarily  by  rising  energy 
costs, puts a heavier burden on disadvantaged 
lower-income,  rural  and 
groups  (including 
older  households),  because 
their  energy-
related  expenditure  typically  represents  a 

3 

56586062646668707274EU27Ireland% 
   
                                                 
higher  share  of  their  overall  expenditure. 
Inflation  is  projected  to  amount  to  6.1%  in 
2022 and decline to 3.1% in 2023.  

Public finances prove sustainable 
amid challenges 

Ireland’s  public  finances  were  in  a  good 
starting position to withstand the impact 
of  the  COVID-19  pandemic.  In  2019,  the 
government reached a surplus in its accounts, 
continuing  a  trend  of  fiscal  consolidation  that 
started  in  2011.  The  deficit  reduction  over 
these 8 years was principally driven by strong 
economic  activity.  This  dynamism  produced 
large average annual increases in government 
revenues, which were matched only by modest 
expenditure  growth.  As  a  consequence,  in 
2019,  the  debt-to-GDP  ratio  fell  to  a  10-year 
low  of  57.2%,  reflecting  also  strong  nominal 
GDP  growth  and  a  decrease  of 
interest 
payments.  Nonetheless,  in  that  same  year, 
debt-to-GNI*,  a  more  suitable  repayment 
indicator for Ireland, was as high as 95%. 

these 

included  wage 

The pandemic put the continued reduction 
in  the  debt  ratio  on  hold,  but  avoided  a 
sizeable  increase.  In  2020  and  2021,  the 
Irish  Government  took  timely  measures  to 
shore  up  the  economy.  On  the  expenditure 
side, 
subsidies, 
unemployment payments, as well as increased 
support  to  the  health  service,  the  education 
sector  and  public  transport.  Certain  tax  items 
were  barely  affected  by 
the  domestic 
recession  (-3.5%  in  GNI*  in  2020):  taxes  on 
income  were  stable,  and  corporation  taxes 
increased  by  almost  10%  year-on-year.  In 
2021,  a  robust  performance  in  revenues  on 
the  back  of  strong  GDP growth  brought down 
the deficit to 1.9% of GDP. While the debt-to-
GDP  ratio  increased  modestly  by  the  end  of 
2020, 
its  pre-
pandemic  value  in  2021.  In  terms  of  GNI*, 
however, the debt ratio’s decline is slower. 

it  dipped  already  below 

finances 

show  no 
Ireland’s  public 
challenges. 
sustainability 
short-term 
Strong  economic  growth  is  expected  to  help 
narrow  the  2021  deficit  of  1.9%  to  0.5%  in 

4 

2022 and the budget balance to turn again to 
a surplus of 0.4% in 2023 (see Graph 1.2 and 
Annex 19). Risks related to a potential increase 
in interest rates are low because only a small 
amount of Irish public debt has to be repaid in 
the short term. Moreover, the Irish Government 
has  committed 
to  capping  overall  core 
expenditure  growth  at  a  rate  in  line  with  the 
trend  growth  of  the  economy  (estimated  by 
the  authorities  at  5%).  On  the  other  hand, 
future  potential  rises  in  capital  expenditure 
related  to  increasing  the  housing  stock  and 
transitioning  to  a  climate  neutral  economy 
could  test  this  commitment.  Furthermore, 
future  changes  to  the  international  corporate 
tax  framework  –  e.g.  the  re-allocation  of 
across 
multinational 
different  states,  and  the  increase  in  the  tax 
rate  for  very  large  companies  from  12.5%  to 
15% – might affect corporate tax revenues as 
of 2023. 

companies’ 

profits 

Graph 1.2: Government Accounts 

Source: European Commission. GNI* projections from 
Central Bank of Ireland 

Structural challenges resurface 

Looking beyond the pandemic, health and 
long-term  care  would  need  structural 
reforms.  Although  significant 
investments 
were  made  to  recruit  healthcare  staff  during 
the  COVID-19  pandemic,  Ireland  still  faces  a 
shortage  of  doctors  and  nurses.  In  addition, 
Ireland  remains  the  only  country  in  western 
Europe  without  universal  coverage  for  a  core 

30354045505560Expenditure (excl. other capital expenditure)Revenue% of total GNI* 
   
internationally-oriented 
Ireland’s 
economy  faces  anti-money 
laundering 
and  aggressive  tax  planning  challenges. 
Significant inflows of foreign direct investment 
require effective supervision and enforcement 
of  the  anti-money 
laundering  framework, 
particularly  for  professionals  providing  trust 
and  company  services.  At  the  same  time, 
significant  outbound  royalty  and  dividend 
payments  over  recent  years  indicate  that 
companies  may  use  Ireland’s  tax  rules  for 
aggressive tax planning purposes. 

While  Ireland  performs  well  on  most  of 
the  UN’s  Sustainable  Development  Goals 
(SDGs),  weaknesses  related  to  green 
goals  remain  (see  also  Annex  1).  On  almost 
all  SDGs,  Ireland  performs  above  the  EU 
average  and  continues  to  make  progress  (e.g. 
is  both  making  progress  and 
Ireland 
performing  above  the  EU  average  on:  (i) 
reduction  of  inequalities;  (ii)  education;  (iii) 
peace, justice and institutions; and (iv) health). 
Ireland’s  performance  has  slowed  down  on  a 
limited  number  of  SDGs.  The  water  and 
sanitation  system  and  the  promotion  of 
sustainable  use  of  terrestrial  ecosystems  are 
policy  areas  where  Ireland  is  losing  ground, 
despite  remaining  above  the  EU  average.  In 
addition, 
climate 
objectives,  waste  management  (‘sustainable 
consumption  and  production  patterns’)  and 
innovation  policy,  Ireland  remains  below  the 
EU  average  in  these  areas.  On  climate  action 
in  particular,  net  greenhouse  gas  emissions 
per capita remain 80% above the EU average 
(2020),  which  will  require  significant  action 
over this decade. 

progress 

despite 

on 

set  of  health  services,  such  as  primary  care 
(see  Annex  14).  Most  of  the  population  is  not 
covered  by  a  medical  card  and  must  pay  the 
full  cost  of  doctor  visits  and  outpatient 
prescriptions  up  to  a  certain  threshold.  The 
ageing  of  the  population  will  increasingly  put 
the 
long-term  care  system  under 
considerable pressure.  

Irish 

the 

same 

House  and  rental  prices  continue  to 
accelerate due to persistent shortfalls in 
housing  supply.  At 
time, 
Commission  models  based  on  a  long-term 
average  of  house  prices  have  yet  to  identify 
signs  of  overvaluation.  In  the  short  term,  the 
gap  between  housing  supply  and  demand  is 
expected  to  remain  wide  (see  Annex  17). 
Worsening housing affordability, rising rents in 
2021  and  pandemic-induced  delays 
in 
construction  activity  have  exacerbated  the 
problem. Rent increases and insufficient social 
and affordable housing are still a concern, and 
have created the conditions for a high number 
of homeless people by historical standards.  

in 

research 

investment 

While  Ireland  is  an  advanced  economy, 
there  are  some  factors  holding  back 
productivity  in  domestic  sectors,  such  as 
low 
and 
development  (R&D),  skills  shortages,  and 
lagging  digitalisation,  including  in  the 
justice  system.  R&D  investment  is  relatively 
low  compared  to  other  Member  States  and  is 
not  at  the  expected  level  for  an  economy  at 
Ireland’s stage of development (see Annex 9). 
Skills shortages have been identified in several 
sectors,  including  IT,  science  and  engineering, 
and  health (6).  According  to  the  2022  Digital 
Economy and Society Index (DESI), 70% of the 
population  have  at  least  basic  digital  skills, 
which  is  above  the  EU  average  of  54%  (see 
Annex  8).  On  digitalising  its  justice  system, 
Ireland scores below the EU average in several 
(see  Annex  11).  Furthermore, 
dimensions 
Ireland’s 
involves  a 
comparatively 
slow  process  and  yields 
relatively low recovery rates. 

insolvency  framework 

(6)  National Skills Bulletin (2021) Skills and Labour Market 
Research Unit in SOLAS on behalf of the National Skills 
Council; 
https://www.solas.ie/f/70398/x/fcee571661/solas_nsb_r
eport.pdf 

5 

 
                                                 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

around 

reforms) 

transformation;  and 

The  Irish  recovery  and  resilience  plan 
(RRP)  includes  measures  to  support  the 
green  and  digital  transition,  as  well  as 
the social and economic recovery. Ireland’s 
RRP  amounts  to  EUR 989 million,  which  is 
equivalent  to  0.3%  of  2019  GDP (7).  The  plan 
comprises  25  measures  (16  investments  and 
9 
three 
structured 
components: (i) advancing the green transition; 
(ii)  accelerating and expanding digital reforms 
and 
(iii)  social  and 
economic  recovery  and 
job  creation  (see 
Graphs 2.1 and 2.2 and Annex 2). Measures in 
the  plan  have  the  potential  to  contribute  to 
addressing  a  range  of  challenges (8)  that  are 
also  relevant  to  all  four  dimensions  of 
competitive  sustainability.  Nonetheless,  given 
the  modest  financial  contribution  and  the 
entrenched  nature  of  some  of  the  challenges, 
the  Irish  RRP  cannot  be  expected  to  fully 
resolve all associated needs during its lifetime. 
During 
is 
important  to  ensure  the  involvement  of  all 
authorities  and 
concerned, 
including social partners. 

implementation  stage, 

stakeholders 

the 

it 

Graph 2.2: Investment spending in the RRP per 
component 

Source: European Commission 

environmental 

The plan includes a component dedicated 
Ireland  decarbonise  and 
to  helping 
address 
challenges. 
Measures in this component directly help meet 
the  EU’s  2030  climate  targets  and  2050 
climate  neutrality  objective.  Reforms  and 
investments  in  the  plan  are  also  expected  to 
meet 
for 
environmental  policy  and  biodiversity.  With  a 
focus  on  energy  efficiency, 
significant 
sustainable  transport,  preserving  biodiversity 
and  ecosystems,  and  promoting  green  skills, 
the plan will help Ireland achieve its ambitious 
decarbonisation objectives.  

national 

targets 

and 

EU 

in 

support 

address 

businesses 

Several RRP measures have the potential 
productivity-related 
to 
challenges.  The  RRP’s  second  component 
focuses on contributing to the digital transition 
of  the  economy  and  society.  The  measures 
their 
included 
digitalisation  efforts,  address  the  risk  of  the 
digital  divide 
in  the  education 
sector),  strengthen  digital  skills,  and  help 
develop  the  digital  infrastructure  and  deliver 
digital public services. In addition, the planned 
SME 
remove  unnecessary 
regulatory  obstacles  that  small  and  medium-
sized  enterprises  (SMEs)  are  facing, by  asking 
policy makers to consider the potential burden 
any  proposed  regulations or  legislation places 
on SMEs. 

test  aims 

(including 

to 

Graph 2.1: Number of reforms and investments 
in the RRP per component 

Source: European Commission 

(7)  The size of the RRP is slightly above the maximum 
financial contribution allocated to Ireland under the 
Recovery and Resilience Facility of EUR 988 966 534. 

(8)  See also Commission staff working document: Analysis 
of the recovery and resilience plan of Ireland, Section 
4.2, pp. 35-43. 

6 

271663ReformsInvestmentsAdvancing the green transitionAccelerating and expanding digital reforms and transformationSocial and economic recovery and job creation52.3%29.4%18.3%Component 1 - Advancing thegreen transitionComponent 2 - Accelerating andexpanding digital reforms andtransformationComponent 3 - Social andeconomic recovery and jobcreation 
 
     
 
                                                 
     
 
tackle  aggressive 
the  plan  also 

strengthen anti-money laundering supervision. 
tax  planning 
To  help 
to 
strategies, 
commits 
introducing  new 
to 
legislation  applying 
outbound  payments  to  prevent  double  non-
taxation,  which  is  due  to  take  effect  from 
January  2024  at  the  latest.  In  addition,  the 
plan 
to 
supplementary  pensions  included  in  Ireland’s 
pensions roadmap. 

includes  measures 

related 

and 

increase 

includes 
The  RRP’s  third  component 
significant 
skill-related 
social 
measures (9).  The  SOLAS (10)  recovery  skills 
response  programme  seeks  to  equip  workers 
with  the  skills  to  shift  into  growth  sectors  of 
the  economy,  such  as  IT,  green  construction 
and  climate  change  mitigation.  The  work 
placement  experience  programme  aims  to 
provide  those  unemployed  for  6  months  or 
more with work experience, as well as training, 
to 
their  employability.  To  help 
address  the  shortages  in  housing  supply,  the 
Ireland’s  Land  Development 
plan  entrusts 
Agency  with  developing  and  regenerating 
public  land  in  order  to  provide  housing.  The 
Agency  is  also  entrusted  with  developing  and 
managing housing, including a quota for social 
housing.  The  plan  also  commits  to  launching 
several 
housing 
to 
affordability  for  low  and  medium  income 
households.  In  healthcare,  the  plan  includes  a 
set  of 
the 
improve 
healthcare 
cost-effectiveness, 
accessibility, and resilience. 

that  may 

schemes 

system’s 

increase 

reforms 

this 

component 

Furthermore, 
also 
includes  several  reforms  that  have  the 
potential to contribute to macroeconomic 
stability and improve the quality of public 
institutions.  A  set  of  reforms  is  expected  to 

Box 1: 

Key deliverables under the RRP in 2022 and 2023 

  Entry into force of the Climate Action and Low Carbon Development (Amendment) Bill 2021, 
which provides for the achievement of emissions reduction targets for 2030 as well as the 
climate neutrality objective by 2050. 

  Establishment of the financial agreement related to the residential retrofit loan scheme. 

  Start of rehabilitation work for at least 19 peatland bogs. 

  Connection of at least 990 primary schools to high-speed broadband networks. 

  Raising the number of graduates with high-level ICT skills. 

  Application  of  the  SME  test  (which  asks  policy  makers  to  consider  the  potential  burden 
proposed regulations or legislation place on SMEs) by at least five government departments. 

  Expansion of the Anti-Money Laundering Compliance Unit’s enforcement toolkit with financial 

sanctions. 

(9)  Also see the RRF scoreboard and social scoreboard 
accompanying the European Pillar of Social Rights. 

(10)  SOLAS is the State agency that funds, coordinates, and 
monitors the provision of further education and training 
in Ireland. 

7 

 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
FURTHER PRIORITIES AHEAD 
FURTHER PRIORITIES AHEAD 

Beyond  the  challenges  addressed  by  the 
RRP,  as  outlined  above,  Ireland  faces 
additional  challenges  not  sufficiently 
covered in the plan. A number of entrenched 
challenges  are  unlikely  to  be  fully  resolvable 
through  the  RRP  alone.  Therefore,  challenges 
remain  in  the  areas  of  (i)  climate  action,  (ii) 
waste prevention, (iii) the circular economy, (iv) 
waste  water  treatment,  (v)  pensions,  (vi)  tax 
base broadening, (vii) aggressive tax planning, 
(viii)  anti-money  laundering,  (ix)  housing,  (x) 
health  and 
regional 
long-term  care, 
disparities,  (xii)  R&D,  (xiii)  digitalisation,  (xiv) 
the  insolvency  framework,  and  (xv)  skills. 
Addressing  these  will  also  help  Ireland  make 
further progress in achieving the SDGs related 
to such challenges, for example climate action 
responsible  consumption  and 
(SDG  13), 
production 
(SDG  12),  clean  water  and 
sanitation  (SDG  6)  and  industry,  innovation, 
and infrastructure (SDG 9). 

(xi) 

Accelerating the green transition, 
also in light of Russia’s invasion of 
Ukraine 

While Ireland has no exposure to Russian 
crude  oil  and  gas  imports,  it  depends 
significantly  on  these  energy  sources  for 
its  energy  supply.  In  2020,  oil  and  gas 
covered  almost  80%  of 
Ireland’s  energy 
consumption,  of  which  45%  for  oil  and  33% 
for  gas.  Less  than  a  third  of  gas  consumed 
was produced by Ireland, due to the depletion 
of  the  Corrib  gas  field.  All  gas  imports  come 
from the United Kingdom.  

A  double  gas  pipeline  between  Scotland  and 
Ireland  entered  into  service  in  2002,  while 
another  gas  pipeline  connecting  Ireland  to 
Northern Ireland entered into service in 2007. 
In  January  2021,  the  government  indicated 
that  the  project  for  Port  of  Cork’s  liquefied 
natural  gas  (LNG)  terminal  would  not  go 
ahead.  After  several  challenges  by  local  and 
environmental  groups, 
the  Shannon  LNG 
terminal had its planning approval rejected by 
the  High  Court  in  2020,  but  announced  in 
August  2021  that  it  would  submit  a  new 
application.  In  April  2022,  Ireland  published 
the  National  Energy  Security  Framework.  It 
aims at ensuring security of supply in the near 
term,  reducing  the  country’s  dependency  on 
fuels  and  compensating 
imported 
households  and  businesses  exposed  to  higher 
energy costs. 

fossil 

Due  to  the  high  share  of  fossil  fuels  in 
the  energy  mix,  Ireland  did  not  achieve 
some  of  its  EU  2020  climate  and  energy 
targets.  Ireland  has  fallen  short  of  its  2020 
energy  efficiency  target,  while  it  met  its 
renewable  energy  target  via  the  purchase  of 
statistical  transfers (11).  As  of  2019,  Ireland 
had reduced its domestic effort-sharing sector 
emissions  by  only  4%  compared  to  2005, 
against  the  effort  sharing  target  of  20%  for 
2020. Nevertheless, Ireland did comply with its 
2019 target under the Effort Sharing Decision 
international  project 
through  the  use  of 
credits. 

(11)  Ireland's renewable energy share was below its binding 
national target of 16% in 2020. In order to comply with 
its EU obligations, it purchased statistical transfers from 
Denmark and Estonia (who overachieved their own 
target). 

8 

 
 
 
 
 
                                                 
 
Graph 3.1: Greenhouse gas emissions by sector 
and total projections (WEM and WAM*) 

technologies’ 
technologies. 

to 

renewable  and 

flexible 

for 

sectoral 

instance 

limiting 

targets  and 

is  a 
Ireland’s  climate  action  plan 
its 
promising  step  towards 
exposure  to  oil  and  gas,  but  its  concrete 
impact  hinges  on  planned  measures  and 
goals  being  implemented  in  good  time. 
The entry into force of the Climate Action and 
Low  Carbon  Development  (Amendment)  Act 
2021 in July 2021, which is part of the RRP, is 
a turning point for climate action in Ireland. It 
carbon 
introduces 
budgets.  While 
the  deep 
retrofitting of buildings is going through at an 
accelerated pace (14), the plan identifies broad 
objectives that are yet to be backed by precise 
measures that will enable their delivery. As an 
example, 
the  significant  carbon 
footprint  of  the  agricultural  sector  has  yet  to 
be  sufficiently  addressed, 
the 
promising steps taken by the Food vision 2030 
initiative (15).  The  plan  also  only  partially 
identifies  the  mitigation  potential  of  specific 
measures  (e.g.  the  20%  of  work  in  the  public 
sector undertaken as remote work). Additional 
information is expected to be specified by the 
annual  updates  to  the  climate  action  plan,  of 
which specific iterations in 2021 and 2025 are 
included in the Irish RRP.  

in  spite 

reducing 

Achieving  Ireland’s  high  ambitions  for 
deploying  renewable  energy  requires 
addressing its systemic issues. Ireland sets 
out  a  new,  increased  renewable  electricity 
target of 80% by 2030, which roughly doubles 
the  share  within  the  next  decade.  This 
ambition  is  set  in  a  context  of  structural 
vulnerabilities  related  to  growing  electricity 
demand,  declining  availability  of  existing 
generators,  limited  interconnections  and  still 
reduced 
absorb 
intermittent  sources  of  energy.  Aside  from 

capacities 

storage 

to 

WEM - With Existing Measures 
WAM - With Additional Measures 
*WAM projections based on measures from the Climate 
Action Plan 2019, which does not reflect the 51% target 
for 2030 as legislated in 2021. 
Land use, land-use change, and forestry are excluded. 
Source: Source: European Environment Agency 

in 

to 

and 

reduce 

remain 

required 

trajectory 

reducing 

Ireland  needs  to  make  major  progress 
its  climate 
this  decade  on  meeting 
objectives (12) 
its 
dependence  on  oil  and  gas  (see  Annex  5). 
The 
total 
greenhouse  gas  emissions  in  line  with  the 
nationally-set 2030 target is steep (see Graph 
terms  of 
3.1).  Challenges 
investments  required,  availability  of  skilled 
workers  and  removal  of  regulatory  barriers. 
According to the 2021 climate action plan (13), 
achieving  Ireland’s  ambitions  to  reduce  total 
greenhouse  gas  emissions  by  51%  by  2030 
compared 
require 
significant  investments.  The  plan  estimates 
that additional investment of EUR 45 billion is 
needed  by  2030  compared  to  a  ‘no-climate-
action’  scenario,  and  that  an  extra  EUR  80 
billion  would  need  to  be  reallocated  from 
investments  in  ‘incumbent  and  fossil  fuel 

levels  will 

to  2018 

(12)  European Commission green resilience dashboard 

https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en#heatmap  

(13)  Department of the Environment, Climate and 
Communications (2021) climate action plan 
https://www.gov.ie/en/publication/6223e-climate-
action-plan-2021/  

(14)  Transition to a one-Stop-Shop-based retrofit delivery 

model, Energy Efficiency Obligation Scheme is expected 
to come into operation in 2022, residential retrofit loan 
guarantee developed under Ireland’s National Recovery 
and Resilience Plan 

(15)  For instance, the Food vision 2030 does not set target 
yet for biogenic methane. This target will be updated 
when specific sectoral targets are agreed under the 
framework of the Climate Action and Low Carbon 
Development (Amendment) Bill 2021 

9 

020406080International aviationWaste managementOther energy usesTransportManufacturing and industryEnergy supplyAgricultureTotal (incl. International aviation, WEM)Total (incl. International aviation, WAM)51% legislated reduction vs. 2018Million tonnes CO2equivalent 
  
                                                 
                                                 
quickly  accelerating  renewables  deployment, 
e.g.  by  frontloading  auction  schedules,  Ireland 
would have to mobilise major investments for 
rapidly upgrading of the power grid, deploying 
a  large  amount  of  storage  capacity,  and 
prioritise the deep retrofitting of buildings. The 
transmission system also requires upgrades to 
cope  with  the  expected  development  of 
electric  vehicles  and  heat  pumps.  Quickly 
completing  the  Celtic  Interconnector  project, 
the  electricity  interconnection  project  between 
Ireland  and  France,  for  which  construction  is 
set  to  start  in  2022,  will  also  be  key  to 
ensuring the country’s energy supply. 

