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

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   EUROPEAN COMMISSION  Brussels, 23.5.2022  COM(2022) 615 final  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 {SWD(2022) 615 final} - {SWD(2022) 640 final}  
 
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 

THE COUNCIL OF THE EUROPEAN UNION, 

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

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

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

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

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

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council3,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021.  The  Recovery  and  Resilience  Facility  provides  financial  support  for  the 
implementation of reforms and investment, entailing a fiscal impulse financed by the 
Union.  It  contributes  to  the  economic  recovery  and  to  the  implementation  of 
sustainable and growth-enhancing reforms and investment, in particular to promote the 
green and digital transition, while strengthening the resilience and potential growth of 

1 
2 
3 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

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(2) 

(3) 

(4) 

the Member States’ economies. It also helps strengthen sustainable public finances and 
boost growth and job creation in the medium and long term. The maximum financial 
contribution  per  Member  State  under  the  Recovery  and  Resilience  Facility  [was] 
updated on [XX] June 2022, in line with Article 11(2) of Regulation (EU) 2021/241.  

On  24  November  2021,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Survey,  marking  the  start  of  the  2022  European  Semester  for  economic  policy 
coordination.  It  took  due  account  of  the  reaffirmed  joint  commitment  of  the  Porto 
Social Summit of May 2021 to further implement the European Pillar of Social Rights 
proclaimed  by  the  European  Parliament,  the  Council  and  the  Commission  on  17 
November  2017.  The  European  Council  endorsed  the  priorities  of  the  2022  Annual 
Sustainable Growth Survey on 25 March 2022. On 24 November 2021, on the basis of 
Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism 
Report,  in  which  it  identified  Ireland  as  one  of  the  Member  States  for  which  an  in-
depth  review4  would  be  needed.  On  the  same  date,  the  Commission  also  adopted  a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which was adopted on 5 April 2022 by the Council, as well as the proposal  for 
the 2022 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  was 
adopted by the Council on 14 March 2022.  

Russia’s  invasion  of  Ukraine,  in  the  wake  of  the  global  pandemic,  has  significantly 
altered the geopolitical and economic context. The impact of the invasion on Member 
States’  economies  has  been  felt  for  example  through  higher  energy  and  food  prices 
and weaker growth prospects. The higher energy prices weigh particularly on the most 
vulnerable households experiencing or at risk of energy poverty. The EU is also seeing 
an unprecedented inflow of people fleeing Ukraine. In this context, on 4 March 2022, 
the  Temporary  Protection  Directive  was  triggered5  for  the  first  time,  granting 
displaced persons from Ukraine the right to legally stay in the EU, as well as access to 
education and training, labour market, healthcare, housing and social welfare. 

Taking  account  of  the  rapidly  changing  economic  and  geopolitical  situation,  the 
European Semester resumes its broad economic and employment policy coordination 
in 2022, while evolving in line with the implementation requirements of the Recovery 
and  Resilience  Facility,  as  outlined  in  the  2022  Annual  Sustainable  Growth  Survey. 
The  implementation  of  the  adopted  recovery  and  resilience  plans  is  essential  for  the 
delivery of the policy priorities under the European Semester, as the plans address all 
or a significant subset of the relevant country-specific recommendations issued in the 
2019  and  2020  Semester  cycles.  The  2019  and  2020  country-specific 
recommendations  remain  equally  relevant  also  for  recovery  and  resilience  plans 
revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation 
(EU) 2021/241, in addition to any country-specific recommendations issued up to the 
date of submission of the modified plan.  

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Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 
on the prevention and correction of macroeconomic imbalances, OJ L 306, 23.11.2011, p. 25. 
Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection, OJ L 71, 4.3.2022, p. 1.   