Removing  bottlenecks  to  the  above 
for 
investments  will  be  necessary 
reducing  Ireland’s  dependence  on  fossil 
fuels.  Challenges  remain  with  the  planning 
and  permitting  system,  particularly  the  long 
timeframe  in  granting  planning  permission, 
which  is  also  linked  to  the  appeal  procedures 
for planning applications. Advancing reforms in 
these  areas  would  foster  greater  roll-out  of 
renewables,  thus  helping  diversify  the  energy 
mix.  The  Irish  government  introduced  a  new 
Maritime Area Consent Regime in March 2022 
that  is  expected  to  simplify,  streamline  and 
accelerate  the  permitting  regime  for  offshore 
wind  facilities  through  an  early  identification 
of  the  most  viable  projects.  The  entry  into 
force of a new supervisory body, expected for 
2023, will be an essential step in this reform.  

to 

decarbonise 

The  planned  investments  in  sustainable 
mobility  included  in  the  RRP  will  not  be 
sufficient 
public 
transport. Oil accounts for more than 45% of 
the  transport  sector’s  energy  mix,  making 
Ireland  the  fifth  worst  performing  Member 
Sate.  In  this  context,  the  Climate  Action  Plan 
sets  ambitious 
to  decarbonise 
targets 
transport.  This  includes  the  provision  of  an 
additional  500 000  daily  public  transport  and 
active travel journeys, an increase of the fleet 
of  electric  vehicles  and  low  emitting  vehicles 
on  the  road  to  945 000  by  2030,  and  the 
expansion  of  the  electrified  rail  network.  The 
latter  should  in  particular  include  connecting 
airports  by  rail  to  the  TEN-T  network  and 
promoting  country-wide  intensified  use  of  rail 
for both passengers and freight. 

tapping  new 

Effective  and  well-coordinated  research 
and  innovation  instruments  are  critical 
for 
renewable  energy 
sources.  Beyond  the  uptake  of  existing 
technologies, energy efficient technologies and 
energy 
can 
contribute  to  the  energy  transition.  Suitable 
financial 
coupled  with  well-
articulated  research  and  innovation  objectives 
and  funding  targets,  are  instrumental  for 
reducing energy use and dependence on fossil 
fuels. 

storage/flexibility 

resources, 

solutions 

in 
improved 

waste 
Ireland’s 
performance 
management  could  be 
(see 
Annex  7).  In  2019,  Ireland’s  municipal  waste 
production  was  598  kg/capita,  significantly 
above  the  EU  average  of  502  kg/capita  (see 
Graph  3.2).  In  addition,  Ireland  performs  well 
below  the  EU  average  in  terms  of  circular 
economy 
indicators.  The  average  use  of 
circular  material  is  1.8%,  well  below  the  EU 
average of 12.8%. 

The  waste  action  plan  for  a  circular 
economy  adopted 
in  2020  sets  out 
Ireland’s  overall  policy  on  the  transition 
to  a  circular  economy  and  waste 
prevention.  The  plan  sets  out  increased 
ambitions for Ireland to become a front runner 
in the circular economy. The plan lays down a 
broad  range  of  actions,  from  improving  the 
regulatory  environment 
introducing  a 
deposit  and  return  scheme  for  plastic  bottles, 
providing  incentives  to  develop  research  and 
innovation,  and  creating  value  chains  for 
polluting  products.  Fully  implementing  these 
actions as specified under the plan will be key 
to  help  prevent  waste  and  promote  a  circular 
economy. 

to 

10 

 
Graph 3.2: Municipal Waste Treatment in 
Ireland, by type 

sustainability in the long run, in the absence of 
policy  responses  (see  Annex  20).  The  old-age 
dependency ratio – the proportion of recipients 
to  contributors  in  the  pension  system  –  is 
projected  to  more  than  double  from  24%  in 
2019 to 53% by 2070. Population ageing will 
not  only  affect  pension  spending  but  also 
increase the cost of healthcare and long-term 
care,  with  total  ageing  costs  projected  to  rise 
by 6.2 percentage points of GDP by 2070 (18).  

of 

an 

System. 

Automatic 

The  reform  of  the  pension  system  is 
underway, as challenges related to fiscal 
sustainability  persist.  The  Directive  on  the 
activities  and  supervision  of  institutions  for 
occupational  retirement  provision  (the  IORP  II 
Directive)  was  transposed  in  April  2021  and 
pension  schemes  are  now  working  with  the 
Pensions Authority to achieve compliance. The 
Irish Government recently decided on the final 
Enrolment 
design 
Supplementary 
Public 
Pension 
spending  on  pensions  is  expected  to  increase 
by  2.3  percentage  points  of  GDP  between 
2019  and  2040.  Any  increase  in  pension 
spending  will  ultimately  have  to  be  financed 
by  the  taxpayer,  via  either  higher  rates  of 
social  insurance  contributions  or  transfers 
from  the  Exchequer  to  the  social  insurance 
fund.  The 
Irish  Government  repealed  an 
increase  in  pensionable  age  from  66  to  67 
that  was  expected  to  enter  into  force  in 
January  2021.  A  report  by  the  independent 
Pensions  Commission  suggests  a  gradual 
incremental  increase in  the  state  pension  age 
by 3 months each year, beginning in 2028 and 
reaching 67 in 2031, with further increases of 
3  months  every  two  years,  reaching  68  in 
2039.  

remains  excessively 

Ireland’s  tax  base  is  relatively  narrow 
and 
reliant  on 
corporate  taxes 
(see  Annex  18).  The 
sensitivity  of  tax  revenues  to  the  income  and 
profit developments of corporations has risen, 
as  corporate  tax  revenues  now  account  for 
22.4%  of  total  tax  revenues.  This  important 
source of income is driven by a small number 
of  firms.  In  2020,  the  top  10  taxpayers 
accounted  for  around  half  of  corporation  tax 
revenues  (see  Graph  3.3).  In  addition,  the 

Source: Eurostat 

Ireland  has  encountered  difficulties  in 
implementing  the  Urban  Waste  Water 
Treatment  Directive.  This  is  partly  due  to 
ageing or outdated infrastructure that has not 
been  renewed  because  of  limited  investment 
in  the  water  sector.  While  the  RRP  includes  a 
measure  on  improving  waste  water  system, 
significant  investment  is  still  required.  The 
estimated  investment  to  address  reported 
non-compliance  with  the  Urban  Waste  Water 
Treatment  Directive  is  EUR  2 698  million (16). 
In  2018  only  42%  of  the  collected  waste 
the 
compliant  with 
water 
requirements of the above Directive (17). 

load  was 

Addressing public finance 
challenges  

The  sustainability  of 
Ireland’s  public 
finances  is  subject  to  challenges  in  the 
long run.  Ireland’s  public  finances  weathered 
the COVID-19 pandemic well. Thanks to strong 
flows  and  prudent 
government 
budgeting, 
to  be 
contained  for  the  coming  years.  However, 
fiscal 
population 

revenue 
financial 

risks  appear 

ageing 

affect 

could 

(16)  European Commission’s ninth report on the 

implementation status and the programmes for 
implementation of the Urban Waste Water Treatment 
Directive. 

(17)  Ibidem 

(18)  European Commission (2021) Ageing Report. 

11 

581576598625555010020030040050060070020162017201820192020Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU 27 
      
                                                 
                                                 
structure  of  taxes  on  individual  or  household 
income  is  associated  with  a  narrow  tax  base. 
In  2021,  one  in  three  income  earners  were 
exempt  from  taxes  as  their  standard  rate 
liability  was  covered  by  credits  or  age 
exemption limits. 

Graph 3.3: Corporation tax revenues 

Source: Revenue data 

effectively, 

Ireland has committed to reforms that, if 
implemented 
could 
potentially  help  tackle  aggressive  tax 
planning strategies. The commitment in the 
RRP  aims  to  prevent  double  non-taxation. 
However, it does not cover low-tax jurisdictions 
and  the  details  of  the  reform  have  yet  to  be 
defined.  In  addition,  in  October  2021,  Ireland 
announced  that 
join  the  global 
it  would 
OECD/G20  inclusive  framework  agreement  – 
agreed by more than 130 countries – aimed at 
reforming 
This 
landmark  reform  would  put  limitations  on  a 
‘race 
tax 
frameworks (19).  The  European  Commission 
has  proposed  a  directive  setting  out  how  EU 
Member  States,  including  Ireland,  will  apply 
the principles of the 15% effective tax rate in 
practice (20).  The  Commission  will  closely 

in  corporate 

the  bottom’ 

international 

rules. 

tax 

to 

(19) OECD, “International community strikes a ground-

breaking tax deal for the digital age,” 8 October 2021 
(https://www.oecd.org/tax/international-community-
strikes-a-ground-breaking-tax-deal-for-the-digital-
age.htm). 

(20) European Commission “Fair Taxation: Commission 
proposes swift transposition of the international 
agreement on minimum taxation of multinationals,” 22 
December 2021 
(https://ec.europa.eu/commission/presscorner/detail/en/i
p_21_7028). 

monitor  how  these  announced  measures  are 
implemented.  When  implemented,  they  have 
the  potential  to  help  significantly  tackle 
aggressive tax planning.  

to 

included 

risks  due 
economy, 

While  Ireland  has  improved  its  anti-
money 
laundering  framework  overall, 
progress  is  still  needed  in  certain  areas. 
its 
faces  certain 
Ireland 
internationally-oriented 
with 
significant inflows of foreign direct investment 
and  the  presence  of  complex  legal  structures 
involving foreign ownership. Ireland has made 
progress  on  introducing  beneficial  ownership 
registers, which help increase transparency by 
documenting  who  ultimately  owns  or  controls 
a corporate vehicle. The anti-money laundering 
reforms 
Ireland’s  RRP  cover 
supervision action of trust or company service 
providers  supervised  by 
the  Anti-Money 
Laundering  Compliance  Unit.  The  recently 
published sectoral risk assessment for trust or 
company  service  providers  will  help  inform 
follow-up actions in that respect. However, the 
RRP  does  not  cover  supervision  of  trust  or 
company 
for  which 
supervision  is  delegated  to  self-regulatory 
bodies.  For  those  service  providers,  further 
efforts  seem  necessary  to  prevent  possible 
gaps  or  diverging  supervision  standards 
between 
Laundering 
Compliance Unit and self-regulatory bodies. 

Anti-Money 

providers 

service 

the 

in 

Implementing plans for fairer 
housing and for health and long-
term care 

The  government  has  announced  the 
‘housing  for  all’  plan  to  help  tackle  the 
housing  crisis  resulting  from  persistent 
shortfalls  in  housing  supply.  While  20 500 
new  housing  units  were  completed  in  2021, 
this 
the  government’s 
estimate (21)  that  an  average  of  33 000  new 
homes would be needed each year from 2021 
to 2030 (see Graph 3.4). The new ‘housing for 
all’  plan  aims  to meet  this  need.  Its  financing 

short  of 

falls 

(21)  Government of Ireland (2021) Housing for All: A new 

Housing Plan for Ireland, p. 31. 

12 

0510152025corporation taxof which top 10 companies% of total tax 
      
                                                 
                                                 
will  exceed  EUR  20  billion  over  the  next  five 
years.  Almost  a  third  of  the  homes  to  be 
delivered under this plan would  be new social 
homes.  In  addition,  one  in  six  homes  to  be 
delivered  would  be  affordable  purchase  or 
rental  homes (22).  Some  of 
cost 
these 
commitments  are 
in  dedicated 
targets in the Irish RRP. However, the ‘housing 
for  all’  plan  is  still  at  risk  of  not  being 
implemented  effectively,  due  in  particular  to 
labour  workforce  constraints 
is 
estimated  that  the  workforce  employed  in 
housing construction needs to expand  by  over 
50%  by  the  middle  of  the  decade)  and  the 
rising cost of materials (23). 

reflected 

(e.g. 

it 

Graph 3.4: Housing completions 

Source: Central Statistics Office, Department of Housing, 
Local Government and Heritage 

related 

strategy 

challenges 

comprehensive 

Ireland’s 
healthcare 
(‘Sláintecare’)  has 
reform 
experienced  delays.  This  strategy  aims  to 
address 
cost-
effectiveness  of  the  healthcare  system  and 
the  lack  of  universal  coverage.  A  shortage  of 
doctors has exacerbated long waiting times for 
publicly  funded  services  and  has  increased 
demand  for  private  providers.  The  RRP 
encompasses the implementation of key parts 
of  the  Sláintecare  reform,  such  as  the 

to 

(22)  Cost rental is a new form of public housing in Ireland, 
aimed at people who are above the social housing 
income limits. Rents charged will only cover the cost of 
developing, financing, managing and maintaining the 
homes – with a target to achieve rents of at least 25% 
below market level. 

(23)  European Commission (2022) In-Depth Review for 

Ireland, section 1.2. 

13 

fledged 

implementation 

consultant contract governing the employment 
conditions of medical consultants in the public 
health care system. However, the RRP does not 
address universal coverage for primary care. A 
the 
fully 
Sláintecare  reforms  could  create  a  system 
based  on  universal  entitlement  to  all  health 
services  regardless  of  people’s  ability  to  pay. 
In turn, this may help address health problems 
earlier 
thereby 
decreasing the demand for more complex and 
costly care services.  

and  more 

efficiently, 

of 

The  ageing  of  the  population  puts 
Ireland’s  long-term  care  system  under 
considerable  pressure,  in  terms  of  both 
accessibility  and  sustainability.  The  share 
of  'potential  dependants’  in  the  population  is 
projected  to  rise  from  5.0%  in  2019  to  5.6% 
by  2030  and  6.5%  by  2050 (24).  In  2020,  the 
share  of  inactive  population  due  to  caring 
responsibilities stood at 32.5%, well above the 
EU average (18.7%). This suggests a high level 
of unmet needs, especially in home care. Such 
unmet  needs  are  likely  to  result  in  more 
expensive 
care.  Reforms 
envisaged  in  the  context  of  the  Sláintecare 
strategy  include  creating  a  framework  to 
sustain  the  gradual  expansion  of  home  care 
services.  

institutionalised 

Realising the full potential of 
Ireland’s economy and society 

The  productivity  of  multinational  and 
domestic  companies  differs  significantly. 
The  productivity  of  multinationals  remains 
much higher, as a result of frontier innovation 
and  economies  of  scale.  At  the  same  time, 

(24)  2021 Long-Term Care Report: Trends, challenges and 
opportunities in an ageing society, Joint Report 
prepared by the Social Protection Committee and the 
European Commission (DG EMPL). “Potential 
dependants” are defined on the basis of severe ‘self-
perceived longstanding limitation in activities because 
of health problems for at least the last 6 months’ for 
people in private households, with the addition of 
national data on recipients of institutional long-term 
care. Projections are based on the Ageing Working 
Group reference scenario, assuming that half of the 
projected years gained in life expectancy are spent 
without disability (i.e. demanding care). 

050001000015000200002500030000350004000045000Housing completions  -realisedHousing completions - projectedAverage estimated need for 2021-2023Numberof units 
      
                                                 
                                                 
knowledge  spill  overs  from  multinational  to 
domestic  companies  continue  to  be  limited. 
The  annual  labour  productivity  of  domestic 
companies  increased  on  average  by  0.8% 
between  2010  and  2019,  well  below  that  of 
multinationals,  which  increased  by  8.8%  (see 
Graph  3.5).  According  to  Ireland’s  National 
Competitiveness  and  Productivity  Council, 
productivity  growth  of  domestic  companies  is 
held  back  by,  among  other  things,  high 
insurance  costs,  high  legal  costs  and  a  high 
cost  of  credit (25).  The  Council  advocates 
policies  to  increase  productivity  growth,  and 
notably:  (i)  growth  in  innovation  and  the 
development  of  knowledge-based  capital 
within companies; (ii) knowledge diffusion; (iii) 
resource 
(iv)  upskilling, 
digitalisation, 
allocation 
and 
among 
infrastructure;  and  (vi)  diversification  across 
industries.  

companies 

(v) 

Graph 3.5: Labour productivity – average 
annual growth 2010-2019 

Source: Central Statistics Office 

and 

systems 

The  duality  of  the  Irish  economy  also 
results  in  strong  regional  disparities  (see 
Annex  15).  Multinationals  are  geographically 
concentrated in the areas in and around Dublin 
and  Cork.  These  areas  have  strong  regional 
innovation 
significantly 
outperform  the  rest  of  the  country  in  all 
relevant  economic  indicators,  such  as  growth 
of  regional  GDP,  productivity  of  the  labour 
income.  Other, 
force, 
predominantly rural and remote regions, in the 
north,  the  west  or  along  the  border  with 
Northern Ireland, are lagging behind. This trend 
is  likely  to  continue,  as  the  Northern  and 
Western  region’s  innovation  system  is  only 

disposable 

or 

considered  ‘moderate’  –  the  second  lowest 
ranking for European regions.  

The  Irish  R&D  system  benefits  from  a 
strong  public  science  base  and  dedicated 
foreign  direct  investments,  but  there  is 
room  for  progress.  Ireland’s  overall  R&D 
intensity  (gross  domestic  expenditure  on  R&D 
as  a  share  of  GDP)  was  1.23%  in  2020 
compared to an EU average of 2.32% (26) and 
has  been  on  a  declining  trend  since  2010, 
while public R&D intensity, at 0.32%, is one of 
the  lowest  in  the  EU  (ranking  24th).  Reducing 
the  dependence  on  tax  incentives  in  the  R&D 
policy mix and providing more direct support to 
SMEs,  while  fostering  cooperation  between 
R&D  actors,  would  help  develop  a  more 
comprehensive  and 
innovation 
ecosystem.  New  legislation  to  reform  the 
governance  of  higher  education  and  further 
development  of  technological  universities  are 
expected to improve the quality, efficiency and 
the  higher 
the 
regional 
education  sector  and 
innovation ecosystems that do not perform as 
well. 

innovation  capacity  of 

integrated 

to  help 

justice  system  could  be  further 
The 
digitalised.  Ireland  ranks  between  21st  and 
23rd out of 27 Member States on (i) the use of 
digital  technology  by  courts  and  prosecution 
services, (ii)  electronic  communication  tools  in 
courts,  and  (iii)  procedural  rules  that  allow 
digital  technology  in  court  cases (27).  Ongoing 
modernisation  measures  –  as  part  of  the 
for 
Courts  Service 
‘supporting  access  to  justice  in  a  modern, 
digital 
include  electronic  filing, 
establishing  a  case management  system,  and 
putting  in  place  courtroom  technology.  These 
should  be  implemented  quickly  to  digitalise 
the Irish justice system effectively. 

Ireland’  – 

long-term 

strategy 

(26) In 2020, Ireland was only in 19th place in the EU in 

terms of R&D intensity measured against GDP, although 
this is affected by issues relating to the composition 
and measurement of Ireland’s GDP. In terms of 
modified GNI (GNI*), that excludes distortions from 
foreign-owned firms, Ireland has an R&D intensity of 
2.20%.  

(25) National Competitiveness and Productivity Council 
(2021) Ireland’s Competitiveness Challenge 2021 
http://www.competitiveness.ie/publications/2021/ireland
's%20competitiveness%20challenge%202021.pdf 

(27) European Commission 2022 Rule of Law Report 

Country Chapter on the rule of law situation in Ireland 
(forthcoming). Also see 2022 EU Justice Scoreboard, 
(forthcoming). 

14 

0246810Ireland - Sectorsdominated by foreign-owned multinationalsIreland - Other sectorsEU Average% 
      
                                                 
                                                 
of 

Ireland’s 

The  legacy  of  the  financial  crisis  and 
features 
insolvency 
framework  may  be  factors  contributing 
to  elevated  interest  rates  on  loans  to 
households  and  SMEs.  The  global  financial 
crisis  particularly  impacted  the  Irish  economy 
and resulted in a substantial fall in real estate 
prices.  Furthermore,  in  cases  of  borrowers’ 
defaults,  banks  and  other  lenders  recover  on 
average a smaller share of their loans than in 
most other Member States, and  it takes more 
time for this recovery to take place (28). These 
factors  may  lead  banks  and  other  lenders  to 
assess their loans as more risky and hence to 
charge a higher interest rate on them. 

low 

levels 

comparatively 

of 
The 
employment  for  some  groups  may  point 
to  untapped labour  market potential  and 
contribute  to  risks  of  poverty  and  social 
exclusion.  In  2021,  the  employment  rates  of 
low-  and  medium-skilled  workers  aged  20  to 
65  were  51.3%  and  69.5%  respectively, 
compared  to  an  overall  employment  rate  of 
74.9%. In 2020, the employment rate of lone 
parents  stood  at  64%  –  the  lowest in the  EU. 
In  addition,  the  disability  employment  gap  in 
Ireland  was  the  largest  in  the  EU,  at  38.6%. 
These  groups  are  also  at  an  elevated  risk  of 
poverty  and  social  exclusion.  Tackling  these 
challenges  in  line  with  the  European  Pillar  of 
Social Rights is key for Ireland to contribute to 
reaching  the  2030  EU  headline  targets  on 
employment,  skills  and  poverty  reduction.  In 
certain  cases,  the  net  income  of  low-income 
households  may  decrease  after  taking  up 
work,  due 
the  withdrawal  of  social 
assistance  benefits.  Targeted  updates  of  the 
tax  and  benefits  systems  may  support  higher 
employment.  As  pandemic  support  is  phased 
initiatives, 
out,  upskilling  and 
together 
create 
jobs/employment,  will  be  key  for  the  Irish 
labour market. 

with  measures 

reskilling 

to 

to 

(28)  European Banking Authority (2020) Report on the 
benchmarking of national loan enforcement 
frameworks https://www.eba.europa.eu/eba-publishes-
report-benchmarking-national-insolvency-frameworks-
across-eu 

15 

 
 
                                                 
Beyond  the  reforms  and  investments  in 
the RRP, Ireland would benefit from: 

  fostering investment in electricity networks 
and 
renewable  power  generation  and 
improving the planning and permit system; 

  developing  infrastructure  and  policies  to 
increase 
the  waste 
the  efficiency  of 
reduce  waste 
management 
system, 
production,  increase  reused  and  recycled 
content,  achieving  lower  incineration  and 
separating  more  efficiently  collection  of 
recyclable waste;  

  lowering the vulnerability of public finances 

to economic shocks.  

KEY FINDINGS 
KEY FINDINGS 

Ireland’s  RRP 
address  a  series  of 
challenges through:  

includes  measures  to 
its  structural 

  promoting  safer  and  cleaner  waste  water 

management systems; 

  ensuring  that  the  expected  increase  in 
pension  costs  is  financed  in  a  structural 
and transparent manner; 

  tackling aggressive tax planning strategies; 

  strengthening 

anti-money 

laundering 
supervision, in particular by complementing 
RRP  measures  with  strengthening  risk-
based  supervision  carried  out  by  self-
regulatory bodies; 

  increasing 

the  supply  of  social  and 
affordable  housing,  in  particular  through 
implementing  the  national  ‘Housing  for  All’ 
plan effectively; 

  implementing  the  Sláintecare  reform,  in 
particular  those  parts  related  to  improving 
the  cost-effectiveness  of  the  healthcare 
system,  workforce  planning,  and  long-term 
care as well as ensuring universal access to 
health services; 

  increasing 

the 

level  of  public  R&D 
investment  and  reducing  the  dependence 
on tax credits, in favour of direct support; 

employment 

and 
including  through  the 

  supporting 
social 
labour 
inclusion, 
market  integration  of  vulnerable  groups 
and  by  developing  skills,  particularly  those 
to support the green transition. 

At the same time, due to the modest size 
of the plan, further efforts on the above- 
mentioned challenges beyond the RRP are 
needed. 

16 

 
 
 
ANNEXES 

 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

Annex 1: Sustainable Development Goals 

Annex 2: Recovery and Resilience Plan – implementation 

Annex 3: Other EU instruments for recovery and growth 

Annex 4: Progress in the implementation of country-specific recommendations 

Environmental sustainability 

Annex 5: Green Deal 

Annex 6: Employment and social impact of the green transition 

Productivity 

Annex 7: Resource efficiency and productivity 

Annex 8: Digital transition 

Annex 9: Innovation 

Annex 10: Industry and single market 

Annex 11: Public administration 

Fairness 

Annex 12: Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

Annex 13: Education and skills 

Annex 14: Health and health systems 

Annex 15: Economic and social performance at regional level 

Macroeconomic Stability 

Annex 16: Key financial sector developments 

Annex 17: Macroeconomic Imbalance Procedure assessment matrix 

Annex 18: Taxation 

Annex 19: Key economic and financial indicators 

Annex 20: Debt sustainability analysis 

LIST OF TABLES 

Table A2.1: 
Table A4.1: 
Table A5.1: 
Table A7.1: 
Table A8.1: 

Key elements of the Irish RRP 
Summary table on 2019,2020 and 2021 CSRs 
Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 
Selected resource efficiency indicators 
Key Digital Economy and Society Index Indicators 

19 

21 

21 

23 

24 

27 

30 

30 

34 

36 

36 

38 

40 

42 

45 

47 

47 

49 

52 

54 

56 

56 

58 

60 

62 

63 

23 
28 
33 
37 
39 

 
 
 
Table A9.1: 
Table A10.1: 
Table A11.1: 
Table A11.2: 
Table A12.1: 
Table A13.1: 
Table A14.1: 
Table A15.1: 
Table A16.1: 
Table A17.1: 
Table A18.1: 
Table A19.1: 
Table A20.1: 
Table A20.2: 

Key research, development and innovation indicators 
Key single market and industry indicators 
Performance on the single market public procurement indicator 
Public administration indicators 
Social scoreboard for Ireland 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
Key health indicators 
Selected indicators at regional level - Ireland 
Financial soundness indicators 
Assessment of Macroeconomic Imbalances matrix 
Indicators on taxation 
Key economic and financial indicators 
Debt sustainability analysis for Ireland 
Heat map of fiscal sustainability risks for Ireland 

LIST OF GRAPHS 

Graph A1.1: 

Progress towards SDGs in Ireland in the last five years 

Graph A2.1: 

Share of RRF funds contributing to each policy pillar 

Graph A3.1: 

2014-2020 European Structural and Investment Funds - total budget by fund (EUR billion, %) 

Graph A3.2: 

Cohesion policy contribution to the SDGs (EUR billion) 

Graph A4.1: 

Ireland’s progress on the 2019-2020 CSRs (2022 European Semester cycle) 

Graph A5.1: 

Taxation and government expenditure on environmental protection 

Graph A5.2: 

Thematic - Energy Share in energy mix (solids, oil, gas, renewables) 

Graph A5.3: 

Thematic - Biodiversity Terrestrial protected areas and organic farming 

Graph A5.4: 

Share of zero emission vehicles (% of new registrations) 

Graph A6.1: 

Fair green transition challenges 

Graph A6.2: 

Energy poverty by income decile 

Graph A11.1: 

Performance on evidence-based policy making indicators 

Graph A14.1: 

Life expectancy at birth (years) 

Graph A14.2: 

Projected increase in public expenditure on health care over 2019-2070 (reference scenario) 

Graph A15.1: 

GDP per head (2019) and GDP growth (2010-2019) 

Graph A15.2: 

Real GVA per worker 

Graph A15.3: 

Territories most affected by the climate transition in Ireland 

Graph A18.1: 

Tax wedge indicators 

41 
43 
45 
46 
47 
50 
53 
55 
56 
59 
60 
62 
63 
64 

22 

23 

24 

26 

27 

30 

31 

31 

32 

35 

35 

45 

52 

52 

54 

54 

55 

61 

20 

 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

Ireland has made excellent progress on a number 
of  indicators,  including  on  ‘Gender  equality’  (SDG 
5), where the share of women holding positions in 
senior  management  has  increased  from  15.3% 
(2015)  to  28.8% 
includes 
measures 
Ireland’s  emphasis  on 
education  and  skills.  For  example  the  SOLAS 
recovery skills response programme seeks to equip 
workers with the skills to shift into growth sectors 
of the economy, such as IT, green construction and 
climate change mitigation.  

(2020).  The  RRP 

that  echo 

Ireland performs very well on SDG indicators 
related  to  productivity  (SDG  4,  8)  and  is 
improving on others (SDG 9). Ireland has been 
further improving on its already good performance 
on  ‘Decent  work  and  economic  growth’  (SDG  8), 
which is reflected by a significantly higher level of 
investment share of GDP (2020: 39.7% against an 
EU average of 22.3%). ‘Quality education’ (SDG 4) 
contributes  to  the  productivity  of  human  capital, 
for  which  Ireland  displays  significant  progress  in 
tertiary  education  attainment  (from  54.0%  in 
2015  to  58.4%  in  2020,  compared  to  an  EU 
average of 40.5%). However, Ireland is still lagging 
behind the EU average in ‘Industry, innovation and 
lower 
(SDG  9),  where 
infrastructure’ 
expenditure  in  R&D  and  a  lower  share  of  R&D 
Challenge 
The  National  Grand 
personnel. 
programme 
incentivises 
in  the  RRP 
included 
innovation  in  green,  climate  and  digital  solutions 
and 
transfers  and 
cooperation  between  businesses,  with  a  focus  on 
the 
digital 
low 
transformation.  

encourages 

technology 

economy 

it  has 

carbon 

and 

further 

improved 

Ireland performs very well on SDG indicators 
related  to  macroeconomic  stability  (8,  16). 
Ireland 
its  already  good 
performance  on  the  quality  of  institutions  (SDG 
16). Real GDP per capita in Ireland increased from 
EUR 49 620 in 2015 to EUR 62 980 in 2020 (EU: 
26 380 in 2020). Ireland was the only EU Member 
State to avoid a recession in 2020.  

This  Annex  assesses  Ireland’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change,  while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set  developed  to  monitor  progress  on  SDGs  in  an 
EU context. 

Ireland  performs  well  or  very  well  on  most 
SDG 
indicators  related  to  environmental 
sustainability (SDG 2, 6, 7, 11 and 15) and is 
improving  on  others  (SDG  9,  12  and  13). 
Ireland scores above the EU average on a number 
of key indicators (SDG 6, 11 and 15), but progress 
towards  achieving  these  SDG  goals  has  slowed 
somewhat.  Ireland  has  made  further  progress  on 
several  other  SDGs  (SDG  12,  13).  On  circular 
economy  and  waste  prevention  (SDG  12),  while 
remaining  below  the  EU  average  (2020:  circular 
material  use  rate  of  1.8%  compared  to  12.8%  in 
the EU), the 2020 waste action plan for a circular 
economy  sets  out  Ireland’s  overall  policy  on  the 
transition  to  a  circular  economy  and  waste 
prevention. On climate action (SDG 13), introducing 
the  climate  action  plan  in  2019  and  subsequent 
amendments to it, has significantly raised Ireland’s 
ambitions in tackling climate challenges.  

Ireland performs very well on SDG indicators 
related  to  fairness  (SDG  1,  2,  3,  4,  5,  8  and 
10). Ireland is outperforming the EU average and 
is making progress on several indicators related to 
inequality,  poverty,  inclusive  growth,  health  and 
well-being,  education  and  gender  equality.  For 
instance,  Ireland  shows  higher  rates  of  adult 
participation  in  learning (29)  than  the  EU  average 
(2020:  11.0%  compared  to  9.2%).  In  addition, 

(29)  The indicator on adult learning participation over the previous 
four weeks is used in the country report, rather than the 
indicator on learning over the previous 12 months, as Adult 
Education Survey data for the 12-month indicator are only 
available for 2016 at the moment, while the new Labour 
Force Survey indicator agreed for use in the social 
scoreboard and as 2030 headline target on skills will only be 
available in 2023 

21 

 
 
                                                 
 
 
Graph A1.1: Progress towards SDGs in Ireland in the last five years 

For detailed datasets on the various SDGs see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu) 
Source: Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021. 

22 

 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 
ANNEX 2: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  EU’s  efforts  to 
support  its  recovery  from  the  COVID-19 
pandemic,  fast  forward  the  twin  transition 
and  strengthen  resilience  against  future 
shocks. 
recovery  and 
resilience  plan 
(RRP)  on  28 May 2021.  The 
Commission’s  positive  assessment  on  16 July 
2021 and Council’s approval on 8 September 2021 
paved  the  way  for  disbursing  EUR  989  million  in 
grants  under  the  RRF  over  2021-2026.  The  key 
elements of the Irish RRP are set out in Table A2.1. 

Ireland  submitted 

its 

Table A2.1: Key elements of the Irish RRP 

(1) See Pfeiffer P., Varga J. and in ’t Veld J. (2021), 
“Quantifying Spillovers of NGEU investment”, European 
Economy Discussion Papers, No. 144 and Afman et al. (2021), 
“An overview of the economics of the Recovery and Resilience 
Facility”, Quarterly Report on the Euro Area (QREA), Vol. 20, 
No. 3 pp. 7-16. 
Source: European Commission 2022 

The  share  of  funds  contributing  to  each  of  the 
RRF’s six policy pillars is outlined in the graph A2.1. 

by 

Ireland 

progress  made 

The 
in 
implementing  its  plan  is  published  in  the 
Recovery  and  Resilience  Scoreboard.  The 
Scoreboard  also  gives  a  clear  overview  of  the 
progress  made  in  implementing  the  RRF  as  a 
whole. 

. 

Graph A2.1: Share of RRF funds contributing to each policy pillar 

Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed on this 
chart amounts to 200% of the estimated cost of the RRPs. The bottom part represents the amount of the primary pillar, the top 
part the amount of the secondary pillar.  
Source: RRF Scoreboard https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard/country_overview.html 

23 

Total allocation EUR 989 million in grants (0.3% of 2019 GDP)Investments and Reforms 16 investments and 9 reforms Total number of Milestones and Targets109Estimated macroeconomic impact (1) Raise GDP by 0.3%-0.5% by 2026 (0.4% in spillover effects)Pre-financing disbursed Ireland did not request pre-financingFirst instalment Ireland did not yet submit a first payment request0%10%20%30%40%50%60%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic,social andinstitutionalresiliencePolicies for thenext generation 
 
 
     
 
 
 
 
     
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
an  additional  amount  of  about  EUR 800  billion 
largest 
through  NextGenerationEU  and 
instrument, the Recovery and Resilience Facility, it 
represents  significant  firepower  to  support  the 
recovery and sustainable growth. 

its 

Graph A3.1: 2014-2020 European Structural and 
Investment Funds - total budget by fund (EUR 
billion, %) 

regions. 

support 

vulnerable 

In  2021-2027,  EU  cohesion  policy  funds (30) 
will 
development 
long-term 
objectives  in  Ireland  by  investing  EUR  1.28 
billion (31).  This  includes  EUR  84.5  million  from 
the  Just  Transition  Fund  directed  to  alleviate  the 
socio-economic  impacts  of  the  green  transition  in 
the  most 
Partnership 
agreements  and  programmes  under  the  2021-
2027  Cohesion  fund  are  designed  in  a  way  that 
takes  into  account  the  2019-2020  CSRs  and 
investment  guidance  provided  within  the  context 
of the European Semester, ensuring synergies and 
complementarities  with  other  EU  funding. 
In 
addition,  Ireland  will  benefit  from  EUR  7.5  billion 
support for the 2023-27 period from the Common 
social, 
Agricultural 
environmental,  and  economic  sustainability  and 
innovation 
rural  areas, 
contributing  to  the  European  Green  Deal,  and 
ensuring long-term food security. 

in  agriculture  and 

Policy,  which 

supports 

The data for the EAFRD and REACT-EU refer to the period 
2014-2022. 
Source: European Commission 

The 

(ESIF) (32). 

In  2014-2020,  EUR  4.33  billion  from  the  EU 
budget  was  intended  to  be  invested  in 
Ireland  under  the  European  Structural  and 
Investment  Funds 
total 
investment including  national  financing  amounted 
to  EUR  7.69  billion  (Graph  3.1),  representing 
around 0.37% of GDP for 2014-2020 and 15.06% 
of public investment (33). Among the 11 objectives, 
the  most  relevant  for  cohesion  policy  funding  in 
Ireland  are  environment  protection  and  resource 
efficiency,  climate  change  adaptation  and  risk 
prevention, research & innovation, and low-carbon 
economy  (in  total:  EUR 2.2  billion/EUR  3.6  billion 
including 
Promoting 
sustainable  and  quality  employment,  supporting 
labour mobility, social inclusion, combating poverty 
and  any  discrimination  as  well  as  skills 
development  feature  prominently  among  these 
objectives  for  cohesion  policy  funding.  Cohesion 
policy has helped over 43 000 firms, improved the 
energy  performance  of  over  20 000  households, 
and  reduced  CO2eq  by  almost  18 000  tonnes.  By 
end  of  2020,  cohesion  policy 
investments 
supported  more  than  350 000  participants,  of 
which  over  118 000  gained  qualification.  67 000 

financing). 

national 

(32)  ESIF includes cohesion policy funds (ERDF, ESF+, CF, Interreg), 

the European Agricultural Fund for Rural Development 
(EAFRD) and the European Maritime and Fisheries Fund 
(EMFF). According to the ‘N+3 rule’, the funds committed for 
2014-2020 must be spent by 2023 at the latest (by 2025 
for the EAFRD). Data source: Cohesion Open data, cut-off 
date 31.12.2021 for ERDF, ESF+, CF, Interreg; cut-off date 
31.12.2020 for EAFRD and EMFF 

(33)  Public investment is gross fixed capital formation plus 

capital transfers, general government. 

(30)  European Regional Development Fund (ERDF), European 

Social Fund+ (ESF+), Cohesion Fund (CF), Just Transition Fund 
(JTF), Interreg. 

(31) Current prices, source: Cohesion Open Data  

24 

5.3870%0.243%0.9412%0.9212%0.203%EAFRDEMFFERDFESFYEI 
 
                                                 
  
                                                 
 
and 

in  wholesale 

primarily 
trade, 
and 
accommodation 
construction. Ireland is estimated to have saved a 
total of EUR 0.05 billion on interest payments as a 
result of SURE’s lower interest rates. 

retail 
services 

food 

and 

in  2021  aimed,  for  example, 

The  Commission  is  engaged  in  providing 
tailor-made  expertise  via  the  Technical 
Support  Instrument  to  help  Ireland  design 
and  implement  growth-enhancing  reforms, 
including  support  for  implementing  its  RRP. 
Since  2018, 
Ireland  has  received  assistance 
through  44  technical  support  projects.  Projects 
delivered 
to 
formulate  policy  reform  recommendations  on  an 
authorisation  and  supervision  manual  for  the 
Central  Securities  Depository,  as  well  as  on 
establishing  a  modern  regulatory  authority  for  all 
gambling  activities  licensed  in  the  country.  In 
2022,  new  projects  will  start  to  support,  among 
other  things,  the  development  and  deployment  of 
the  Barnahus  model.  Another  project  will  involve 
providing  expertise  to  develop  a  monitoring  and 
reporting 
the 
verification aspects of the Irish RRP, and to reduce 
fraud and double funding. 

to  help  manage 

framework 

include 

from  other  EU 
Ireland  also  benefits 
programmes.  These 
the  Connecting 
Europe  Facility,  which allocated  EUR 116.2 million 
to  specific  projects  on  strategic 
transport 
networks,  and  Horizon  2020,  which  allocated  EUR 
1 190 million. 

participants  that  were  engaged  in  the  labour 
market were from a disadvantaged background. 

are 

funds 

policy 

Cohesion 
already 
substantially  helping  achieve  the  SDGs 
objectives.  In  Ireland,  cohesion  policy  funds  are 
supporting 7 of the 17 SDGs with up  to 100% of 
the expenditure helping attain the goals.  

In  2021,  the  REACT-EU  programme  under 
NextGenerationEU  provided  EUR  88.3  million 
of additional funding to 2014-2020 cohesion 
policy  allocations  for  Ireland.  This  funding 
aimed  to  ensure  a  balanced  recovery,  foster 
convergence  and  provide  vital  support  to  regions 
so  as  to  address  the  impact  of  the  COVID-19 
outbreak.  In  2021,  REACT-EU  support  to  Ireland 
focused  on  ensuring  a  resilient  recovery  from 
COVID-19 through investing in inclusive education 
and training. Measures were taken to help  reopen 
schools, and the extra funding helped other action 
to  be 
to 
taken, 
disadvantaged students.  

providing 

laptops 

e.g. 