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(5) 

(6) 

(7) 

The General Escape Clause has been active since March 20206. In its Communication 
of  3  March  20217,  the  Commission  set  out  its  view  that  the  decision  on  the 
deactivation or continued application of the general escape clause should be taken as 
an overall assessment of the state of the economy, with the level of economic activity 
in the EU or euro area compared to pre-crisis levels (end-2019) as a key quantitative 
criterion. Heightened uncertainty and strong downside risks to  the economic outlook 
in  the  context  of  war  in  Europe,  unprecedented  energy  price  hikes  and  continued 
supply  chain  disturbances  warrant  the  extension  of  the  general  escape  clause  of  the 
Stability and Growth Pact through 2023. 

Following the approach in the Council opinion of 18 June 2021 on the 2021 Stability 
Programme,  the  fiscal  stance  is  currently  best  measured  as  the  change  in  primary 
expenditure  (net  of  discretionary  revenue  measures),  excluding  COVID-19  crisis-
related  temporary  emergency  measures  but  including  expenditure  financed  by  non-
repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth8.  Going  beyond  the  overall  fiscal 
stance, in order to assess whether national fiscal policy is prudent and its composition 
is conducive to a sustainable recovery consistent with the green and digital transitions, 
attention  is  also  paid  to  the  evolution  of  nationally  financed9  primary  current 
expenditure  (net  of  discretionary  revenue  measures  and  excluding  COVID-19  crisis-
related temporary emergency measures) and investment. 

On  2  March  2022,  the  Commission  adopted  a  Communication  providing  broad 
guidance  for  fiscal  policy  in  2023,  aiming  at  supporting  the  preparation  of  Member 
States’  Stability  and  Convergence  Programmes  and  thereby  strengthening  policy 
coordination10. The Commission  noted that, based on the macroeconomic outlook of 
the  2022  winter  forecast,  transitioning  from  an  aggregate  supportive  fiscal  stance  in 
2020-2022  to  a  broadly  neutral  aggregate  fiscal  stance  would  appear  appropriate  in 
2023,  while  standing  ready  to  react  to  the  evolving  economic  situation.  The 
Commission announced that the fiscal recommendations for 2023 should continue to 
differentiate  across  Member  States  and  take  into  account  possible  cross-country 
spillovers. The Commission invited the Member States to reflect the guidance in their 
Stability  and  Convergence  Programmes.  The  Commission  committed  to  closely 
monitor  the  economic  developments  and  adjust  its  policy  guidance  as  needed  and  at 
the latest in its Semester spring package of late May 2022.  

(8)  With  respect  to  the  fiscal  guidance  provided  on  2  March  2022,  the  fiscal 
recommendations  for  2023  take  into  account  the  worsened  economic  outlook,  the 
heightened uncertainty and further downside risks, and the higher inflation compared 
to the winter forecast. Against these considerations, the fiscal response has to expand 

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10 

Communication from the Commission to the Council on the activation of the general escape clause of 
the Stability and Growth Pact, Brussels, 20.3.2020, COM(2020) 123 final. 
Communication  from  the  Commission  to  the  Council  on  one  year  since  the  outbreak  of  COVID-19: 
fiscal policy response, Brussels, 3.3.2021, COM(2021) 105 final. 
The  estimates  on  the  fiscal  stance  and  its  components  in  this  recommendation  are  Commission 
the  Commission  2022  spring  forecast.  The 
estimates  based  on  the  assumptions  underlying 
Commission’s estimates of medium-term potential growth do not include the positive impact of reforms 
that are part of the Recovery and Resilience Plan and that can boost potential growth.  
Not financed by grants from the Recovery and Resilience Facility and other EU funds. 
Communication  from  the  Commission  to  the  Council:  Fiscal  policy  guidance  for  2023,  Brussels, 
2.3.2022, COM(2022) 85 final. 

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public investment for the green and digital transition and energy security, and sustain 
the purchasing power of the most vulnerable households so as to cushion the impact of 
the energy price hike and help limit inflationary pressures from second round effects 
via targeted and temporary measures; fiscal policy has to remain agile so as to adjust 
to  the  rapidly  evolving  circumstances,  and  be  differentiated  across  countries 
depending on their fiscal and economic situation, including as regards the exposure to 
the crisis and the inflow of displaced persons from Ukraine. 

(9) 

On  28  May  2021,  Ireland  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance  with  the  assessment  guidelines  of  Annex  V  to  that  Regulation.  On  8 
September 2021, the Council adopted its Decision on the approval of the assessment 
of  the  recovery  and  resilience  plan  for  Ireland11.  The  release  of  instalments  is 
conditional on a decision by the Commission, taken in accordance with Article 24(5) 
of  Regulation  (EU)  2021/241,  that  Ireland  has  satisfactorily  fulfilled  the  relevant 
milestones  and  targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory 
fulfilment  presupposes  that  the  achievement  of  preceding  milestones  and  targets  has 
not been reversed. 

(10)  On 4 May  2022, Ireland submitted its 2022 National Reform Programme and, on 29 
April  2022,  its  2022  Stability  Programme,  in  line  with  the  deadline  established  in 
Article 4 of Regulation  (EC) No 1466/97. To take account of their interlinkages, the 
two  programmes  have  been  assessed  together.  In  accordance  with  Article  27  of 
Regulation  (EU)  2021/241,  the  2022  National  Reform  Programme  also  reflects 
Ireland’s  bi-annual  reporting  on  the  progress  made  in  achieving  its  recovery  and 
resilience plan.  

in 

the 

relevant 

addressing 

Ireland’s  progress 

(11)  The Commission published the 2022 country report for Ireland12 on 23 May 2022. It 
country-specific 
assessed 
recommendations adopted by the Council in 2019, 2020 and 2021, and  took stock of 
Ireland’s implementation of the recovery and resilience plan, building on the Recovery 
and Resilience Scoreboard. Based on this analysis, the country report identified gaps 
with respect to those challenges that are not addressed or only partially addressed by 
the  recovery  and  resilience  plan,  as  well  as  new  and  emerging  challenges,  including 
those emerging from Russia’s invasion of Ukraine. It also assessed Ireland’s progress 
on  implementing  the  European  Pillar  of  Social  Rights  and  on  achieving  the  EU 
headline  targets  on  employment,  skills  and  poverty  reduction,  as  well  as  progress  in 
achieving the UN’s Sustainable Development Goals.  

(12)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No  1176/2011  for  Ireland  and  published  its  results  on  23  May  202213.  The 
Commission  concluded  that  Ireland  no  longer  is  experiencing  imbalances  related  to 
high  private,  government  and  external  debt.  Important  progress  has  been  made  in 

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Council Implementing Decision of 8 September 2021 on the approval of the assessment of the recovery 
and resilience plan for Ireland (ST 11046/21 + ADD 1). 
SWD(2022)615 final. 
SWD(2022)634 final. 

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reducing government and private indebtedness as well as net external liabilities, both 
before and since the pandemic. 

the economy  and  support 

(13)  On  20  July  2020,  the  Council  recommended  Ireland  to  take  in  2020  and  2021  all 
necessary measures, in  line with  the general  escape clause, to  effectively  address  the 
the  ensuing  recovery.  It  also 
pandemic,  sustain 
recommended  Ireland  to  pursue,  when  economic  conditions  allow,  fiscal  policies 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt 
sustainability,  while  enhancing  investment.  In  2021,  based  on  data  validated  by 
Eurostat, Ireland’s general government deficit fell from 5.1% of GDP in 2020 to 1.9% 
in  2021.  The  fiscal  policy  response  by  Ireland  supported  the  economic  recovery  in 
2021,  while  temporary  emergency  support  measures  declined  from  3.3%  of  GDP  in 
2020 to 2.7% in 2021. The measures taken by Ireland in 2021 have been in line with 
the Council Recommendation of 20 July 2020. The discretionary budgetary measures 
adopted by the government in 2020 and 2021 were mostly temporary or  matched by 
offsetting  measures.  Based  on  data  validated  by  Eurostat,  general  government  debt 
stood at 56.0 % of GDP in 2021. 