Investment 
The  Coronavirus  Response 
Initiative (34) provided the first EU emergency 
assistance  to  Ireland  in  relation  to  the 
COVID-19 pandemic.  It  introduced  extraordinary 
flexibility,  enabling  Ireland  to  reallocate  resources 
for  immediate  public  health  needs  (EUR  311 
million). 
In  fact,  there  was  very  significant 
reprogramming,  and  most  resources  were  shifted 
in  order  to  purchase 
to  health 
investments 
personal  protective  equipment. 
Ireland  also 
benefited from the temporary 100% EU financing 
of  incurred  measures  in  cohesion  policy,  with 
approximately  EUR  485  million  in  2021  through 
100% co-financing. 

for 

risks 

temporary 

unemployment 

support 
in 

Ireland  received  support  under  the  European 
to 
instrument 
mitigate 
an 
emergency  (SURE)  to  finance  short-time 
work  schemes  and  similar  measures. In 
December  2020,  the  Council  granted  financial 
assistance  under  SURE  to  Ireland  for  a  maximum 
of  EUR 2.473  billion,  which  was  disbursed  by 
30 March 2021.  SURE 
to  have 
supported  approximately  30%  of  workers  and 
50%  of  firms  for  at  least  one  month  in  2020, 

is  estimated 

(34)  Re-allocating ESIF resources according to Regulation (EU) 

2020/460 of the European Parliament and of the Council of 
30 March 2020, and Regulation (EU) 2020/558 of the 
European Parliament and of the Council of 23 April 2020. 

25 

 
                                                 
Graph A3.2: Cohesion policy contribution to the SDGs (EUR billion) 

Source: European Commission 

26 

0.040.070.160.240.300.570.570.00.20.40.6SDG 15 Life on landSDG 9 Industry, innovation, infrastructureSDG 7 Affordable and clean energySDG 4 Quality educationSDG 1 No povertySDG 8 Decent work and economic growthSDG 3 Good health and well being 
  
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 
RECOMMENDATIONS 

Graph A4.1: Ireland’s progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

The  Commission  assessed  the  2019-2021 
country-specific  recommendations  (CSRs) (35) 
addressed  to  Ireland  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  Ireland  to 
date (36),  as  well  as  the  commitments  in  the 
RRP (37).  At 
the  RRP 
implementation, overall 82% of the CSRs focusing 
on  structural  issues  in  2019  and  2020  have 
recorded  at  least  “some  progress”,  while  18% 
recorded  “limited”  (see  Graph  A4.1).  Considerable 
additional  progress  in  addressing  structural  CSRs 
is  expected  in  the  years  to  come  with  the  further 
implementation of the RRP. 

this  early  stage  of 

Source: European Commission 

(35)  2021 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32021H0729%2807%29&qi
d=1627675454457  

2020 CSRs: https://eur-

lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2020&andText0=recommendation&DD_M
ONTH=07 

2019 CSRs: https://eur-

lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2019&andText0=recommendation&DD_M
ONTH=07 

(36)  Incl. policy action reported in the National Reform 

Programme, as well as in the RRF reporting (bi-annual 
reporting on the progress with implementation of milestones 
and targets and resulting from the payment request 
assessment). 

(37)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here takes into 
account the degree of implementation of the measures 
included in the RRP and of those done outside of the RRP at 
the time of assessment. Measures foreseen in the annex of 
the adopted Council Implementing Decision on the approval 
of the assessment of the RRP which are not yet adopted nor 
implemented but considered as credibly announced, in line 
with the CSR assessment methodology, warrant “limited 
progress”. Once implemented, these measures can lead to 
“some/substantial progress” or “full implementation”, 
depending on their relevance. 

27 

Limited Progress18%Some Progress63%Substantial Progress19% 
 
                                                 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A4.1: Summary table on 2019,2020 and 2021 CSRs 

(Continued on the next page) 

28 

IrelandAssessment in May 2022*RRP coverage of CSRs until 20262019 CSR1Limited ProgressAchieve the medium-term budgetary objective in 2020. Use windfall gains to accelerate the reduction of the general government debt ratio.Not relevant anymoreNot applicableLimitthescopeandnumberoftaxexpenditures,andbroadenthetax base. Limited ProgressContinue to address features of the tax system that may facilitate aggressive tax planning, and focus in particular on outbound payments.Limited ProgressRelevant RRP measures planned as of 2020Addresstheexpectedincreaseinage-relatedexpenditurebymakingthehealthcaresystemmorecost-effectiveandbyfullyimplementingpension reform plans.Limited ProgressRelevant RRP measures planned as of 2020, 20212019 CSR 2Some ProgressProvide personalised active integration support and facilitate upskilling, in particular for vulnerable groups and people living in households with low work intensity.Some ProgressRelevant RRP measures planned as of 2021Increase access to affordable and quality childcare.Substantial Progress2019 CSR 3Some ProgressFocus investment-related economic policy on low carbon and energy transition, the reduction of greenhouse gas emissions, Substantial ProgressRelevant RRP measures planned as of 2020, 2021, 2022sustainable transport,Some ProgressRelevant RRP measures planned as of 2022water, Some ProgressRelevant RRP measures planned as of 2021, 2022digital infrastructure Some ProgressRelevant RRP measures planned as of 2021, 2022, 2023and affordable and social housing, taking into account regional disparities.Some ProgressRelevant RRP measures planned as of 2021Implement measures, including those in the Future Jobs strategy, to diversify the economy and improve the productivity of Irish firms – small and medium enterprises in particular - by using more direct funding instruments to stimulate research and innovation Some ProgressRelevant RRP measures planned as of 2025and by reducing regulatory barriers to entrepreneurship.Some ProgressRelevant RRP measures planned as of 20222020 CSR1Some ProgressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment.Not relevant anymoreNot applicableImproveaccessibilityofthehealthsystemandstrengthenitsresilience,includingbyrespondingtothehealthworkforce’sneedsand ensuring universal coverage for primary care.Some ProgressRelevant RRP measures planned as of 2021 
 
 
  
 
Table (continued) 

* See footnote 37 
Source: European Commission 

29 

2020 CSR2Some ProgressSupport employment through developing skills.Some ProgressRelevant RRP measures planned as of 2021Address the risk of digital divide, including in the education sector.Substantial ProgressRelevant RRP measures planned as of 2021Increase the provision of social and affordable housing.Some ProgressRelevant RRP measures planned as of 20212020 CSR 3Some ProgressContinue to provide support to companies, in particular SMEs, especially through measures ensuring their liquidity.Substantial Progress Front-load mature public investment projects Some ProgressRelevant RRP measures planned as of 2021, 2022and promote private investment to foster the economic recovery.Some ProgressRelevant RRP measures planned as of 2021, 2022Focusinvestmentonthegreenanddigitaltransition,inparticularonclean and efficient production and use of energy, Substantial ProgressRelevant RRP measures planned as of 2020, 2021, 2022sustainable public transport, Some ProgressRelevant RRP measures planned as of 2022water supply and treatment, Some ProgressRelevant RRP measures planned as of 2021, 2022research and innovation Some ProgressRelevant RRP measures planned as of 2025and digital infrastructure.Some ProgressRelevant RRP measures planned as of 2021, 2022, 20232020 CSR 4Limited ProgressBroaden the tax base.Limited ProgressStepupactiontoaddressfeaturesofthetaxsystemthatfacilitateaggressive tax planning, including on outbound payments.Limited ProgressRelevant RRP measures planned as of 2020Ensureeffectivesupervisionandenforcementoftheanti-money-launderingframeworkasregardsprofessionalsprovidingtrustandcompany services.Some ProgressRelevant RRP measures planned as of 20212021 CSR1Substantial ProgressIn2022,pursueasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment. Full ImplementationNot applicableWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term.Substantial ProgressNot applicableAtthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthenationalbudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenand digital transition.Some ProgressNot applicableGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for allSome ProgressNot applicable 
 
  
 
ENVIRONMENTAL SUSTAINABILITY 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform  the  EU  into  a  modern,  resource-
efficient  and  competitive  economy  where 
there  are  no  net  emissions  of  greenhouse 
gases in 2050 and where economic growth is 
decoupled from resource use. This annex offers 
the  most  significant  and 
a  snapshot  of 
economically  relevant  developments  in  Ireland  in 
the  respective  building  blocks  of  the  European 
Green Deal. It is complemented by Annex 6 on the 
employment  and  social  impact  of  the  green 
transition  and  Annex  7  for  circular  economy 
aspects of the Green Deal. 

for 

these 

sectors.  However, 

Much-needed  reforms  to  tackle  greenhouse 
gas emissions are finally being adopted. Total 
greenhouse gas emissions excluding land use, land 
use change and forestry in 2019 were 14% above 
1990 level. Ireland’s domestic emissions exceeded 
its reduction target of 20% for non-ETS sectors for 
2020  by  a  very  large  margin,  and  even  if  all 
additional measures are implemented, as per WAM 
projections,  Ireland  would  not  reach  its  2030 
target 
these 
projections  do  not  yet  account  for  the  adopted 
climate  action  plan  in  2021  that  sets  a  national 
climate  neutrality 
target  by  2050  with  an 
intermediate  objective  of  reducing  total  GHG 
emissions  by  51%  by  2030  compared  to  2018 
legislation  establishes  a  strong 
levels.  The 
framework  for  climate  policy,  which 
includes 
drawing  up  economy-wide  and  sector-specific  5-
year carbon budgets on a rolling 15-year basis. It 
also  sets  out  an  obligation  to  revise  the  climate 
action  plan  on  an  annual  basis  and  makes 
government 
for 
delivering their carbon budgets and achieving their 
mitigation  targets.  Further,  Ireland  sets  out  a 
schedule  of  annual  increases  in  its  carbon  tax  to 
EUR  100  per  tonne  by  2030.  The  2021  climate 
action plan was adopted at the end of 2021. It is 
meant to be aligned with the 51% national target 
by 2030. It should serve as the basis for a revised 
national energy and climate plan.  

departments 

responsible 

planned 

objectives 

and 
Implementing 
measures  has  become  a  top  priority.  There 
has been progress on several important measures, 
including  those  that  support  the  deployment  of 
renewable power generation and the retrofitting of 
buildings.  However,  as 
the  Climate  Change 
Advisory  Council  highlighted  at  the  end  of  2021, 
however,  there  continues  to  be  a  significant  gap 

inflection  point 

between  definition  of  objectives  or  planning  of 
measures  and  their  implementation.  Therefore,  a 
genuine 
in  greenhouse  gas 
emissions still needs to be observed and there are 
major  challenges  ahead. 
Ireland 
allocates  42%  of  funding  under  the  RRP  is 
allocated to climate objectives and outlines crucial 
reforms  and  investments  to  further  the  transition 
to  a  more  sustainable,  low-carbon  and  climate-
resilient economy (38). 

its  RRP, 

In 

Ireland’s  performance  with  respect  to  fiscal 
indicators  supporting  the  EU  Green  Deal  is 
mixed.  While  its  environmental  tax  revenues  in 
terms of GNI are lower than the EU average, they 
are higher when expressing them as percentage of 
total tax revenues. Compared to the EU, Ireland is 
collecting  larger  share  of  transport  tax  revenues. 
However,  all  environmental  tax  revenues  are 
decreasing over time, both in terms of percentages 
and 
levels (see  Annex  18).  The  share  of 
expenditure  on  environmental  protection  in  total 
government  expenditure  is  lower  than  the  EU 
average and decreasing. 

Graph A5.1: Taxation and government expenditure 
on environmental protection 

Source: Eurostat 

Ireland  is  lagging  behind  in  using  renewable 
energy and 86% of its energy mix still relies 
on  natural  gas,  oil  and  petroleum.  While  in 
2020,  the  share  of  renewables in  its  gross  inland 
energy 
considerably, 
Ireland still needs to make considerable efforts to 
get back on track as regards its trajectory towards 
meeting  2030  renewable  and  energy  efficiency 
objectives. 2020 saw the first notable interruption 
in an almost continuous trend of increased energy 

consumption 

increased 

(38)  The share of financial allocation contributing to climate 

objectives has been calculated using Annex VI of the RRF 
Regulation. 

30 

0.01.02.03.04.05.06.07.0Environmental taxes (%of GDP)Environmental taxes (%of total taxation)Government expenditureon environmentalprotection (% of totalexpenditure)IE (2020)EU27 (2020) 
 
 
  
                                                 
 
 
Graph A5.3: Thematic - Biodiversity 
Terrestrial protected areas and organic farming 

use  over  the  previous  ten  years.  While  oil 
consumption  fell  considerably  due  to  the  COVID-
19 crisis (from 50% down to 45% of energy use), 
gas  use  increased  in  absolute  and  relative  terms 
reaching  33%  of  energy  use.  Ireland  required 
statistical  transfers  to  meet  its  2020  renewable 
requires  significant 
energy 
investment 
renewable  energy 
contribution  to  the  EU  2030  target  of  34%  of 
gross  final  energy  consumption  and  the  new, 
increased target of 80% renewable electricity.  

target,  and  still 
its 

reach 

to 

Graph A5.2: Thematic - Energy 
Share in energy mix (solids, oil, gas, renewables) 

For terrestrial protected areas data for 2018, and data for the 
EU average (2016, 2017) is lacking. 
Source: EEA (terrestrial protected areas) and Eurostat 
(organic farming) 

Air quality in Ireland continues to give cause 
for serious concern. The latest available annual 
estimates  by  the  European  Environment  Agency 
to  about  1,300  premature  deaths 
point 
particulate  matter 
attributable 
concentrations, 50 to ozone concentration and 30 
to nitrogen dioxide concentrations (39).  

fine 

to 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste. 
Source: Eurostat 

In  terms  of  biodiversity  and  ecosystem 
health,  Ireland  presents  a  mixed  picture.  By 
2021,  13.2%  of  the  national  land  area  of  Ireland 
was covered by Natura 2000 (EU average 18.1%), 
with  Special  Protection  Areas  (SPAs)  classified 
under  Birds  Directive  covering  6.2%  (EU  average 
12.8%)  and sites of community importance (SCIs) 
under  the  Habitats  Directive  covering  10.2%  (EU 
average  4.2%)  of  the  Irish  territory.  On  the  basis 
of  the  latest  update,  Ireland’s  terrestrial  Natura 
2000  network  under  the  Birds  and  Habitats 
Directive  is  now  considered  complete.  There  are 
significant  knowledge  and  designation  gaps  in 
Ireland’s  marine  Natura  2000  network,  especially 
under  the  Birds  Directive.  Delays  in  finalising  the 
list of SCIs, including for the habitat reefs, as well 
as  poor  progress  in  identifying,  selecting  and 
designating  SPAs  under  the  Birds  Directive  are 
particularly  concerning,  given  the  very  ambitious 
plans  for  developing  renewables 
in  offshore 
waters. The percentage of land covered by forests 
was  19%  in  2018,  well  below  EU  average  of 
43.5%. The share of organic farming is the second 
lowest  among  the  EU-27,  with  1.7%  in  2020, 
significantly below the EU average of 9.1%. 

The number of zero-emission passenger cars 
in the Irish fleet is growing dynamically, but 
the  density  of  public  charging  points 
struggles  to  keep  pace.  Just  over  100 
kilometres  of  railroads  are  electrified  in  Ireland, 
making it the EU country with the lowest share of 
electrification. The average number of hours spent 
in  road  congestion  per  year  by  a  representative 
commuting  driver  in  Ireland  is  high  and  has  been 
increasing in recent years.  

(39)  Please note that these figures refer to the impacts of 

individual pollutants, and to avoid double-counting cannot be 
added up to derive a sum. 

31 

020406080100200520102015201820192020Solid fossil fuels, peat and oil shaleOilGasNuclearRenewables01020302016201720192020Terrestrial protected areas (% total area)Area under organic farming (% total utilised agricultural area)EU27 (terrestrial)EU27 (organic) 
  
  
                                                 
Graph A5.4: Share of zero emission vehicles (% of 
new registrations) 

Zero emission vehicles (passenger cars) include battery and 
fuel cell electric vehicles (BEV, FCEV). 
Source: European Alternative Fuels Observatory 

32 

0.02.04.06.08.010.0201620172018201920202021% of new registrationsIEEU27 
  
 
Table A5.1: Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 

(1) The 2030 non-ETS GHG target is set in the Effort Sharing Regulation. The Fit for 55 targets are those in the Commission’s 
proposal to increase EU's climate ambition by 2030. Renewables and Energy Efficiency targets and national contributions under 
the Governance Regulation (Regulation (EU) 2018/1999). (2) Distance to target is the gap between Member States’ 2030 target 
under the Effort Sharing Regulation and projected emissions, with existing measures (WEM) and with additional measures (WAM) 
respectively, as a percentage of 2005 base year emissions. (3) Percentage of total revenues from taxes and social contributions 
(excluding imputed social contributions). Revenues from the ETS are included in environmental tax revenues (in 2017 they 
amounted to 1.5% of total environmental tax revenues at the EU level). (4) Covers expenditure on gross fixed capital formation to 
be used for the production of environmental protection services (i.e. abatement and prevention of pollution) covering all sectors, 
i.e. government, industry and specialised providers. (5) The climate protection gap indicator is part of the European adaptation 
strategy (February 2021), and is defined as the share of non-insured economic losses caused by climate-related disasters. 
(6) Sulphur oxides (SO2 equivalent), Ammonia, Particulates < 10µm, Nitrogen oxides in total economy (divided by GDP). 
(7) Transportation and storage (NACE Section H). (8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell 
electric vehicles (FCEV). (9) European Commission Report (2019) 'Benchmarking smart metering deployment in the EU-28'. 
(10) European Commission (2021). Each year the DESI is re-calculated for all countries for previous years to reflect any possible 
change in the choice of indicators and corrections to the underlying data. Country scores and rankings may thus differ compared 
with previous publications. 
Source: Eurostat, JRC, European Commission, EEA, EAFO 

33 

TargetTarget2005201920202030WEMWAM2030WEMWAMNon-ETS GHG emission reduction target (1)MTCO2 eq; %; pp (2)46.8-3%-6%-30%-25-8-42%-37-20200520162017201820192020Share of energy from renewable sources in gross final consumption of energy (1)%3%9%11%11%12%16%34%Energy efficiency: primary energy consumption (1)Mtoe14.914.714.414.614.713.413.7Energy efficiency: final energy consumption (1)Mtoe12.611.811.812.412.411.211.2201520162017201820192020201820192020Environmental taxes (% of GNI* for IE, % of GDP for EU)% of GNI*3.12.92.82.62.32.22.42.42.2Environmental taxes (% of total taxation)% of taxation (3)8.28.07.87.06.46.06.05.95.6Government expenditure on environmental protection% of total exp.1.561.621.571.561.561.391.661.701.61Investment in environmental protection% of GDP (4) 0.210.190.180.19--0.420.380.41Fossil fuel subsidiesEUR2020bn2.052.011.791.801.54-56.8755.70-Climate protection gap (5)score 1-4Net GHG emissions1990 = 100107111117119114106797669GHG emissions intensity of the economykg/EUR'100.300.320.300.280.260.210.320.310.30Energy intensity of the economykgoe/EUR'100.060.060.060.050.050.040.120.110.11Final energy consumption (FEC)2015=100100.0103.8104.6109.4109.398.7103.5102.994.6FEC in residential building sector2015=100100.0102.799.5106.2103.2112.0101.9101.3101.3FEC in services building sector2015=100100.0102.4102.2109.7113.1113.7102.4100.194.4Smog-precursor emission intensity (to GDP) (4)tonne/EUR'10 (6)0.740.750.710.660.58-0.990.93-Years of life lost caused due to air pollution by PM2.5per 100.000 inh.259254249335322-863762-Years of life lost due to air pollution by NO2per 100.000 inh.7126128-12099-Nitrate in ground watermg NO3/litre14.212.712.812.814.4-21.720.7-Terrestrial protected areas% of total-13.413.8-13.813.8-25.725.7Marine protected areas% of total-2.3--2.3--10.7-Organic farming% of total utilised agricultural area1.71.71.71.71.61.78.08.59.100-0606-1212-18Net land takeper 10,000 km213.011.05.0201520162017201820192020201820192020GHG emissions intensity of transport (to GVA) (7)kg/EUR'102.042.392.632.682.632.250.890.870.83Share of zero emission vehicles (8)% in new registrations0.40.30.51.03.14.51.01.95.4123510178812Share of electrified railways%5.75.75.75.35.3-55.656.0-32.134.035.035.336.0-28.928.8-YearIEEUShare of smart meters in total metering points (9) - electricity% of total20180.035.8Share of smart meters in total metering points (9) - gas% of total20180.013.1ICT used for environmental sustainability (10)%202167.265.9Progress to policy targetsNational contribution to 2030 EU targetIRELANDEU'Fit for 55'DistanceDistanceDigitalFiscal and financialindicators0.7 out of 4 (slight increase from historical level of 0.8). This is a low risk category (4 being a high risk).ClimateEnergyPollutionBiodiversity2000-20062006-20122012-201827.63.03.6MobilityNumber of plug-in electric vehicles per charging pointCongestion (average number of hours spent in road congestion per year by a representative commuting driver) 
 
   
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social  dimension. While  measures  in this  regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left  behind  and  all groups  in  society  benefit  from 
the  transition.  Ireland’s  green  economy  is  still 
its  development,  supported  by 
limited  and 
investments and reforms included in the RRP, can 
foster sustainable growth and quality job creation. 
At the same time, the green transition is expected 
to affect low- to middle-income groups to a larger 
extent.  

can 

green 

transition 

Ireland’s 
pose 
challenges,  which  call  for  reskilling  and 
upskilling  the  workforce.  Progress  has  been 
made  on  the  social  dimension  of  the  green 
transition,  notably  in  the  reduction  of  energy 
poverty  measured  in  terms  of  the  ability  to  keep 
houses warm. 