(14)  The  macroeconomic  scenario  underpinning  the  budgetary  projections  in  the  2022 
Stability Programme is realistic. The government projects real GDP to grow by 6.4% 
in  2022  and  4.4%  in  2023.  By  comparison,  the  Commission’s  2022  spring  forecast 
projects a lower real GDP growth of 5.4% in 2022 and a similar GDP growth of 4.4% 
in 2023, mainly due to lower personal  consumption and lower exports projections in 
2022.  In  its  2022  Stability  Programme,  the  government  expects  that  the  headline 
deficit will decrease to 0.4 % of GDP in 2022 and will turn to a surplus  of 0.2 % in 
2023. The decrease in 2022 mainly reflects strong growth in economic activity and the 
unwinding  of  most  emergency  measures.  According  to  the  Programme,  the  general 
government  debt-to-GDP  ratio  is  expected  to  decrease  to  50.1%  in  2022,  and  to 
decline to 46.3% in 2023. Based on policy measures known at the cut-off date of the 
forecast, the Commission 2022 spring forecast projects a government  deficit of 0.5% 
of  GDP  for  2022  and  a  surplus  of  0.4%  of  GDP  in  2023.  This  is  in  line  with  the 
government  balance  projected  in  the  2022  Stability  Programme.  The  Commission 
2022  spring  forecast  projects  a  similar  general  government  debt-to-GDP  ratio,  of 
50.3% in 2022 and 45.5% in 2023.  

Based  on  the  Commission  spring  2022  forecast,  the  medium-term  (10-year  average) 
potential output growth is estimated at 6.6%. However, this estimate does not include 
the  impact  of  the  reforms  that  are  part  of  the  Recovery  and  Resilience  Plan  and  can 
boost Ireland’s potential growth. 

(15) 

In 2022, the government phased out the majority of measures taken in response to the 
COVID-19 crisis, such that the temporary emergency support measures are projected 
to  decline  from  2.7%  of  GDP  in  2021  to  0.6%  in  2022.  The  government  deficit  is 
impacted  by  the  measures  adopted  to  counter  the  economic  and  social  impact  of  the 
increase in energy prices, which in the Commission spring 2022 forecast are estimated 
at 0.2% of GDP in 2022 and 0.0% of GDP in 2023.14 These measures mainly consist 
of  social  transfers  to  poorer  households  and  cuts  to  indirect  taxes  on  energy 

14 

The figures represent the level of annual budgetary costs of those measures taken since autumn 2021, 
including current revenue and expenditure as well as – where relevant – capital expenditure measures. 

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consumption. These measures have been announced as mostly temporary. However, in 
case  energy  prices  remain  elevated  also  in  2023,  some  of  these  measures  could  be 
continued.  Some  of  these  measures  are  not  targeted,  notably  the  payment  to  all 
domestic  electricity  accounts  and  across  the  board  cuts  in  excise  duties.  The 
government  deficit  is  also  impacted  by  the  costs  to  offer  temporary  protection  to 
displaced  persons  from  Ukraine,  which  in  the  Commission  2022  spring  forecast  are 
projected at 0.1% of GDP in 2022 and 0.1% in 2023.15   

(16)  On  18  June  2021,  the  Council  recommended  that  in  2022  Ireland16  pursues  a 
supportive  fiscal  stance,  including  from  the  impulse  provided  by  the  Recovery  and 
Resilience  Facility,  and  preserves  nationally-financed 
It  also 
recommended  Ireland  to  pursue,  when  economic  conditions  allow,  a  fiscal  policy 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  fiscal 
sustainability  in  the  medium  term,  and  at  the  same  time,  to  enhance  investment  to 
boost growth potential. 

investment. 

(17) 

In  2022,  based  on  the  Commission’s  2022  spring  forecast  and  including  the 
information incorporated in its 2022 Stability Programme, the fiscal stance is projected 
to be supportive at -0.3% of GDP, as recommended by the Council.17 Ireland plans to 
provide  continued  support  to  the  recovery  by  making  use  of  the  Recovery  and 
Resilience Facility to finance additional investment as recommended by the Council. 
The  positive  contribution  to  economic  activity  of  expenditure  financed  by  Recovery 
and  Resilience  Facility  grants  and  other  EU  funds  is  projected  to  remain  stable 
compared  to  2021.  Nationally-financed  investment  is  projected  to  provide  an 
expansionary  contribution  to  the  fiscal  stance  of  0.3  percentage  points  in  2022.18 
Therefore, Ireland plans to preserve nationally financed investment, as recommended 
by  the  Council.  At  the  same  time,  the  growth  in  nationally-financed  primary  current 
expenditure (net of new revenue measures) in 2022 is projected to provide a broadly 
neutral contribution of 0.0 percentage points to the overall fiscal stance. This includes 
the additional impact of the measures to address the economic and social impact of the 
increase in energy prices (0.2 % of GDP).  

(18) 

In 2023, the fiscal stance is projected in the Commission 2022 spring forecast at 1.8% 
of GDP on a no-policy change assumption.19 Ireland is projected to continue using the 
grants  from  the  Recovery  and  Resilience  Facility  in  2023  to  finance  additional 

15 

16 

17 

18 

19 

The total number of displaced persons from Ukraine to the EU is assumed to gradually reach 6 million 
by  the  end  of  2022,  and  their  geographical  distribution  is  estimated  based  on  the  size  of  the  existing 
diaspora, the relative population of the receiving Member State, and the actual distribution of displaced 
persons from Ukraine across the EU as of March 2022. For budgetary costs per person, estimates are 
based on the Euromod microsimulation model of the Commission’s Joint Research Centre, taking into 
account both cash transfers people may be eligible for as well as in-kind benefits such as education and 
healthcare. 
Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of Ireland, OJ C 304, 29.7.2021, p. 28 
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  neutral  contribution  of  0.0 
percentage points of GDP.  
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 

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investment in support of the recovery. The positive contribution to economic activity 
of  expenditure  financed  by  Recovery  and  Resilience  Facility  grants  and  other  EU 
funds is projected to remain stable compared to 2022. Nationally-financed investment 
is  projected  to  provide  a  neutral  contribution  to  the  fiscal  stance  of  0.0  percentage 
points in 2023.20 At the same time, the growth in nationally-financed primary current 
expenditure  (net  of  new  revenue  measures)  in  2023  is  projected  to  provide  a 
contractionary contribution of 1.8 percentage points  to  the overall fiscal  stance. This 
includes  the  impact  from  the  phasing  out  of  the  measures  addressing  the  increased 
energy prices (0.2 % of GDP). 

(19) 

In the 2022 Stability Programme, the general government balance is expected to reach 
a surplus of 1.2% of GDP in 2024 and 1.4% by 2025.The general government deficit 
is  thus  planned  to  remain  below  3%  of  GDP  over  the  programme  horizon.  These 
projections assume a cap to core expenditure growth at 5% per year. According to the 
Programme,  the  general  government  debt-to-GDP  ratio  is  expected  to  decrease  by 
2025, specifically with a decrease to 43.8% in 2024, and a decline to 40.7% in 2025. 
Based  on  the  Commission’s  analysis,  debt  sustainability  risks  appear  low  over  the 
medium term. 

(20)  The  overall  deficit  of  the  pension  system  is  expected  to  grow  in  the  long  term  as  a 
result of pension expenditure rising from 4.6% of GDP in 2019 to 7.6% in 2070. An 
independent pension commission made several recommendations to shore up the fiscal 
sustainability of the state pension system. 