The  Irish  RRP  includes  a  measure  to  equip 
workers with green skills, aiming to improve 
their  employability.  The  SOLAS  recovery  skills 
response programme included in the plan provides 
training  courses,  among  other things,  on  skills  for 
green construction and climate change mitigation. 
The  scheme  focuses  on  people  who  have  been 
unemployed  for  more  than  6  months.  In  synergy 
with the RRF, the European Social Fund Plus (ESF+) 
and the Just Transition Fund are expected to help 
mitigate  the  social  impact  of  the  transition.  The 
negotiations between Ireland and the Commission 
on  how  to  best  use  the  ESF+  and  JTF  resources 
are  planned  to  conclude  by  the  end  of  2022. 
Ireland’s  2020  national  energy  and  climate  plan 
(NECP)  includes  references  to  a  fair  transition, 
including the set-up of a working group to identify 
transition  needs  among  different  cohorts  of 
workers,  businesses  and  communities.  While  the 
social,  employment  and  skills  impacts  of  the 
policies  presented  are  not  taken  into  account 
explicitly,  the  plan  commits  to  addressing  the 
impact of the transition on people living in carbon-
intensive regions, and to alleviating the burden of 
energy  poverty  on  the most  vulnerable  in  society. 
However,  the  NECP  does  not  include  a  specific 
target  for  reducing  energy  poverty  and  refers  to 
the  overall  at-risk-of-poverty  figures,  stating  that 
energy poverty is not a distinct type of deprivation 
in Ireland. 

Ireland's 

reduced 

The  economy  has 
its  carbon 
footprint,  although  the  transition  from 
carbon-intensive  energy  sources  will  pose 
challenges. The greenhouse gas (GHG) emissions 
intensity of the Irish economy decreased between 
2015  and  2020  (in  terms  of  gross  value  added) 
and stands at around 35% below the EU average, 
but  the  average  carbon  footprint  per  worker,  at 
23.19  tonnes  of  GHG  emissions,  is  still  relatively 
high (13.61 in the EU) (see Graph A6.1). Declining 
sectors  characterising  the  Irish  economy  include 
peat-  and  fossil  fuel-based  energy production (40). 
Despite a relatively low share of workers in energy 
intensive  industries  (1.39%  versus  3.06%  in  the 
transition  away  from  carbon-
EU), 
intensive  sources  of  energy 
towards  more 
sustainable, renewable energy sources is expected 
to  affect  jobs  in  the  Midlands  region  and  its 
electricity-generating 
industry,  with  up-  and 
reskilling of the workforce there being particularly 
important (41).  Employment  in  the  environmental 
goods  and  services  sector  is  still  relatively  low 
(1.7%  versus  2.2%  in  the  EU) (42)  and  wind  and 
solar energy potential, as well as energy efficiency 
improvements,  offer  further  opportunities  for 
green  jobs.  Ireland’s  green  transition  can  pose 
challenges,  which  call  for  reskilling  and  upskilling 
the  workforce.  Labour  shortages  in  sectors  linked 
to  the  green  transition  are  reported 
in  the 
construction and energy sector (Eurofound, 2021). 

(40)  SWD(2021) 275 final. 

(41)  2020 European Semester: Overview of Investment Guidance 
on the Just Transition Fund 2021-2027 per Member State 
(Annex D). 

(42)  There is currently no common EU-wide definition of green 
jobs. The environmental goods and services sector (EGSS) 
accounts only report on an economic sector that generates 
environmental products, i.e. goods and services produced for 
environmental protection or resource management. 

34 

 
 
                                                 
 
Graph A6.1: Fair green transition challenges 

potential  to  foster  progressivity  and  to  have  a 
positive  impact  on  the  disposable  income  of 
households in the lowest segments of the income 
distribution (46). 

Graph A6.2: Energy poverty by income decile 

Source: Eurostat 

Numbers are the normalised indicator performance, signifying 
factors relative to the EU27 average. 
Carbon inequality: average emissions per capita top 10% vs 
bottom 50% (2019) 
Source: Eurostat, World Inequality Database 

As  for  the  social  dimension  of  the  green 
including  ensuring  access  to 
transition, 
essential  transport  and  energy  services, 
Ireland  has  been  progressing  significantly  in 
the recent years. The share of the population at 
risk of poverty living in rural areas is relatively low 
(15%  versus  18.7%  in  the  EU)  and  decreasing 
(from  18.3%  in  2015) (43).  The  share  of  the 
population unable to keep their homes adequately 
warm  declined  significantly  from  9%  in  2015  to 
3.3%  in  2020,  which  is  below  the  EU  average 
(8.2%).  Middle-income  groups  are  affected  most 
(see  Graph  A6.2).  Consumption  patterns  vary 
across 
the  average  carbon 
footprint  of  the  top  10%  of  emitters  is  about  6 
times  that  of  the  bottom  50%  of  the  population 
(5.3 times in the EU). 

the  population; 

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (44). 
Ireland’s revenues from total  environmental taxes 
fell from 3.1% of GNI* in 2015 to 2.2%% of GNI* 
in 2020 (against the EU average of 2.24% of GDP 
in  2020).  The 
low-income 
tax  wedge 
earners (45) slightly increased from 20.5% in 2015 
to 21.4% in 2021, compared to 31.9% in the EU in 
2021  (see  Annex  18).  Redistributive  measures 
accompanying  environmental  taxation  have  the 

for 

(43)  As a proxy for potential transport challenges in the context of 

the green transition (see COM(2021) 568 final). 

(44)  COM(2021) 801 final. 

(45)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European 
Commission/OECD). 

(46)  SWD(2021) 641 final PART 3/3, on distributional effects of 

energy taxation revision, based on the European Commission 
Joint Research Centre GEM-E3 and EUROMOD models. 

35 

0.000.501.001.502.002.50GHG tonnes per Euroof gross added value(MS/EU)GHG tonnes perworker (MS/EU)Employment share inenergy-intensiveindustries (MS/EU)Share of populationin rural areas at riskof poverty (MS/EU)Energy poverty(MS/EU)Carbon inequality(MS/EU)IrelandEU 2020Ireland 20150%5%10%15%20%25%12345678910Unable to keep home adequately warm (per income decile)Income decileIrelandEuropean Union 
   
                                                 
   
 
 
 
 
 
                                                 
PRODUCTIVITY 
PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 

partly  explain  this  positive  trend.  However,  the 
recycling  rate  remains  significantly  below  the  EU 
average. In light of this, in November 2021, Ireland 
published  a  climate  action  plan,  which  includes 
specific  targets,  e.g.  reductions 
in  household 
waste,  landfill  use,  plastics  and  food  waste,  and 
sets  recycling  targets  for  municipal,  plastic  and 
packaging waste.  

A successful transition to a circular economy 
requires  social  and  technological  innovation 
as  Ireland’s  full  potential  regarding  the 
circular  economy  can  only  be  reached  if 
implemented  across  all  value 
chains. 
Therefore, eco-Innovation is an important enabling 
factor  for  the  circular  economy.  Product  design 
approaches and new business models can help to 
produce  systemic  circularity  innovations,  creating 
new  business  opportunities.  The  country  ranked 
14th  in  the  EU,  scoring  109  in  the  2021  Eco-
Innovation  Scoreboard,  hence  an  average  eco-
innovation  performance  status.  In  two  out  of  five 
components  of  the  Eco-innovation  index  of  2021, 
Ireland  performs  above  the  EU  average,  namely 
the  eco-innovation  activities  and 
resource 
efficiency  outcomes.  However,  its  performance  is 
below  the  EU  average  regarding  eco-innovation 
inputs, eco-innovation outputs and socio-economic 
outputs. 

while 

minimising 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
autonomy, 
the 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry 
clean 
creating  markets 
technologies  and  products.  It  will  have  an  impact 
across  the  entire  value  chains  in  sectors  such  as 
energy and transport, construction and renovation, 
food  and  electronics,  helping  create  sustainable, 
local and well-paid jobs across Europe. 

for 

by 

With  its  circular  material  use  rate  not 
reaching 2% in any recent years, standing at 
just  1.8%  in  2020  (compared  with  the  EU 
average  of  12.8%),  Ireland  displays  the 
second-worst  performance  in  the  EU.  While 
the  domestic  economy’s  structure  and 
the 
island  at  the  EU’s 
country’s 
geographic  periphery  are  among  the  factors  that 
explain  this  scenario,  a  dedicated  government 
policy  was  also  lacking  until  recently.  The  2021 
Whole  of  Government  Circular  Economy  Strategy 
aims  to  significantly  improve  Ireland’s  circular 
material use rate so that it can rise above the EU 
average by the end of the decade. 

location  as  an 

improved 

domestic  material 

Ireland  has  considerably 
its 
resource  productivity  over  the  last  decade, 
on  account  of  very  dynamic  GDP  growth, 
while 
consumption 
remained  basically  flat.  Its  performance  is  far 
superior  to  the  EU  average  (2.82  pps  generated 
per  kg  of  material  consumed,  versus  the  EU 
average  of  2.23  pps  per  kg  in  2020),  but  caution 
should be exercised in this regard: the very strong 
presence  of  multinationals  in  the  Irish  economy 
renders  as  misleading  the  representation  of  the 
complexity  of  economic  activity  by  a  single 
headline  indicator  such  as  GDP.  An  alternative 
indicator  devised  by  the  national  statistics  office 
(the  ‘modified  Gross  National  Income’)  revolves 
around  60%  of  the  headline  GDP  figure,  in  which 
case  Ireland’s  performance  is  close  to  the  EU 
average.  

The generation of waste per capita in Ireland 
has decreased since 2016. In the meantime, the 
increase  of  both  GDP  and  population  indicates  a 
decoupling  trend  between 
Ireland’s  economic 
growth and the generation of waste. The stringent 
implementation  and  repeated  update  of  the 
national  Waste  Prevention  Programme  might 

36 

 
 
 
 
 
Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

37 

SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)2.42.32.32.42.42.82.22020Material Intensity (kg/EUR)0.40.40.40.40.40.40.42020Circular Material Use Rate (%)1.91.71.71.61.61.812.82020Material footprint (Tones/capita)16.018.018.420.224.1-14.62019Waste Waste generation (kg/capita, total waste)-3207-2874--52342018Landfilling (% of total waste treated)-24.9-17.1--38.52018Recycling rate (% of municipal waste)-40.740.437.637.440.447.82020Hazardous waste (% of municipal waste)-3.5-4.5--4.32018CompetitivenessGross value added in environmental goods and services sector (% of GDP)0.70.80.90.90.9-2.32019Private investment in circular economy (% of GDP)------0.12018Latest year EU 27 
 
   
 
ANNEX 8: DIGITAL TRANSITION 
ANNEX 8: DIGITAL TRANSITION 

The Digital Economy and Society Index (DESI) 
monitors EU Member States’ digital progress. 
The  areas  of  human  capital,  digital  connectivity, 
the 
technologies  by 
businesses  and  digital  public  services  reflect  the 
Digital  Decade’s  four  cardinal  points (47).  This 
Annex describes Ireland’s DESI performance. 

integration  of  digital 

to 

Ireland’s  RRP,  despite  a  relatively  modest 
financial envelope (EUR 989 million), includes 
measures 
digital 
support 
transformation.  These  measures  represent  32% 
of  the  plan’s  financial  allocation  and  concern  all 
DESI  dimensions,  with  a  special  focus  on 
digitalising  public  services  and  businesses,  and 
improving digital skills (48).  

the 

Ireland  scores  high  concerning  all  indicators 
in  the  DESI  dimension  on  human  capital.  In 
Ireland  the  share  of  the  population  that  has  at 
least basic digital skills and the percentage of ICT 
specialists and female ICT specialists is above the 
EU average. 

in  the  area  of 
Ireland  performs  well 
connectivity.  For  instance,  Ireland  scores  above 
the  EU  average  both  in  fixed  (optical  fibre)  and 
wireless (5G) broadband coverage, but assignment 
of  5G  spectrum  is  low  (29%  compared  to  the  EU 
average of 56%) (49). 

in 

Ireland  has  integrated  digital  technology 
well. The share of SMEs with at least a basic level 
of  digital  intensity  is  above  the  EU  average. 
Businesses 
taking 
advantage  of  available  digital  technologies.  For 
example, the use of big data and cloud are above 
the  EU  average  and 
Ireland  uses  artificial 
intelligence  as  much  as  other  EU  countries  on 
average. 

Ireland  are  good  at 

The  public  services  in  Ireland  are  highly 
digitalised.  This  is  true  for  the  services  provided 
to businesses as well as to the general public.  

(47)  2030 Digital Compass: the European Way for the Digital 

Decade Communication, COM (2021) 118 final 

(48)  The share of financial allocation contributing to digital 

objectives has been calculated using Annex VII of the RRF 
Regulation. 

(49)  Source: Communications Committee (COCOM) based on 

iDATE. 

38 

 
 
                                                 
 
Table A8.1: Key Digital Economy and Society Index Indicators 

(*) The 5G coverage indicator does not measure users’ experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 
Source: Digital Economy and Society Index 

39 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA70%54%79%% individuals202120212021ICT specialists4.9%5.7%6.3%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists21%21%20%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage35%83%89%70%100%% households201920202021202120215G coverage (*)NA30%72%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA64%55%86%% SMEs202120212021Big data20%23%23%14%31%% enterprises20182020202020202020CloudNANA47%34%69%% enterprises202120212021Artificial IntelligenceNANA8%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA8075100Score (0 to 100)202120212021Digital public services for businessesNANA10082100Score (0 to 100)202120212021Ireland 
 
 
 
  
 
ANNEX 9: INNOVATION 
ANNEX 9: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  the  Irish  research  and 
innovation system.  

in 

the 

Ireland 

reflected 

In  the  2021  edition  of  the  European 
Innovation  Scoreboard (50), 
still 
belongs  to  the  group  of  strong  innovation 
performers,  although  it’s  ranking  has  fallen 
in  recent  years.  Despite  a  relatively  well-
developed  R&I  system,  Ireland  still  suffers  from 
low R&D intensity (51). A strong public science base 
level  of  high-quality 
is 
in  science  and 
publications,  new  graduates 
engineering,  and  employment 
in  fast-growing 
companies.  However,  weaknesses  persist  in  the 
financing  of  R&D,  which  is  not  at  the  expected 
Ireland’s  stage  of 
level  for  an  economy  at 
development.  R&D 
intensity  has  been  on  a 
declining  trend  since  2010,  while  public  R&D 
intensity,  at  0.32%,  is  one  the  lowest  in  the  EU. 
While  the  tax  credit  provides  valuable  support  to 
business  expenditure  on  R&D  and  changes  have 
made it more attractive for SMEs, more priority for 
direct funding instruments could help to stimulate 
research  and 
the 
innovation  and 
productivity of Irish firms, especially SMEs.  

improve 

The  reforms  and  investments  underpinning 
Ireland’s  RRP  can  be  expected  to  help 
increase  the  overall  R&D 
intensity.  The 
National  Grand  Challenge  measure  uses  a 
support 
challenge-based 
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,  and  facilitate  the 
green and digital transition.  

funding  model 

to 

(50)  2021 European Innovation Scoreboard, Country profile: 

Ireland  

https://ec.europa.eu/docsroom/documents/45919   

(51)  Ireland came only 19th in the EU in 2020 in terms of R&D 

intensity measured against GDP, although this is affected by 
issues relating to the composition and measurement of 
Ireland’s GDP. In terms of modified GNI (GNI*), which 
excludes distortions from foreign-owned firms, Ireland has a 
R&D intensity of 2.20%. 

40 

 
 
                                                 
 
Table A9.1: Key research, development and innovation indicators 

Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

41 

CompoundEUannual growthaverage2010-20R&D Intensity (GERD as % of GDP)1.601.181.171.231.23-2.52.32Public expenditure on R&D as % of GDP0.500.330.320.310.32-4.30.78Business enterprise expenditure on R&D (BERD) as % of GDP1.100.850.850.910.91-1.81.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 11.512.411.4::-0.29.9PCT patent applications per billion GDP (in PPS)2.61.8:::-6.33.5Public-private scientific co-publications as % of total publications7.910.410.69.59.11.59.05New graduates in science & engineering per thousand pop. aged 25-3417.818.221.624.1:9.816.3Total public sector support for BERD as % of GDP0.180.3160.1490.213:1.90.196R&D tax incentives: foregone revenues as % of GDP0.1340.2690.1090.177:3.20.100Share of environment-related patents in total patent applications filed under PCT (%) 9.19.0 8.1::-1.612.8Venture Capital (market statistics) as % of GDP0.0420.0440.0720.0600.0766.20.054Employment in fast-growing enterprises in 50% most innovative sectors6.67.110.810.8:5.75.5Finance for innovation and Economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2020Ireland2010201520182019 
 
 
 
   
 
ANNEX 10: INDUSTRY AND SINGLE MARKET 
ANNEX 10: INDUSTRY AND SINGLE MARKET 

Compared to the EU, SMEs in Ireland are less 
affected  by  the  burden  of  regulation, 
administrative  procedures  and  changing 
legislation.  In  addition,  in  its  RRP  Ireland  has 
committed  to  introducing  the  SME  test,  which  is 
expected  to  help  limit  regulatory  obstacles  faced 
by  SMEs.  Nevertheless,  Irish  SMEs  have  been 
seriously  affected  by  the  COVID-19  crisis:  value 
added  dropped  by  11.5%,  employment  fell  by 
2.3%,  and  losses  were  incurred  in  over  30%  of 
SMEs, with a further 30% barely breaking even (53). 
The  significant  disruptions  observed  are  mainly 
due to the over-reliance on a small customer base, 
but also to a relative lack of financial support, thus 
rendering additional and targeted financial support 
to the SME sector necessary. Ireland’s RRP includes 
the  digitalisation  of 
a  measure 
companies,  particularly  SMEs, 
the 
(including 
establishment  of  Irish  European  digital  innovation 
hubs), 
their 
innovation,  expand  market  presence,  boost 
productivity 
increase 
competitiveness. 

to  accelerate 

is  expected 

to  support 

ultimately 

that 

and 

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
and 
economic 
convergence over the long run. A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning single market, where fair and effective 
competition  and  a  business-friendly  environment 
are  ensured, 
in  which  small  and  medium 
enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity levels, employment, and turnover and 
entry/exit  rates.  This  may  impact  the  Member 
States’  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

to 

these 

underlying 

is  partly  due 

Ireland  displays  the  best  labour  productivity 
performance  in  the  EU  in  terms  of  GDP  per 
hour  worked.  This 
the 
methodology 
statistics, 
particularly  the  impact  of  a  very  strong  presence 
of  multinationals.  Ireland’s  performance  remains 
above  the  EU  average,  but  below  that  of  certain 
Member  States,  if  the  statistical  influence  of 
is  corrected.  The  structure  of 
multinationals 
Ireland’s  economy,  largely  focused  on  services, 
also  contributes  to  its  good  labour  productivity 
performance  (see  Annex  19).  This  should  not 
deflect  attention  from  the  challenges  facing  the 
manufacturing  sector,  which  is  significantly  more 
concentrated 
the  services  sector  and 
therefore  exposed  to  a  higher  volatility  of  total 
factor  productivity.  Therefore,  a  more  balanced 
and  diversified  company  base  is  critical  for  the 
country’s sustained competitiveness in the future. 

than 

While the Irish economy is relatively prone to 
suffering externally-driven shocks, it showed 
remarkable  resilience  in  the  face  of  the 
double  challenge  of  the  pandemic  crisis  and 
Brexit.  Ireland’s  reliance  on  extra-EU  sources  of 
value  added  is  considerably  higher  than  the  EU 
average.  Nonetheless, 
resilience  can  be 
industrial  structure 
explained  by 
(where  sectors,  e.g.  automotive,  affected  by 
international  supply  chain  disruptions  are  under-
reorientation  of 
the  swift 
represented)  and 
traditional 
towards 
trade  flows  with  Britain 
Northern  Ireland.  However,  the  Irish  business 
community  at  large  remains  wary  of  potential 
supply chain problems in the near future (52). 

its 
its  national 

(52)  Institute of Directors in Ireland (2021) Inflation and Supply 
Chain Issues Seen as Significant Concern for Majority of 

Business Leaders https://www.iodireland.ie/resources-
media/media-hub/news/inflation-and-supply-chain-issues-
seen-as-significant-concern-for-majority-of-business-leaders  

(53)  ESRI (2021) New survey evidence on COVID-19 and Irish 

SMEs: Measuring the impact and policy response 
https://www.esri.ie/publications/new-survey-evidence-on-
covid-19-and-irish-smes-measuring-the-impact-and-policy-
0  

42 

 
 
                                                 
                                                                              
 
Table A10.1: Key single market and industry indicators 

(Continued on the next page) 

43 

SUB-POLICY AREAINDICATOR NAMEDESCRIPTION20212020201920182017Growth ratesEU27 average*Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]41,5962,6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]21,419,7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]3717,6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]n.a.n.a.n.a.n.a.n.a.n.a.127,3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]3699119300%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]239171611109%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]n.a.5,4%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0,150,140,150,160,17-12%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]44,7043,3039,5037,4020%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]11,527,92,47,847,4%2,6%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]110,80,5100%0,4%HEADLINE INDICATORSEconomic structureRESILIENCEShortages/supply chain disruptionsStrategic dependenciesInvestment dynamics 
 
 
  
 
Table (continued) 

(*) latest available  
Source: See above in the table the respective source for each indicator in the column "Description" 

44 

Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]0,730,650,600,620,6219%1,59Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])2   20%3,37Professional qualifications recognitionRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]44,145%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageOn averageOn averageBelow averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]On averageBelow averageOn averageBelow averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]7856%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.70.1 (2020)Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]93,1118,7117112,4-17.2%105,6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]34,939,343,2n.a.n.a.-19%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0,420,390,240,19116,8%0.56 (2020)EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0,130,20,190,43-70,6%0.18 (2020)% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]10,213,311,310,413,1-22.0%12,4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]7364726414,1%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]7776797010%70,8%Business demographyAccess to financeBUSINESS ENVIRONMENT - SMEsPublic procurement SINGLE MARKETCompliance - cooperation EC and MS 
 
  
 
ANNEX 11: PUBLIC ADMINISTRATION 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services  and  contribute  to  building 
resilience  for  the  sustainable  development  of  the 
EU economy.  