(21) 

in  2019  and  2020, 

In accordance with Article 19(3), point (b), and Annex V, criterion 2.2, to Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. These help address 
all  or  a  significant  subset  of  the  economic  and  social  challenges  outlined  in  the 
country-specific  recommendations  addressed  to  Ireland  by  the  Council  in  the 
European  Semester 
to  any  country-specific 
recommendations  issued  up  to  the  date  of  adoption  of  a  plan.  In  particular,  the  plan 
focuses  on  reforms and  investments  that facilitate the  green  and digital  transition,  as 
well  as  on  active  labour  market  integration  support  and  upskilling.  The  investments 
also  help  front-load  mature  public  investment  projects,  promote  private  investment 
and  use  more  direct  funding  instruments  to  stimulate  research  and  innovation. 
Furthermore,  the  plan  commits  to  reforms  in  the  areas  of  social  and  affordable 
housing,  pensions,  healthcare  and  regulatory  barriers  to  entrepreneurship,  while  also 
introducing  measures  that  are  expected  to  partly  address  challenges  related  to  anti-
money laundering and aggressive tax planning.  

in  addition 

(22)  The  implementation  of  the  recovery  and  resilience  plan  of  Ireland  is  expected  to 
contribute  to  making  further  progress  on  the  green  and  digital  transition.  Measures 
supporting  the  climate  objectives  in  Ireland  account  for  42%  of  the  plan’s  total 
allocation, while measures supporting digital objectives account for 32% of the plan’s 
total allocation. The fully fledged implementation of the recovery and resilience plan, 
in line with the relevant milestones and targets, will help Ireland swiftly recover from 
the fallout of the COVID-19 crisis, while strengthening its resilience. The systematic 

20 

Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  neutral  contribution  of  0.0 
percentage points of GDP. 

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involvement of social partners and other  relevant  stakeholders  remains  important  for 
the  successful  implementation  of  the  recovery  and  resilience  plan,  as  well  as  other 
economic and employment policies going beyond the plan, to ensure broad ownership 
of the overall policy agenda. 

(23) 

Ireland has not yet submitted the Partnership Agreement and the other cohesion policy 
programming documents21.  In line with  Regulation (EU) 2021/1060  of the  European 
Parliament  and  of  the  Council  of  24  June  2021,  Ireland  shall  take  into  account  the 
relevant  country-specific  recommendations  in  the  programming  of  the  2021-2027 
cohesion  policy  funds.  This  is  a  prerequisite  for  improving  the  effectiveness  and 
maximising  the  added  value  of  the  financial  support  to  be  received  from  cohesion 
policy  funds,  while  promoting  the  coordination,  complementarity  and  coherence 
between  these  funds  and  other  Union  instruments  and  funds.  The  successful 
implementation  of  the  Recovery  and  Resilience  Facility  and  cohesion  policy 
programmes also depends on the removal of bottlenecks to investment to support the 
green and digital transition and balanced territorial development. 

(24)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan, Ireland faces a number of additional challenges related to the circular economy 
and  waste  water.  Waste  generation  in  Ireland  is  almost  25%  higher  than  the  EU 
average, making it the fifth largest generator of municipal waste per capita in the EU. 
Progress  made  on  increasing  recycling  rates  has  slowed  over  recent  years,  while 
incineration  has  significantly  increased.  The  circular  use  of  materials  in  Ireland  was 
1.8% in 2020, well below the EU average of 12.8%. More incentives and investment 
are  needed  for  Ireland  to  implement  a  more  ambitious  waste  and  circular  economy 
strategy, while avoiding the creation of excessive incineration capacity. Greater efforts 
are  needed  to  support  circular  business  models  that  cover  the  entire  life  cycle  of 
materials  in  order  to  reduce  waste  and  lower  resource  consumption.  While  some 
progress  has  been  made  in  facilitating  investment  in  waste  water  management,  less 
than 50% of  waste water in  Ireland is  treated in  compliance with  EU law. The most 
significant  impediment  to  surface  water  quality  in  Ireland  stems  from  excessive 
nutrients  from  both  untreated  waste  water  and  agriculture.  Significant  upgrades  in 
infrastructure  are  needed,  as  is  a  more  robust  approach  to  controlling  water 
contamination from agricultural activities. An appropriate waste water infrastructure is 
also  key to  improving the quality of life  and health conditions  of the general  public. 
Moreover,  adequate  waste  water  infrastructure  helps  improve  regional  development, 
generates sustainable growth and jobs, and is beneficial for tourism. 

(25) 

In  response  to  the  mandate  by  the  EU  Heads  of  State  or  Government  set  out  in  the 
Versailles Declaration, the REPowerEU plan aims to phase out the European Union’s 
dependence on fossil fuel imports from Russia as soon as possible. For this purpose, 
the most suitable projects, investments and reforms at national, regional and EU level 

21 

Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
Plus,  the  Cohesion  Fund,  the  Just  Transition  Fund  and  the  European  Maritime,  Fisheries  and 
Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the 
Internal  Security  Fund  and  the  Instrument  for  Financial  Support  for  Border  Management  and  Visa 
Policy. OJ L 231, 30.6.2021, p. 159. 

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are being identified in dialogue with the Member States. These measures aim to reduce 
overall reliance on fossil fuels and shift fossil fuel imports away from Russia.  

(26)  According  to  2020  data,  Ireland  does  not  import  crude  oil  and  gas  from  Russia. 
Ireland’s  dependence  on  Russian  coal  (22%  of  coal  imports)  is  lower  than  the  EU 
average,  in  a  context  where  also  the  weight  of  solid  fossil  fuels  in  the  energy  mix 
(7.6%)  is  lower  than  in  the  EU  average.  While  having  a  more  limited  exposure  to 
Russian  oil  and  gas  than  the  EU  average,  the  current  geopolitical  situation  and  high 
energy  prices  increase  the  urgency  for  Ireland  to  step  up  its  efforts  to  meet  the 
renewable targets laid down in the national energy and climate plan. Ireland’s climate 
action  plan  includes  the  ambitious  goal  of  transforming  the  country’s  energy  system 
by 2030. This will enable Ireland to achieve a 51% reduction in total greenhouse gas 
emissions between 2018 and 2030. The necessary  reforms  and the magnitude of this 
transformation  will  be  considerable,  from  securing  the  necessary  public  and  private 
investment, to delivering commitments on time. A comprehensive upgrade of Ireland’s 
energy  infrastructure  is  required  to  benefit  fully  from  renewable  energy  sources  and 
achieve Ireland’s climate objectives. Creating an investment framework conducive to 
facilitating and incentivising investment in the green energy transition will be key to 
reducing dependence on fossil fuels. For renewables, challenges persist in the planning 
and  permit  system,  particularly  on  the  long  duration  of  planning  permission 
procedures and the lengthy and costly appeal procedures. Improving the efficiency of 
the planning and permit system by ensuring that appropriate resources are available at 
all  stages  of  planning  processes  and  by  streamlining  the  overall  framework  could 
speed  up  large-scale  developments,  thereby  accelerating  the  green  transition.  In 
addition, expanding and reinforcing the electricity grid and supporting infrastructure at 
key  locations  will  be  pivotal  to  reducing  congestion.  In  particular,  new  electricity 
transmission interconnectors to neighbouring countries will support greater security of 
energy  supply.  Increased  storage  capacity  and  the  mass  roll-out  of  electric  car 
charging  points  will  also  be  needed.  In  addition,  the  development  of  a  national 
renewable hydrogen strategy would also help diversify the energy mix.  