Public administration effectiveness in Ireland 
is  ranked  high  in  the  EU-27 (54).  A  newly 
adopted  long-term  strategy (55)  will  steer  the 
continuous  improvement  of  the  civil  service’s 
capability  (i.e.  that  of  government  departments 
and  certain  state  agencies)  to  support  the  public 
service’s  sectors  (e.g.  health,  education,  social 
services,  and  utilities)  to  achieve  their  objectives, 
step up reforms and deliver quality outcomes. The 
strategy outlines three priority areas: (i) delivering 
evidence-informed  policy  and 
(ii) 
harnessing  digital  technology  and  embedding 
innovation,  and  (iii)  building  the  civil  service 
workforce,  workplace,  and  organisation  of  the 
future.  

services, 

Graph A11.1: Performance on evidence-based 
policy making indicators 

assessments and policy evaluations, relatively low 
oversight  of  the  systemic  use  of  the  regulatory 
tools  and  limited  transparency  of  the  public 
consultations.  Ireland  intends  to  further  boost 
policy  quality  by  developing  foresight  capabilities. 
The  RRP  contains  a  measure  to  improve  the 
efficiency  of  data  collection  and  analysis  by 
digitalising  the  census  process,  which  also  has  a 
reuse potential  for any large-scale data collection 
by public authorities. 

Performance  on  the  e-government  indices  is 
mixed.  Ireland  scores  above  the  EU  average 
regarding  the  following  key  dimensions:  user 
centricity,  transparency  and  cross-border  services. 
However,  the  availability  of  key  enablers  in  the 
country to provide digital public services is low (56). 

Ireland ranks above the average in the Single 
Market  Scoreboard  public  procurement 
for 
indicator.  However, 
improvement  given  the  relatively  low  share  of 
procurement  advertised  on  the  European  public 
procurement  journal  ‘tenders  electronic  daily’  and 
low  scores  in  indicators  measuring  and  quality  of 
information in procurement (Table A11.1). 

there 

room 

is 

Table A11.1: Performance on the single market 
public procurement indicator 

RIA: regulatory impact assessment 
Source: OECD (iREG indicators) 

There  is  room  for  strengthening  evidence-
based policymaking. This applies in particular to 
stakeholder consultation and ex post evaluation of 
legislation (Graph A11.1). Despite the well-defined 
rules, the regulatory system scores low due to the 
impact 
lack  of  central  coordination  of 

the 

The competition and transparency indicators are triple-
weighted, whereas the efficiency and quality indicators have 
unitary weights. All others receive a 1/3 weighting in the SMS 
composite indicator. 
Source: Single Market Scoreboard 2020 data 

Participation  of  civil  servants 
in  adult 
learning is below EU-27 average. There is also 
relatively  low  gender  parity  in  senior  civil  service 
positions. Ireland is taking measures to ensure the 

(54)  Worldwide Governance Indicators, 2020.  

(56)  eGovernment benchmark 2021 | Shaping Europe’s digital 

(55)  Civil Service Renewal 2030.  

future (europa.eu). 

45 

00.20.40.60.811.21.41.61.8IEEU27averageIEEU27averageMethodologyRIAOversightStakeholder consulationSystematic adoptionEx-post evaluationTransparencyIrelandCompetition & TransparencyEfficiency & QualitySingle bidderCooperative procurementNo calls for bidsAward criteriaPublication rateDecision speedSME ParticipationData QualitySME contractorsMissing call for bidsSME bidsMissing seller registration #Procurement by lotsMissing buyer registration # 
 
     
                                                 
 
   
 
                                                 
 
Table A11.2: Public administration indicators 

(1) High values stand for good performance barring indicators # 7 and 8. 
(2) Break in the series in 2018 and 2021. 
(3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. 
(4) Break in the series in 2021. 
(5) Defined as the absolute value of the difference between the share of men and women in senior civil service positions.  
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal Governance 
Database (# 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single Market 
Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12). 

civil  service  has  adequate  skills  and  to  address 
ageing.  It  has  been  piloting  the  use  of  strategic 
planning  of  the  civil  service  workforce,  and 
developing  plans  for  advancing  specialised  skills 
for  managing  investments,  innovation,  foresight, 
etc.  

The lack of comparative data does not allow 
the  efficiency  of  the  Irish  judicial  system  to 
be assessed. Based on the 2020 Annual report of 
length  of 
the  Courts  Service, 
proceedings  in  the  High  Court  in  2020  was  660 
days,  a  decrease  of  125  days  from  2019.  The 
overall  quality  of  the  justice  system  is  good. 
However,  the  number  of  judges  remains  low,  the 

the  average 

resources  available  for  training  judges  appear 
limited  and  the  justice  system  could  be  further 
digitalised.  As  regards  judicial  independence,  no 
systemic deficiencies have been reported. (57). 

(57)  For more detailed analysis of the performance of the justice 
system in Ireland, see the 2022 EU Justice Scoreboard 
(forthcoming) and the country chapter for Ireland in the 
Commission’s 2022 Rule of Law Report (forthcoming). 

46 

IE20172018201920202021EU27167.064.067.067.092.070.82nananana70.770.93nananana95.281.1468.268.268.268.2na56.8561.161.062.365.967.955.3610.715.715.511.815.918.6740.037.435.433.833.421.8821.621.723.722.221.221.390.670.670.670.67na0.72101.11.11.11.1na1.5112.72.72.72.7na-0.7121.25nana1.16na1.7E-government Public Financial Management Evidence-based policy makingIndicator (1)Medium term budgetary framework indexStrength of fiscal rules indexPublic procurement composite indicatorShare of individuals who used internet within the last year to interact with public authorities (2)2021 e-government benchmark´s overall score (3) 2021 open data maturity indexScope Index of Fiscal InstitutionsShare of public administration employees with tertiary education, levels 5-8  (4)Index of regulatory policy and governance practices in the areas of stakeholder engagement, Regulatory Impact Assessment (RIA) and ex post evaluation of legislation Educational attainment level, adult learning, gender parity and ageingOpen government and independent fiscal institutionsParticipation rate of public administration employees in adult learning (4)Gender parity in senior civil service positions (5)Share of public sector workers between 55 and 74 years (4) 
                                                 
 
   
 
FAIRNESS 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living conditions 
in the EU. The implementation of its 20 principles 
on  equal  opportunities  and  access  to  the  labour 
market,  fair  working  conditions,  social  protection 
and inclusion, supported by the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction, will strengthen the EU’s drive towards a 
digital,  green  and  fair  transition.  This  Annex 
provides  an  overview  of  Ireland’s  progress  in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights. 

Table A12.1: Social scoreboard for Ireland 

Update of 29 April 2022. Member 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 2022. Due to changes in the 
definition of the individuals' level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 
Source: European Commission 

While  employment  is  already  above  pre-
pandemic levels, it remains important to help 

to 

investments 

low  of  9.8% 

Ireland’s  employment 

under-represented  groups, 
e.g.  women, 
people  with  low  skills,  single  parents  and 
people  with  disabilities,  integrate  into  the 
labour  market. 
rate 
bounced  back  strongly  since  the  outbreak  of  the 
COVID-19  pandemic,  and  was  above  the  EU 
average,  at  78% in  Q4-2021.  Similarly,  the  share 
of  young  people  not 
in  employment  nor  in 
education  or  training  (NEETs)  decreased  to  a 
in  2021.  The  gender 
record 
employment  gap  (20-64  year  olds)  stood  at  10% 
in  2021,  slightly  below  the  EU  average.  However, 
continued  reforms  and 
in  early 
childhood  education  and  care  policies,  and 
(with  women 
targeted  activation  measures 
currently  being  overrepresented  among 
the 
inactive)  will  be  needed 
improve  equal 
opportunities.  The  country  continues  to  have  one 
of the EU’s highest cost levels for early childhood 
education  and  care.  The  participation  in  formal 
childcare  among  children  less  than  3  years  old  is 
limited,  with  few  children  attending  childcare  for 
more than 30 hours a week (11.8% versus 19.5% 
in  the  EU).  While  the  rate  of  people  living  in  very 
in 
low  work 
previous  years,  in  2020  their  share  was  still  at 
11.5%, among the highest in the EU. Furthermore, 
less  than  a  third  of  people  with  disabilities  were 
employed  in  2019,  with  a  disability  employment 
gap  of  38.6  pps  recorded  for  2020,  which  is  also 
one  of  the  highest  in  the  EU.  Irish  single  parent 
households  have  the  lowest  employment  rates 
(64%)  in the  EU  (74.2%), as  well  as  compared to 
other  household  types  in  Ireland.  This  is  further 
reflected  in  their  high  poverty  rates  (see  below). 
The  ESF+  programme  will  focus  on  supporting 
unemployed  people,  in  particular  people  who  are 
long-term  unemployed  and  unemployed  young 
people, and helping those economically inactive to 
return  to  the  labour  market.  The  SOLAS  recovery 
the  work 
skills 
placement experience programme, both part of the 
RRP,  should  help  improve  the  employability  of  all 
those who lost their job due to the health crisis. 

intensity  households  decreased 

response  programme  and 

Ireland is performing well in preventing early 
school leaving and on educational outcomes. 
The early school leaving rate stood at around 3.3% 
in  2021,  one  of  the  lowest  in  the  EU.  Ireland  has 
taken extensive measures to mitigate the negative 
impact of COVID-19 at all levels of education. The 
share  of  adults  aged  25-64  participating  in 

47 

3.3709.810.04.174.96.21.8110.320.023.653.938.64.522.92.0Critical situationTo watchWeak but improvingGood but to monitorOn averageEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020)Individuals' level of digital skills (% of population 16-74) (2021)Dynamic labour markets and fair working conditionsSocial protection and inclusionAt risk of poverty or social exclusion for children (in %) (2020)Disability employment gap (ratio) (2020)Better than averageAt risk of poverty or social exclusion (in %) (2020)Employment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021)Long term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)Best performersImpact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020)Self-reported unmet need for medical care (% of population 16+) (2020)Housing cost overburden (% of population) (2020) 
 
 
 
   
 
 
 
learning  (over  the  past  4  weeks)  is  above  the  EU 
average  (11%  versus  9.2%  in  2020).  Ireland 
performs  well  on  digital  skills,  in  particular  the 
share  of  people  with  at  least  basic  digital  skills 
stood  at  70%  in  2021,  above  the  EU  average  of 
54%.  The  10-year  Adult  Literacy,  Numeracy  and 
Digital  Literacy  Strategy  aims  to  increase  this  to 
80% and to help the country achieve the 2030 EU 
headline target on skills. 

(33.9%  versus  20%). 

The  share  of  people  at  risk  of  poverty  or 
social exclusion decreased over the previous 
in  relation  to  the 
decade.  Concerns  remain 
availability  of  social  services  for  disadvantaged 
groups,  and  the  situation  for  homeless  people, 
people with disabilities, single parent and low work 
In  2020,  people  with 
intensity  households. 
disabilities had an almost 14 pps higher chance of 
being at risk of poverty or social exclusion than the 
general  population 
In 
addition,  56.9%  of  single parent  households  were 
at  risk  of  poverty  or  social  exclusion,  nearly  three 
times  higher  than  the  general  population.  Even 
though poverty among children decreased over the 
recent years to 23.6% in 2020, Ireland is required 
to  earmark  5%  of  its  total  ESF+  allocation  to 
combat  child  poverty,  as  the  at-risk-of-poverty  or 
social-exclusion  rate  for  children  was  consistently 
higher  than  the  EU  average  in  2017-2019.  The 
lack of social housing (61 880 households were on 
the  waiting  list  in  2020),  together  with  surging 
rental  prices  added  to  the  ongoing  structural 
housing  crisis  in  Ireland.  The  Housing  for  All  and 
Housing  First  plans  are  expected  to  help  mitigate 
the problem, but the pandemic and the scarcity of 
labour in the construction sector are slowing down 
the  implementation  of  these  plans.  Improving  the 
provision  of,  and  access  to,  social  services  for 
disadvantaged  groups  will  be  key  for  Ireland  to 
achieve  the  2030  EU  headline  target  on  poverty 
reduction.  

48 

 
 
ANNEX 13: EDUCATION AND SKILLS 
ANNEX 13: EDUCATION AND SKILLS 

This  Annex  outlines  the  main  challenges  for 
Ireland’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training Monitor. While Ireland overall performs 
well in equipping students with basic skills, equity 
can  be  at  risk  due  to  COVID-19.  Challenges 
regarding  the  affordability  and  quality  of  early 
childhood  education  and  care  (ECEC)  are  being 
addressed. Concerns over the continued decreased 
investment  in  higher  education  persist  while  the 
financing reforms are being prepared. 

Participation 
in  ECEC  remains  high  but 
limited  in  terms  of  time  spent.  Although  the 
participation  rate  for  children  aged  3  and  over 
continues  to  be  estimated  at  100% (58),  Irish 
children spend less time in formal ECEC than those 
in  other  EU  countries.  The  average  number  of 
weekly  hours  spent  in  formal  ECEC  for  children 
over 3 is 25.5 hours, while the EU average is 29.5 
hours. For children under 3, it is 22.6 hours, while 
the EU average is 27.4 hours (59). 

While  relevant  reforms  are  ongoing,  the 
affordability and quality of ECEC may still be 
improved.  Analysis (60)  showed  that  the  market-
driven  nature  of  the  sector  and  the  low  level  of 
public  funding  have  resulted  in  low  wages,  poor 
working  conditions  for  staff  and  high  fees  for 
parents. While the ECEC sector for children aged 3-
5  is  supported  by  a  national  programme,  the 
home-based  childcare  sector  for  children  under  3 
remains  largely  unregulated.  First  5  (2019-2028) 
is the key strategy for improving the ECEC quality, 
accessibility  and  affordability.  The  national 
financial  support 
childcare  scheme  provides 
towards 
the  cost  of  ECEC  and  school-age 
childcare.  However,  issues  arose  around  parent 
participation  and  uptake,  with  a  gap  affecting 

the 

reports,  on 

parents  lacking  literacy  or  fluency  in  English  or 
holding  refugee  or  immigrant  status (61).  The 
National Action Plan for Childminding (2021-2028) 
sets out the reform of home-based childcare. Two 
recently  published 
funding 
model (62)  and  the  workforce (63),  outline  the  key 
reforms  that  aim  to  transform  the  relationship 
between  the  State,  the  services  and  the  workers, 
shifting away from a predominantly private model 
to  a  new  hybrid  model  that  increasingly  will  be 
publicly  funded  and  publicly  managed.  For  2022, 
Ireland has committed to introducing a package of 
measures,  which,  among  other  things,  aim  to 
improve pay and conditions in the sector, improve 
quality  of provision, and reduce costs for parents. 
Furthermore,  pre-existing  ECEC  staff  retention 
issues were aggravated by the pandemic. 

into 

poorer 

translating 

While  Ireland  performs  well  in  basic  skills, 
there are emerging concerns over equity, due 
to,  among  other  things,  COVID-19.  Evidence 
suggests that the pandemic had a disproportionate 
impact  on  socio-economically  disadvantaged 
families, 
student 
engagement  in  schools  supported  by  the  national 
programme for supporting equality of opportunity 
in  schools  (DEIS)  than  in  non-DEIS  schools  has 
widened (64).  Measures  were  put 
in  place  to 
mitigate  against  the  negative  effects  of  the 
pandemic  on  teaching  and  learning,  including  the 
provision  of  extra  teaching  hours  for  schools 
through a COVID Learning and Support Scheme in 
the  2021/22  school  year.  Funding  was  also 
provided  for  summer  programmes  in  2020  and 
2021.  Analysis (65)  showed  that  there  has  been  a 
slight decline in the total number of students with 
special educational needs in schools, although the 
number  of  children  in  special  classes  within 

(61)  Frontier Economics (2021), 12-month review of the National 

Childcare Scheme. 

(62)  Department of Children, Equality, Disability, Integration and 

Youth (2021) Partnership for the Public Good: A new Funding 
Model for Early Learning and Care. 

(58)  For Ireland, the ECE rate includes participation in ECEC 

(63)  Department of Children, Equality, Disability, Integration and 

centres, and also in primary schools, which are attended by 
many 4-5 year olds. 

Youth (2021) The Workforce Plan for Early Learning and Care 
and School-Age Childcare 2022-2028. 

(59)  European Commission/EACEA/Eurydice (2019) Key Data on 

Early Childhood Education and Care in Europe – 2019 Edition. 
Eurydice Report.  

(60)  OECD (2021), Strengthening Early Childhood Education and 
Care in Ireland: Review on Sector Quality, OECD Publishing, 
Paris, https://doi.org/10.1787/72fab7d1-en ; European 
Commission/EACEA/Eurydice, 2019. Key Data on Early 
Childhood Education and Care in Europe – 2019 Edition. 
Eurydice Report.  

(64)  Mohan, G. et al. (2021) Magnifying Inequality? Home learning 
environments and social reproduction during school closures 
in Ireland, Irish Educational Studies, 40(2): 265-274. 
https://www.tandfonline.com/doi/full/10.1080/03323315.20
21.1915841  

(65)  European Commission (2021), European Semester 2020-

2021 country fiche on disability equality. Ireland 
https://op.europa.eu/en/publication-detail/-
/publication/16883c15-a719-11eb-9585-01aa75ed71a1  

49 

 
 
                                                 
                                                 
 
Table A13.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: The 2018 EU average on PISA reading performance does not include ES; e = estimated, u = low reliability, : = not available; 
Data are not yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills, exposure of vocational educational training graduates to work based learning and participation 
of adults in learning. 
Source: Eurostat (UOE, LFS); OECD (PISA).  

mainstream schools or attending special schools is 
steadily  increasing.  This  may  indicate  a  trend 
towards  more 
settings.  New 
segregated 
investments in special educational needs supports 
in  ECEC  and  school  education  have  been  made, 
and  the  School  Inclusion  Model  aims  to  provide  a 
comprehensive  range  of  supports  to  enable  all 
students  to  attend  mainstream  settings.  The 
proportion  of  young  people  aged  16-19  having 
basic  or  above  basic  digital  skills  has  increased 
since  2015,  but  remains  slightly  below  the  EU 
average  (77%  v  EU  82%). 
In  2019,  public 
expenditure  on  education  was  5.52%  of  the  GNI* 
specifically  adapted  to  Ireland.  However,  as  a 
share  of  GDP  it  was  3.1%,  far  below  the  EU 
average  (EU  4.7%).  In  response  to  the  COVID-19 
pandemic,  large-scale  emergency  funding  was 
provided for all levels of education. 

The  tertiary  educational  attainment  rate 
continues  to  grow 
in  the  context  of 
longstanding  concern  as  regards  funding.  In 
2021, the tertiary attainment rate grew sharply by 
3.3 pps compared to 2020 to reach 61.7% among 
the  population  aged  25-34,  the  second  highest 
rate in the EU. However, between 2011 and 2019, 

general  government  expenditure  on  higher 
education dropped by 14% in real terms. Students’ 
fees  are  high,  which  also  creates  accessibility 
issues. To address the challenge, a landmark policy 
on  funding  the  sector  and  reducing  the  costs  for 
students and families has been published (66), and 
implementation  process  will  be  established  in 
2022 (67).  The  RRP  supports  the  development  of 
technological universities. 

The inflow of people fleeing Ukraine requires 
efforts  from  the  education  and  training 
system.  Once 
they  are  granted  Temporary 
Protection,  they  are  entitled  to  seek  vocational 
training  education  activities  in  Ireland.  Ukrainian 
teachers  will  be 
the 
registration process to allow them to teach in Irish 

fast-tracked 

through 

(66)  Department of Further and Higher Education, Research, 
Innovation and Science (2022) Future funding in higher 
education. https://www.gov.ie/en/press-release/11787-
landmark-policy-funding-higher-education-reducing-cost-for-
families/#sustainable-funding-model-for-higher-education  

(67)  Breslin, J. (2021) ‘The tertiary education landscape’, Ireland’s 

Education Yearbook 2021.  
https://irelandseducationyearbook.ie/downloads/IEYB2021/YB
2021-Higher-Education-01.pdf  

50 

96%78.7%91.9%100.0%2019, e92.8%2019Reading< 15%10.2% 20.4%11.8%201822.5%2018Mathematics< 15%15.0% 22.2%15.7%201822.9%2018Science< 15%15.3% 21.1%17.0%201822.3%2018< 9 %6.8%11.0%3.3%9.7%Men8.6%12.5%4.4%11.4%Women4.9%9.4%:u7.9%Cities5.2%9.6%:u8.7%Rural areas7.2%12.2%3.3%u10.0%Native6.9%10.0%3.4%8.5%EU-born:u20.7%:u21.4%Non EU-born6.5%u23.4%:u21.6%45%54.0%36.5%61.7%41.2%Men47.1%31.2%57.4%35.7%Women60.3%41.8%66.1%46.8%Cities63.2%46.2%70.8%51.4%Rural areas46.6%26.9%52.6%29.6%Native53.2%37.7%58.7%42.1%EU-born48.0%u32.7%57.5%40.7%Non EU-born66.3%27.0%74.1%34.7%25.2% 38.3%20.8%201938.9%201920152021IndicatorTargetIrelandEU27IrelandEU27Participation in early childhood education (age 3+)Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)TotalBy genderBy degree of urbanisationBy country of birthTertiary educational attainment (age 25-34)TotalBy genderBy degree of urbanisationBy country of birthShare of school teachers (ISCED 1-3) who are 50 years or over 
                                                 
 
  
 
classrooms. Ukrainian children and youth will have 
access to two years of free pre-school, as well as 
general  education.  The  Irish  authorities  aim  at 
implementing  a  family-centred  approach  across 
schools  and  to  help  adults  and  children  learn 
English.  16  Regional  Education  and  Language 
Teams  were  established  to  meet  the  needs  of 
Ukrainian  children  arriving 
Ireland  and  to 
support and advise schools. 

in 

ICT  equipment 

The reforms and investments under Ireland’s 
recovery  and  resilience  plan  will  help 
mainstream  digital  skills  across  education 
and  training  settings.  They  will  support 
connectivity  of  schools, 
for 
disadvantaged  students,  boost  the  supply  of 
graduates  with  high-level  ICT  skills,  as  well  as 
intensive  upskilling/reskilling  and  apprenticeships 
programmes,  and  enhance  green  skills.  The  10-
year Adult Literacy, Numeracy and Digital Literacy 
Strategy  will  also  support  the  post  COVID-19 
economic  recovery.  The  new  Digital  Strategy  for 
Schools  2021-2027 (68),  published  in  April  2022, 
focuses  on  further  embedding  the  use  of  digital 
learning  and 
in  all 
technologies 
assessment activities. 

teaching, 

(68)  Department of Education (2022) Digital Strategy for Schools 
to 2027 https://www.gov.ie/en/publication/69fb88-digital-
strategy-for-schools/  

51 

 
                                                 
was 3.3 per 1000 population – the sixth lowest in 
the  EU.  Despite  having  the  highest  number  of 
medical  graduates  per  capita,  the  Irish  health 
system  is  increasingly  reliant  on  foreign-trained 
doctors and nurses. Although shortcomings remain 
in  workforce  planning,  the  implementation  of  the 
Sláintecare  consultant  contract  is  expected  to 
alleviate shortages of doctors in public hospitals.  

Graph A14.2: Projected increase in public 
expenditure on health care over 2019-2070 
(reference scenario) 

Source: European Commission/EPC (2021)  

Through  its  RRP,  Ireland  plans  to  invest  EUR 
75  million  (7.6%  of  the  total  RRP)  to  strengthen 
its  digital  health  infrastructure,  notably  through 
deploying  ePharmacy  systems  in  hospitals.  In 
addition,  important  reform  measures  included  in 
the  plan  aim  to  underpin  the  implementation  of 
the Sláintecare reform agenda.  

ANNEX 14: HEALTH AND HEALTH SYSTEMS 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  Annex  provides  a  snapshot  of  the 
healthcare sector in Ireland. 

Life  expectancy  in  Ireland  is  higher  than  in 
the EU as a whole, but fell in 2020 by about 
two months and a half due to the COVID-19 
pandemic.  As  of  17  April  2022,  Ireland  reported 
1.4  cumulative  COVID-19  deaths  per  1  000 
inhabitants and 303 confirmed cumulative COVID-
19  cases  per  1  000  inhabitants.  Ireland  fares 
comparatively  well  in  preventing  deaths  from 
treatable  causes.  Although  cancer  mortality  is 
close to the EU average, the incidence of cancer is 
estimated  to  be  one  of  the  highest  in  the  EU  for 
both men and women.  

Graph A14.1: Life expectancy at birth (years) 

Source: Eurostat database 

Health  spending  relative  to  GDP  in  Ireland 
was  below  the  EU  average  in  2019.  However, 
Ireland  spends  a  higher  amount  per  resident, 
despite public primary care not being universal for 
a  large  proportion  of  the  working-age  population. 
The  public  share  of  health  expenditure  is  low, 
to  high  uptake  of  voluntary  health 
linked 
insurance.  Despite  the  current  favourable  age 
profile  of  the  Irish  population,  health  expenditure 
is projected to increase by 1.4 pps of GDP by 2070 
(compared to 0.9 pps for the EU) (69), raising long-
term fiscal sustainability concerns.  

Ireland faces both a shortage and an uneven 
distribution  of  health  workers,  which 
exacerbates  long  waiting  times  for  publicly 
funded services. In 2019, the number of doctors 

(69)  European Commission (ECFIN) and Ageing Working Group 
(EPC) (2021) The 2021 Ageing Report: Economic and 
Budgetary Projections for the EU Member States (2019-
2070). 

52 

80.980.981.81.380.481.782.282.282.882.620162017201820192020EUIreland6.64.10.91.402468EUIreland% of GDP20192070increase 
 
  
                                                 
  
 
Table A14.1: Key health indicators 

Notes: Doctors' density data refer to practising doctors in all countries except FI, EL, PT (licensed to practice) and SK 
(professionally active). Nurses' density data refer to practising nurses in all countries (imputation from year 2014 for FI) except IE, 
FR, PT, SK (professionally active) and EL (nurses working in hospitals only).  
More information: https://ec.europa.eu/health/state-health-eu/country-health-profiles _en  
Source: Eurostat Database; except: * Eurostat Database and OECD, ** ECDC 

53 

20162017201820192020EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)80.173.375.971.092.1 (2017)Cancer mortality per 100 000 population277.2266.6262.1261.5252.5 (2017)Current expenditure on health, % GDP 7.47.16.96.79.9 (2019)Public share of health expenditure, % of current health expenditure72.773.074.174.679.5 (2018)Spending on prevention, % of current health expenditure 2.62.72.62.72.8 (2018)Acute care beds per 100 000 population277.5278.1278.6269.2387.4 (2019)Doctors per 1 000 population *3.23.33.33.33.8 (2018)Nurses per 1 000 population *11.612.212.98.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day **20.419.420.721.017.114.5 (2020) 
 
 
 
  
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  Member  States.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and targeted policy response that fosters cohesion 
and  ensures  sustainable  and  resilient  economic 
development across all regions.  

Regional  disparities  remain  significant  in 
Ireland and are growing in terms of regional 
GDP per capita. Ireland’s GDP per capita is 193% 
(2019)  of the EU  average. However, this is driven 
by  a  particularly  strong  performance  from  the 
Southern region – 236% of the EU average – and 
the  Eastern  &  Midland  region  –  207%  of  the  EU 
average – while the Northern & Western region is 
lagging behind, at 76%. Economic activity remains 
highly  concentrated  around  Dublin  and  Cork.  In 
2019,  the  Southern  region,  encompassing  Cork, 
produced  three  times  the  economic  output  per 
capita  of  the  Northern  &  Western,  in  terms  of 
regional  GDP.  These  disparities  have  been 
increasing since 2010. 

Graph A15.1: GDP per head (2019) and GDP growth 
(2010-2019) 

Source: European Commission 

Regional  disparities  are  likely  to  continue 
growing  in  Ireland.  Average  growth  in  GDP  per 
capita was high throughout Ireland over the 2010-
2019  period.  However,  as  the  Southern  region 
grew  by  7.5%,  the  Eastern  &  Midland  region  by 
3.6%  and  the  Northern  &  Western  region  by  only 
1.4%, regional differences are likely to increase. 

54 

Graph A15.2: Real GVA per worker 

Source: European Commission 

Varying  levels  of  labour  productivity  across 
Ireland’s  regions  persist.  A  small  number  of 
highly  competitive  multinationals  continue  to 
outperform indigenous companies, and continue to 
concentrate  capital,  and  attract  skilled  workers  to 
the  areas  around  Dublin  and  Cork.  While  Dublin 
has  a  gross  value  added  (GVA)  per  worker  of 
147%  of  the  national  average,  the  Midlands  and 
the  Border  Region,  predominantly 
rural  and 
remote, have labour productivity rates of 33% and 
35% of the national average, respectively. 

Differences  in  the  labour  markets  of  the 
three  regions  remain  small.  In  2020,  the 
Northern  &  Western  region’s  employment  rate  of 
72.4%  stood  slightly  higher  than  the  Southern 
region’s  72.1%,  whereas  the  Eastern  &  Midland 
region  had  74.5%.  All  regions  experienced  slight 
dips  in  employment  levels  due  to  the  COVID-19 
pandemic. The Northern & Western region has the 
lowest  unemployment  rate,  standing  at  4.9%  in 
2020  against  slightly  less  than  6%  in  the  other 
regions. 

Companies  and  knowledge  providers  find 
differing  innovation  systems  in  each  of  the 
regions.  Assessed  via  the  Regional  Innovation 
Scoreboard (2021), the Northern & Western region 
has only a moderately innovative ecosystem, even 
though  its  performance  has  been  increasing.  The 
Eastern & Midland region, and the Southern region 
their 
provide  strong 
companies,  knowledge  providers  and  people.  All 
Irish regions perform strongly in tertiary education 
and  on  collaboration  between  innovative  SMEs.  In 
is 
the  Eastern  &  Midland 
addition, 

innovation  systems 

region 

to 

123456789708090100110120130140150160170Annual real GDP per head growth2010-2019GDP (PPS) per head in 2010 (EU = 100)Capital regionOther NUTS2 regionsNational averageEU27 
 
  
 
 
Table A15.1:Selected indicators at regional level - Ireland 

Source: Eurostat 

particularly  strong  in  employing  ICT  specialists, 
while  the  Southern  region  is  strong  in  producing 
innovative  products  as  well  as 
scientific 
publications. 

Graph A15.3: Territories most affected by the 
climate transition in Ireland 

Source: European Commission 

The  most  immediate  employment  impact  of 
Ireland’s  transition  to  a  climate  neutral 
economy  can  be  seen  throughout  the  wider 
Midlands  area.  In  2020,  Ireland  successfully 
withdrew  peat  from  the  electricity  generation 
process.  As  a  result  of  the  closure  of  two  peat-
fired  power  plants,  overall  CO2  emissions  from 
electricity  generation  fell  by  7%  in  that  same 

year (70). The EU and the Irish Just Transition Fund 
are  addressing 
to 
employment 
diversification 
stemming  from  this  transition  throughout  the 
wider Midlands area.  

challenges  posed 

economic 

and 

the 

Regional  disparities  are  also  apparent  when 
looking  at  poverty  indicators.  The  Northern  & 
Western region has a significantly higher share of 
people  at  risk  of  poverty  or  social  exclusion 
(27.2%) than the Southern (22.1%) or the Eastern 
and  Midland  (18.4%)  regions.  We  can  observe  a 
similar  pattern  in  the  proportion  of  quasi-jobless 
households, which again is highest in the Northern 
& Western region (17.7%). However, homelessness 
is concentrated in the Dublin area (more than 70% 
of  homeless  people  were  registered  here  in 
December  2021),  where  the  consequences  of  the 
ongoing housing crisis are most severe. 

The COVID-19 pandemic has exacerbated the 
duality of the Irish economy and its regional 
disparities. While Ireland was the only EU country 
with positive GDP growth in 2020, this growth can 
be  entirely  attributed  to  sectors  dominated  by 
multinational  companies,  which  grew  by  23.1%. 
This  growth  therefore  manifested  itself  in  the 
strong  performing  regions  in  and  around  Dublin 
and Cork. Meanwhile, the GVA of all other sectors 
declined by 8.7%.  

(70)  Sustainable Energy Authority of Ireland (2021) Energy 

Related CO2 emissions in Ireland in 2020 

55 

NUTS 2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Population with high educational attainmentEmployment in high-technology sectorsRegional Competitiveness IndexCO2 emissions from fossil fuels  per headInnovation performanceEU27=100, 2019EU27=100, 2018% of population aged 30-34, 2017-2019% of total employment, 2020Range 0-100, 2019tCO2 equivalent, 2018RIS regional performance groupEuropean Union10010039,44,557,37,2Ireland19320455,49,267,7Northern and Western788953,05,952,66,9Moderate innovator +Southern24026651,29,065,310,8Strong innovator -Eastern and Midland20220358,410,574,96,8Strong innovator 
 
                                                 
 
  
 
MACROECONOMIC STABILITY 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

This  Annex  provides  an  overview  of  key 
developments  in  Ireland’s  financial  sector. 
Irish  banks  have  made  large  strides  in  improving 
their asset quality over the recent years, a process 
only  temporarily  slowed  down  by  the  pandemic 
crisis.  The  financial  crisis  ended  a  period  of 
excessive  mortgage  lending,  which  required  the 
state  to  inject  capital  into  banks  badly  affected. 
From a peak in the non-performing loans ratio of 
23% in 2013, banks worked towards reducing it to 
2.4% in 2021, thanks to a combination of portfolio 
sales, organic reductions and restructurings. At the 
same time, banks maintained solid capital buffers 
with  a  capital  adequacy  solvency  ratio  of  25.7% 
by the end of 2021. 

banks to withdraw from the Irish retail market. The 
ensuing  readjustment  of  market  shares  between 
the  remaining,  domestically-owned  retail  banks 
has  led  the  Irish  Competition  and  Consumer 
Protection  Commission  to  launch  an  investigation 
over  concerns  that  competition  may  be  adversely 
affected. 

Beyond  the  retail  space,  Ireland  has  gained 
importance  as  a  hub  for 
international 
is  reflected  in  the 
investment  banks.  This 
growing asset share of foreign-owned banks which 
rose  to  59%  in  2021.  These  international  banks 
have little exposure to the domestic economy and 
predominantly serve multinationals across the EU. 
Therefore,  they  are  less  exposed  to  the  Irish 
business cycle. 

Profitability improved in 2021, driven mainly 
by  reductions,  and  in  some  cases  write-
backs,  of  pandemic-induced 
impairment 
charges  which  banks  had  frontloaded  in 
2020.  However,  overall,  profitability  remains  a 
challenge  and  still  lags  behind  other  banking 
systems,  given  Irish  banks’  high  operating  costs 
and  reliance  on  interest  income.  The  cost  to 
income ratio remains high, at 71.1% versus an EU 
average  of  60.0%.  Banks  are  actively  reducing 
their costs, through branch closures, redundancies 
and  digitalisation  projects,  and  making  efforts  to 
diversify  their  income  streams.  Nevertheless,  low 
profitability  has  prompted  two  foreign-owned 

Ireland  is  also  home  to  a  large  non-bank 
financial  sector,  comprising 
investment 
funds,  money  market  funds,  special  purpose 
vehicles  and  other  entities.  The  sector  has 
grown  strongly  in  recent  years  with  total  assets 
reaching  EUR  5.2  trillion  in  2021,  about  14  times 
the  size  of  the  Irish  economy.  These  funds,  while 
domiciled  in  Ireland,  have  mainly  international 
shareholders  and  investments.  Their  exposures  to 
the  domestic  economy  are  limited  overall.  Real 
estate funds, have the largest domestic exposures, 
as they invest in domestic real estate and borrow 
from domestic retail banks. This creates a channel 
for  potential  shocks  to  be  transmitted  from  the 

Table A16.1: Financial soundness indicators 

1 Last data: Q3 2021  
Source: ECB, Eurostat, Refinitiv 

56 

20172018201920202021Total assets of the banking sector (% of GDP)354,5338,0351,2371,8332,2Share (total assets) of the five largest bank (%)45,546,149,755,7-Share (total assets) of domestic credit institutions (%)151,248,644,440,741,0Financial soundness indicators:1- non-performing loans (% of total loans)9,95,53,43,42,4- capital adequacy ratio (%)25,225,424,925,425,7- return on equity (%)5,04,93,7-2,24,2NFC credit growth (year-on-year % change)1,23,92,38,419,8HH credit growth (year-on-year % change)-1,5-0,80,1-1,5-1,2Cost-to-income ratio (%)164,566,170,971,571,1Loan-to-deposit ratio (%)195,390,291,583,975,7Central bank liquidity as % of liabilities1,80,70,41,34,3Private sector debt (% of GDP)249,8231,2209,4188,9-Long-term interest rate spread versus Bund (basis points)48,455,458,644,943,7Market funding ratio (%)80,780,982,984,6-Green bond issuance (bn EUR)-6,81,22,04,6 
 
 
 
 
 
 
  
 
real  estate  sector  to  the  banking  sector.  A  new 
is  the 
development  that  requires  monitoring 
increasing  presence  of  non-bank  lenders  as  a 
source  of  finance  for  Irish  companies,  including 
SMEs.  

57 

 
 
 
ANNEX 17: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX 
ANNEX 17: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX 

being  an  issue,  at  least  in  the  short  term  before 
additional supply becomes available. 

In 2021, the policy efforts continued to focus 
on  short-term  measures  to  address  the 
impact  of  the  pandemic.  This  shored  up 
employment  and  household  incomes,  alongside  a 
range  of  policies  to  support  housing  supply.  That 
helped  private  sector  deleveraging,  especially  by 
households,  while  government  debt  fell  too.  The 
government  has  actively  intervened  to  address 
housing  supply  constraints.  The  RRP  includes 
investments, 
healthcare  reforms  and  eHealth 
which  have 
to  support  fiscal 
sustainability. 

the  potential 

For  those  reasons,  and  more  generally  on  the 
basis  of  the  elements  of  the  in-depth  review 
undertaken  for  Ireland  under  Regulation  (EU)  No 
1176/2011  on  the  prevention  and  correction  of 
macroeconomic imbalances as summarised in the 
Staff  Working  Document  (SWD(2022)634  final), 
the  Commission  has  considered 
its 
Communication  “European  Semester  –  2022 
Spring  Package”  (COM(2022)600  final)  that 
Ireland 
experiencing 
macroeconomic imbalances. 

longer 

no 

in 

is 

Ireland 

The  Macroeconomic 
Imbalance  Procedure 
matrix presents the main elements of the in-
depth  review  undertaken  for 
in 
accordance  with  Article  5  of  Regulation  (EU)  No 
1176/2011  on  the  prevention  and  correction  of 
macroeconomic  imbalances,  as  summarized  in 
SWD(2022)634  final (71).  For  Member  States 
selected  in  the  2022  Alert  Mechanism  Report  it 
presents, separately for each source of imbalances 
and adjustment issue, the main findings regarding 
the  gravity  and  the  evolution  of  the  identified 
challenges, as well as policy response and gaps. 

Ireland  has  seen  substantial  and  steady 
progress 
in  reducing  public  and  private 
indebtedness.  The long-standing trend decline in 
private  and  public  indebtedness  has  continued 
even  during  the  pandemic.  Household  balance 
sheets  have  improved  markedly  over  time.  The 
corporate  sector  seems  to  have  weathered  the 
crisis well, and continued to deleverage. The large 
negative  net  international  investment  position 
(NIIP)  has  been  shrinking,  with 
its  (smaller) 
‘domestic’  component  improving.  Current  account 
figures  are  very  volatile,  while  the  modified 
current  account (72)  has  been 
in  a  surplus 
consistently.  Government  debt  level  has  risen 
more  slowly  than  GDP  and  is  below  the  60% 
threshold.  House  prices  accelerated  in  2021  as 
challenges  remain  in  increasing  housing  supply 
sufficiently.  

Going forward, the positive economic outlook 
is  expected  to  contribute  to  a  further 
reduction  of  public,  private  and  external 
indebtedness,  but  marked  house  prices 
growth  may  be  an  issue  for  some  time.  The 
public debt ratio is forecast to remain below 60% 
of  GDP  over  the  forecast  horizon.  On  current 
corporate 
household 
trends, 
indebtedness  are  expected  to  continue  falling, 
while continued high current account surpluses are 
forecast  to  further  improve  the  negative  NIIP. 
Housing supply is still falling short of demand and 
thereby house price growth is expected to continue 

both 

and 

(71)  European Commission (2022), Commission Staff Working 
Document In-Depth Review for Ireland in accordance with 
Article 5 of Regulation (EU) No 1176/2011 on the prevention 
and correction of macroeconomic imbalances.  

(72)  Modified current account equals current 

account less depreciation on R&D service imports and trade 
in IP, aircraft leasing depreciation, redomiciled incomes and 
R&D related IP exports adding back net aircraft related to 
leasing, R&D related IP imports and R&D service imports. 