(27)  Energy efficiency measures will play a key role in reducing energy consumption. High 
energy savings are necessary to achieve not only Ireland’s climate objectives, but also 
the  EU-wide  target  of  reducing  net  greenhouse  gas  emissions  by  55%.  While  the 
climate action plan is on the right track, Ireland has so far lagged behind in terms of 
greenhouse gas emission reductions. By applying the ‘energy efficiency first’ principle 
and pursuing deep energy savings in buildings, Ireland could reduce its dependence on 
energy  imports.  Higher  levels  of  electric  vehicles  could  take  advantage  of  domestic 
electricity  generation  rather  than  relying  on  fuel  imports.  As  the  climate  action  plan 
includes  a  target  of  one  million  electric  cars  on  Irish  roads  by  2030,  a  significant 
rollout of electric charging points is needed. Further increase in ambition for reducing 
greenhouse  gas  emissions  and  increasing  renewables  and  energy  efficiency  will  be 
needed for Ireland to be in line with the ‘Fit for 55’ objectives.    

(28)  While  the  acceleration  of  the  transition  towards  climate  neutrality  and  away  from 
fossil  fuels  will  create  significant  restructuring  costs  in  several  sectors,  Ireland  can 
make  use  of  the  Just  Transition  Mechanism  in  the  context  of  cohesion  policy  to 
alleviate the socio-economic impact  of the transition  in  the most  affected  regions.  In 
addition,  Ireland  can  make  use  of  the  European  Social  Fund  Plus  to  improve 
employment opportunities and strengthen social cohesion. 

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(29) 

(30) 

In  the  light  of  the  Commission’s  assessment,  the  Council  has  examined  the  2022 
Stability Programme and its opinion22 is reflected in recommendation (1) below. 

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union,  the  Council  recommended  that  the  euro  area  Member  States  take  action, 
including 
the 
recommendation on the economic policy of the euro area. For Ireland, this is reflected 
in particular in recommendations (1) and (2) below. 

resilience  plans, 

recovery  and 

implement 

through 

their 

to 

HEREBY RECOMMENDS that Ireland take action in 2022 and 2023 to:  

1. 

2. 

3. 

4. 

In 2023, ensure that the growth of nationally-financed current expenditure is in line 
with  an  overall  neutral  policy  stance,  taking  into  account  continued  temporary  and 
targeted support to households and firms most vulnerable to energy price hikes and 
to  people  fleeing  Ukraine.  Stand  ready  to  adjust  current  spending  to  the  evolving 
situation.  Expand  public  investment  for  the  green  and  digital  transition  and  for 
energy  security,  including  by  making  use  of  the  RRF,  RePowerEU  and  other  EU 
funds. For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent 
medium-term  fiscal  positions. Address  the expected increase in  age-related pension 
expenditure by ensuring the fiscal sustainability of the state pension system. 

Proceed with the implementation of its recovery and resilience plan, in line with the 
milestones  and  targets  included  in  the  Council  Implementing  Decision  of  8 
September  2021.  Submit  the  2021-2027  cohesion  policy  programming  documents 
with  a  view  to  finalising  their  negotiations  with  the  Commission  and  subsequently 
starting their implementation. 

Focus  efforts  on  boosting  the  circular  economy.  In  particular,  develop  both 
infrastructure and policies to prevent waste and increase reused and recycled content, 
and develop a more effective system for the separate collection of recyclable waste, 
including biodegradable waste. Promote safer and cleaner waste water circuits. 

Reduce  overall  reliance  on  fossil  fuels.  Accelerate  the  deployment  of  renewable 
energy, in particular offshore wind, including by introducing reforms to improve the 
efficiency of the planning and permit system, particularly by reducing the duration of 
procedures.  Upgrade  energy  infrastructure,  including  for  storage.  Ensure  the  fast 
implementation of deep building retrofits. Accelerate the electrification of transport, 
including by installing charging facilities. 

Done at Brussels, 

For the Council 
The President 

22 

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

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