58 

 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A17.1: Assessment of Macroeconomic Imbalances matrix 

Modified Gross National Income (GNI*) is an indicator designed specifically to measure the size of the Irish economy by excluding 
Globalisation effects. 
Source: European Commission 

59 

 Gravity of the challenge Evolution and prospects Policy response Imbalances (unsustainable trends, vulnerabilities and associated risks) Private debt Private debt is estimated to have further decreased to 179.1% of GDP in 2021. Household debt is expected to have fallen to 30.8% of GDP in 2021. It fell for the first time since 2002 to a level below 100% of households disposable income (98.9% in Q4 2021). Corporate debt is estimated to have decreased to 148.2% of GDP at the end of 2021) and is heavily influenced by the debt of multinational corporations. Debt of domestically-controlled firms slightly decreased to 63.1% of GDP in 2020 (or 113% of GNI*), above the fundamentals-based but below the prudential benchmark.  The steady decline in household debt relative to GDP since 2008 continued throughout the pandemic, supported by active deleveraging and very strong GDP growth and accompanied by falling NPLs. In 2021, household incomes continued to grow, thereby further reducing vulnerabilities, and were supported by employment and wage growth, except during periods of COVID-19-related restrictions.  Multinationals, accounting for a large share of corporate debt in Ireland, performed particularly well in 2021, driving real GDP growth into double digits and domestic companies have generally weathered the crisis well. The growth outlook for Ireland remains very positive, which will lend support for further debt deleveraging.  Income support schemes materially alleviated household hardship during the pandemic, and allowed avoiding rise in non-performing loans as well as scarring effects on the labour market. The income support scheme was extended into the first quarter of 2022. Government plans to expand the housing stock, including social housing, could make housing more affordable and ease the new mortgage burden for households. Lower-income first-time buyers are to benefit from the extension of the Help-to-Buy scheme, the expansion of the local authority home loan and the introduction of the shared equity loan scheme. Unless accompanied by measures to increase housing supply, these demand-side measures could contribute to rising house prices Public debt Government debt decreased in 2021 to 56.0% of GDP, having remained below 60% threshold since 2019. Alternative metrics, such as debt relative to GNI*, which were around 100% in 2021, point to high levels of public debt in Ireland. There are mitigating factors to the risks posed by high debt, such as favourable financing conditions and long maturities. The general government balance is projected at   -0.5% of GDP in 2022 and 0.4% in 2023, and the gross government debt-to-GDP ratio is projected at 50.3% in 2022 and 45.5% in 2023. The structural balance worsened to -3.2% of potential GDP in 2021 from -2.6% in 2020, and it is projected to rebound to around -2.0% in 2022. Risks to the fiscal outlook are balanced.  In Budget 2022, the government set out a declining medium-term path for the debt-GNI* ratio as of 2022. This foresees expenditure control mechanisms in order to reduce the deficit and turn into general government surplus as soon as the recovery allows. The RRP includes healthcare reforms and eHealth investments, which have the potential to support fiscal sustainability. External sustainability   Ireland’s net international investment position (NIIP) improved from -171% of GDP in 2020 to -138% at the end of 2021, dipping below the prudential benchmark for the first time. The still large NIIP stock is linked to the very sizeable onshoring of intellectual property assets to Ireland in previous years, arising from the tax optimisation strategies of a small number of multinational enterprises, and the large net position of the International Financial Services Centre, both with limited links to the domestic economy.  The underlying, domestically relevant, NIIP remains hard to gauge. Commission estimates indicate an underlying NIIP (NIIP*) between -45% to -70% of GNI* in 2020.  Sizeable on-shoring of intellectual property assets has decreased since Q1 2020 and is expected to continue to be more sporadic. This is likely to limit future large deteriorations in the NIIP. Meanwhile, the external position of the domestic sectors is expected to have improved substantially, as well as that of the Central Bank and other financial intermediaries. In 2021, the current account was in surplus of 13.9% of GDP, due mainly to the net exports of multinational corporations but also helped by household precautionary savings. The current account is expected to remain in large surplus of 12.8% of GDP in 2022 and 13.1% in 2023. Stripping out the activities of the multinationals, the modified current account is expected to be smaller and to follow the increasingly positive trend of previous years (5.7% of GDP in 2019 and 6.4% in 2020).   Property market  Residential property prices are estimated to have accelerated in 2021 to 8.3% y-o-y in nominal terms and 4.3% in real terms, driven by supply constraints. Rental prices followed a trend similar to house prices, increasing twice as much outside of Dublin as in the capital.  At this stage, average national house prices do not appear to be overvalued according to standard valuation metrics. However, affordability remains a concern. The number of years of gross disposable income required by an average income household to buy a 100 square meter dwelling amounted to 16.3 in 2021, the third highest in the EU.  Despite improvements, housing supply is still falling short of demand. After increasing by almost 40% annually from 2017 to 2019, housing completions stagnated in 2020 and 2021 at 20 500 units due to the pandemic-induced lockdown of the construction sector. After the re-opening of the economy in the second quarter of 2021 construction activity restarted, and the number of housing commencements substantially increased, exceeding 30 000 units for the year as a whole, almost a fifth more than in 2019. This suggests that a further increase in completions is to be expected in 2022. The capacity of the construction sector is expected to increase but might be limited by labour constraints and rising costs of materials, which might strain the affordability and timing of new projects. In recent years, the government has intervened to address housing supply constraints. The measures have had an overall positive impact but need monitoring and possible refinements. Many additional measures have been announced in September 2021 under the “Housing for All” plan. The plan aims to invest an average EUR 4 billion each year until 2030 to increase housing completions by 33 000 units yearly. However, some risks remain in the implementation of the plan. Legislative reforms to regulate short-term letting (ex. Airbnb) in areas of high housing demand came into effect in 2019. If properly enforced, they could contribute to boosting the rental stock. The vacant site levy seems to have been effective in supporting land development. Solving administrative deficiencies in its application may help increase housing supply.  A full review of the planning process is in progress, which has the potential to reduce cost and time delays faced by construction companies.    
 
  
 
EU average. 

In  2021,  Ireland  committed  to  steps  that 
have  the  potential  to  help  tackle  aggressive 
tax planning strategies. Ireland’s legal structure 
regarding  the  withholding  of  taxes  on  outbound 
payments may encourage many companies to use 
Ireland’s  tax  rules  to  engage  in  aggressive  tax 
planning.  Dividend,  interest  and  royalty  payment 
streams,  relative  to  GDP,  are  therefore  much 
higher than the EU average. However, for the first 
time, 
Ireland  has  committed  to 
introducing  new  legislation  to  apply  to  outbound 
payments in order to prevent double non-taxation. 
This will take effect from 2024 at the latest. 

its  RRP 

in 

ANNEX 18: TAXATION 
ANNEX 18: TAXATION 

This  Annex  provides  an 
indicator-based 
overview  of  Ireland’s  tax  system.  It  includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax  that  Ireland  derives  most  revenue  from,  the 
tax  burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance,  and  on  the  risks  of  aggressive  tax 
planning, which appear to be high in Ireland’s case. 

information  on 

Ireland’s tax  revenues are low  in  relation  to 
GDP,  and  the  tax  system  relies  equally  on 
labour  taxation  and  on  relatively  growth-
friendly  taxes.  Ireland’s  tax  base  is  relatively 
narrow and excessively reliant on corporate taxes. 
The very low tax revenues translate into low rates 
across  the  board:  labour,  consumption,  property 
and  environmental  taxes  are  all  below  the  EU 
average.  Recurrent  taxes  on  property  are  among 
the lowest in the EU.  

Ireland’s  labour  tax  burden  is  relatively  low 
at  various  wage  levels.  The  labour  tax  wedge 
for Ireland in 2021 was lower than the EU average 
at  various  income  levels,  i.e.  for  single  people  at 
the average wage (100%) as well as at 50% and 
67%  of  the  average  wage.  Second  earners  at  a 
wage  level  of  67%  of  the  average  wage,  whose 
spouse earns the average wage, also face a lower 
tax  wedge  compared  to  the  EU  average,  though 
they are taxed more heavily than single people at 
the  same  wage  level.  The  tax-benefit  system 
helped  reduce  inequality  –  as  measured  by  the 
GINI  coefficient  –  by  significantly  more  than  the 

Table A18.1: Indicators on taxation 

(1) Forward-looking Effective Tax Rate (OECD). 
(*) EU-27 simple average as there is no aggregated EU-27 value. 
Source: European Commission and OECD 

60 

2010201820192020202120102018201920202021Total taxes (including compulsory actual social contributions) (% of GDP)27,822,422,020,137,940,139,940,1Labour taxes (as % of GDP)12,29,59,58,920,020,720,721,5Consumption taxes (as % of GDP)9,97,06,85,610,811,111,110,8Capital taxes (as % of GDP)5,76,05,75,67,18,28,17,9Total property taxes (as % of GDP)1,41,21,11,11,92,22,22,3Recurrent taxes on immovable property (as % of GDP)0,80,60,50,31,11,21,21,2Environmental taxes as % of GDP2,51,61,41,22,42,42,42,2Tax wedge at 50% of Average Wage (Single person) (*)16,320,420,921,221,433,932,432,031,531,9Tax wedge at 100% of Average Wage (Single person) (*)30,932,933,233,734,041,040,240,139,939,7Corporate Income Tax - Effective Average Tax rates (1) (*)12,412,412,419,819,519,3Difference in GINI coefficient before and after taxes and cash social transfers (pensions excluded from social transfers)20,517,316,18,47,97,48,3Outstanding tax arrears: Total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6,56,031,931,8VAT Gap (% of VTTL)9,810,111,210,5Dividends, Interests and Royalties (paid and received) as a share of GDP (%)34,134,633,510,710,5FDI flows through SPEs (Special Purpose Entities), % of total FDI flows (in and out)2,11,71,747,846,236,7Tax structureProgressivity & fairnessTax administration & complianceFinancial Activity RiskIrelandEU-27 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Graph A18.1: Tax wedge indicators 

The tax wedge measures the difference between the total labour cost of employing a worker and the worker’s net earnings: sum 
of personal income taxes and employee and employer social security contributions, net of family allowances, expressed as a 
percentage of total labour costs (the sum of the gross wage and social security contributions paid by the employer). 
(1) The second earner average tax wedge measures how much extra personal income tax plus employee and employer social 
security contributions (SSCs) the family will have to pay as a result of the second earner entering employment, as a proportion of 
the second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), Taxing Wages 2016, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU-27 simple average, as no aggregated EU-27 value 
Source: European Commission 

61 

21,425,034,042,433,4At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)IEEU-27 (*) 
  
ANNEX 19: KEY ECONOMIC AND FINANCIAL INDICATORS 
ANNEX 19: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A19.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares 
(2) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (Spring forecast 2022) 

62 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)5.7-1.48.94.95.913.55.44.4Potential growth (y-o-y)4.4-0.28.59.17.35.55.04.8Private consumption (y-o-y)6.0-1.42.83.2-11.15.75.74.1Public consumption (y-o-y)4.4-1.43.26.89.45.41.51.2Gross fixed capital formation (y-o-y)8.3-6.315.199.5-22.9-37.64.25.4Exports of goods and services (y-o-y)6.71.813.210.49.516.66.04.9Imports of goods and services (y-o-y) 8.2-0.511.441.7-7.4-3.76.25.0Contribution to GDP growth:Domestic demand (y-o-y)5.6-2.65.029.9-14.4-12.82.62.4Inventories (y-o-y)0.00.00.11.00.2-0.40.00.0Net exports (y-o-y)-0.32.04.2-26.521.425.82.21.8Contribution to potential GDP growth:Total Labour (hours) (y-o-y)1.3-1.81.82.01.51.51.41.1Capital accumulation (y-o-y)2.20.83.63.61.4-0.4-0.3-0.1Total factor productivity (y-o-y)1.00.83.13.54.34.43.93.7Output gap1.7-2.81.5-3.5-4.82.52.82.5Unemployment rate4.813.09.45.05.96.24.65.0GDP deflator (y-o-y)2.0-0.91.84.2-1.2-0.44.84.1Harmonised index of consumer prices (HICP, y-o-y)2.50.60.30.9-0.52.46.13.1Nominal compensation per employee (y-o-y)5.10.41.63.42.43.63.87.8Labour productivity (real, hours worked, y-o-y)1.63.25.12.69.27.31.02.0Unit labour costs (ULC, whole economy, y-o-y)3.8-1.4-3.81.4-4.7-5.21.34.0Real unit labour costs (y-o-y)1.7-0.5-5.5-2.8-3.5-4.8-3.3-0.1Real effective exchange rate (ULC, y-o-y)3.3-3.3-4.7-3.1....Real effective exchange rate (HICP, y-o-y)1.4-2.3-0.6-2.80.2-0.1..Net savings rate of households (net saving as percentage of net disposable income)1.48.14.65.221.4...Private credit flow, consolidated (% of GDP)30.77.1-4.2-9.6-1.8...Private sector debt, consolidated (% of GDP)177.1260.5268.5209.4188.9...of which household debt, consolidated (% of GDP)85.7107.662.238.735.9...of which non-financial corporate debt, consolidated (% of GDP)91.4152.9206.3170.8153.1...Gross non-performing debt (% of total debt instruments and total loans and advances) (2)..11.52.93.0...Corporations, net lending (+) or net borrowing (-) (% of GDP)2.37.7-3.1-30.8-10.79.29.49.8Corporations, gross operating surplus (% of GDP)33.933.848.355.858.059.560.060.6Households, net lending (+) or net borrowing (-) (% of GDP)-8.52.61.91.87.15.32.82.0Deflated house price index (y-o-y)8.4-13.38.50.3-0.2...Residential investment (% of GDP)12.33.91.92.32.12.1..Current account balance (% of GDP), balance of payments-3.9-3.41.4-19.9-2.713.912.512.8Trade balance (% of GDP), balance of payments10.415.022.03.522.340.3..Terms of trade of goods and services (y-o-y)-1.1-0.7-0.21.3-1.0-2.2-0.80.9Capital account balance (% of GDP)0.20.1-5.1-9.9-4.2-0.2..Net international investment position (% of GDP)-31.4-120.3-170.1-193.5-174.0-138.9..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)1.3-224.9-278.4-282.8-292.9-336.0..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)950.91384.81389.91320.01359.71412.9..Export performance vs. advanced countries (% change over 5 years)9.9-2.136.670.450.7...Export market share, goods and services (y-o-y)-2.8-4.011.29.821.76.01.20.6Net FDI flows (% of GDP)11.2-4.0-7.3-31.1-30.39.3..General government balance (% of GDP)1.5-15.0-2.20.5-5.1-1.9-0.50.4Structural budget balance (% of GDP)..-2.92.3-2.6-3.2-2.0-0.9General government gross debt (% of GDP)25.484.184.457.258.456.050.345.5forecast 
 
 
 
 
  
 
ANNEX 20: DEBT SUSTAINABILITY ANALYSIS 
ANNEX 20: DEBT SUSTAINABILITY ANALYSIS 

‘adverse interest-growth rate’ scenario assumes a 
in  the 
less  favourable  snowball  effect  than 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022.  

Graph 2 shows the outcome of the stochastic 
projections.  These  projections  show  the  impact 
on  debt  of  2  000  different  shocks  affecting  the 
government’s 
economic 
growth,  interest  rates  and  exchange  rates.  The 
cone covers 80% of all the simulated debt paths, 
therefore excluding tail events. 

budgetary 

position, 

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 
stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary position measures the effort required to 
cover  future  interest  payments,  the  ageing  costs 
component  accounts  for  the  need  to  absorb  the 
projected 
public 
expenditure  such  as  pensions,  health  care  and 
long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 

in  ageing-related 

the  debt 

change 

This  annex  assesses  fiscal  sustainability 
risks for Ireland over the short, medium and 
long term. It follows the same multi-dimensional 
approach as the 2021 Fiscal Sustainability Report, 
updated  on  the  basis  of  the  Commission  2022 
spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt  and  its  breakdown  into  the  primary  balance, 
the  snowball  effect  (the  combined  impact  of 
interest payments and nominal GDP growth on the 
debt  dynamics)  and  the  stock-flow  adjustment. 
These projections assume that no new fiscal policy 
measures  are  taken  after  2023,  and  include  the 
expected  positive  impact  of  investments  under 
Next Generation EU. 

Graph  1  shows  four  alternative  scenarios 
around  the  baseline, to  illustrate the  impact 
of changes in assumptions. The ‘historical SPB’ 
scenario  assumes  that  the  structural  primary 
balance (SPB) gradually returns to its past average 
level.  In  the  ‘lower  SPB’  scenario,  the  SPB  is 
permanently  weaker  than  in  the  baseline.  The 

Table A20.1: Debt sustainability analysis for Ireland 

Source: European Commission 

63 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)57.258.456.050.345.542.439.838.236.836.035.535.536.036.7Change in debt-5.91.2-2.5-5.6-4.8-3.1-2.6-1.6-1.4-0.8-0.40.00.50.6of whichPrimary deficit-1.84.11.1-0.3-1.1-0.5-0.10.50.81.01.11.31.51.6Snowball effect-4.1-1.5-6.0-4.5-3.3-2.6-2.5-2.1-2.1-1.8-1.6-1.3-1.0-1.0Stock-flow adjustment0.0-1.42.3-0.9-0.40.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)5.711.96.25.04.64.54.85.04.95.15.35.35.45.6S1S2Overall index (pps. of GDP)-1.55.3of whichInitial budgetary position-1.70.3Debt requirement-1.2Ageing costs1.45.0of whichPensions0.92.3Health care0.31.2Long-term care0.31.6Others-0.1-0.1                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators15253545556575852019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p90152535455565758520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
 
 
   
 
Table A20.2: Heat map of fiscal sustainability risks for Ireland 

(1) Debt level in 2032: green: below 60% of GDP, yellow: between 60% and 90%, red: above 90%. (2) The debt peak year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early; yellow: peak towards the 
middle of the projection period; red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country that were more stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is 
plausible by historical standards and leaves room for corrective measures if needed; yellow: intermediate; red: low. (4) Probability 
of the debt ratio exceeding in 2026 its 2021 level: green: low probability, yellow: intermediate, red: high (also reflecting the initial 
debt level). (5) The difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
2000 different shocks. Green, yellow and red cells indicate increasing uncertainty. 
Source: European Commission (for further details on the Commission’s multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report). 

reach the 60% of GDP debt target. 

Finally,  the  heat  map  presents  the  overall 
fiscal  sustainability  risk  classification  (Table 
A20.2).  The  short-term  risk  category  is  based  on 
the  S0  indicator,  an  early-detection  indicator  of 
fiscal  stress  in  the  upcoming  year.  The  medium-
term  risk  category  is  derived  from  the  debt 
sustainability  analysis  (DSA)  and  the  S1  indicator. 
The DSA assesses risks to sustainability based on 
several  criteria:  the  projected  debt  level  in  10 
years’  time,  the  debt  trajectory  (‘peak  year’),  the 
plausibility  of  fiscal  assumptions  and  room  for 
tighter  positions  if  needed  (‘fiscal  consolidation 
space’),  the  probability  of  debt  not  stabilising  in 
the  next  5  years  and  the  size  of  uncertainty.  The 
long-term  risk  category  is  based  on  the  S2 
indicator and the DSA. 

sustainability  gap  indicator  S1  signals  that  no 
additional fiscal effort is required to reach a debt 
ratio  of  60%  of  GDP  in  15  years’  time  (Table 2). 
Overall,  the  low  risk  reflects  the  favourable  initial 
budgetary  position,  notably  with  a  moderate  debt 
ratio, which compensate for the projected increase 
in age-related expenditure. 

Long-term  risks  to  fiscal  sustainability  are 
medium.  Over  the  long  term,  the  sustainability 
gap  indicator  S2  (at  5.3  pps.  of  GDP)  points  to 
medium risks, compared to low risks for the DSA, 
leading  to  the  overall  medium  risk  assessment. 
The  S2  indicator  suggests  that  stabilising  debt 
over  the  long  term  would  require  addressing  the 
projected rise in ageing costs,  in particular due to 
pension,  long-term  care  and  health  care  spending 
(Table 2). 

short-term 

Overall, 
fiscal 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term fiscal risks (Table A20.2).  

risks 

to 

Medium-term  risks  to  fiscal  sustainability 
are  low.  Both  elements  of  the  Commission’s 
medium-term  analysis  lead  to  this  conclusion. 
First,  the  debt  sustainability  analysis  (DSA)  shows 
that  government  debt  is  projected  to  fall,  from 
about 50% of GDP in 2022 to around 37% of GDP 
in 2032 in the baseline (Table 1). The debt path is 
robust to possible shocks to fiscal, macroeconomic 
illustrated  by 
variables,  as 
and 
alternative scenarios (Graphs 1 and 2). Though the 
stochastic  simulations  show  some  uncertainty 
the 
surrounding 

the  projections.  Moreover, 

financial 

64 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallLOWLOWLOWLOWLOWLOWDebt level (2032), % GDP3746463937Debt peak year20212021202120212021Fiscal consolidation space65%75%75%65%65%Probability of debt ratio exceeding in 2026 its 2021 level7%Difference between 90th and 10th percentiles (pps. GDP)28MEDIUMMEDIUMDeterministic scenariosStochastic projectionsLOWLOWLOWLOWShort termMedium termLong termOverall                               (S0)Overall     (S1+DSA)S1Debt sustainability analysis (DSA)S2Overall     (S2+DSA)Overall