Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Ireland
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Ireland, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, social policy, stability pact, water policy

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   EUROPEAN COMMISSION  Brussels, 19.6.2024  COM(2024) 607 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Ireland {SWD(2024) 600 final} - {SWD(2024) 607 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies 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 Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29  April  2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular 
Article 3(3) 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) 

The  REPowerEU  Regulation2,  adopted  on  27  February  2023,  aims  to  phase  out  the 
EU’s  dependency  on  Russian  fossil  fuel  imports.  This  would  help  achieve  energy 
security  and  diversify  the  EU’s  energy  supply,  while  increasing  the  uptake  of 
renewables,  energy  storage  capacities  and  energy  efficiency.  Ireland  added  a  new 
REPowerEU chapter to its national recovery and resilience plan in order to finance key 
reforms and investments that will help achieve the REPowerEU objectives. 

(2) 

On  16  March  2023,  the  Commission  issued  a  Communication  on  the  ‘Long-term 
competitiveness of the EU: looking beyond 2030’3, in order to inform policy decisions 

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Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  (1),  which  established  the 
Recovery and Resilience Facility, entered into force on 19 February 2021. The Recovery and Resilience 
Facility  provides  financial  support  to  the  Member  States  for  the  implementation  of  reforms  and 
investment, entailing a fiscal impulse financed by the EU. In line with the European Semester priorities 
it helps achieve the economic and social recovery and implement sustainable reforms and investment, in 
particular  to  promote  the  green  and  digital  transitions  and  make  the  Member  States’  economies  more 
resilient. It also helps strengthen public finances and boost growth and job creation in the medium and 
long term, improve territorial cohesion within the EU and support the continued implementation of the 
European Pillar of Social Rights. 
Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27  February  2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1). http://data.europa.eu/eli/reg/2023/435/oj. 
COM(2023) 168 final. 

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(3) 

(4) 

and  create  the  framework  conditions  for  increasing  growth.  The  Communication 
frames competitiveness along nine mutually reinforcing drivers. Among these drivers, 
access to private capital, research and innovation, education and skills, and the single 
market  emerge  as  paramount  policy  priorities  for  reform  and  investment  to  address 
current productivity challenges as well as to build up the long-term competitiveness of 
the EU and its Member  States.  On 14 February  2024, the Commission  followed this 
Communication  with  the  Annual  Single  Market  and  Competitiveness  Report4.  The 
report  details  the  competitive  strengths  and  challenges  of  Europe's  Single  Market, 
tracking yearly developments according to the nine competitiveness drivers identified.    

On 21 November 2023, the Commission adopted the 2024 Annual Sustainable Growth 
Survey5, marking the start of the 2024 cycle of the European Semester for economic 
policy  coordination.  The  European  Council  endorsed  the  priorities  of  the  survey 
around  the  four  dimensions  of  competitive  sustainability  on  22  March  2024.  On  21 
November 2023, on the basis of Regulation (EU) No 1176/2011, the Commission also 
adopted the 2024 Alert Mechanism Report, in which it did not identify Ireland as one 
of  the  Member  States  that  may  be  affected  or  may  be  at  risk  of  being  affected  by 
imbalances, and for which an in-depth review would be needed. On the same date the 
Commission also adopted an opinion on the 2024 draft budgetary plan of Ireland. The 
Commission  also  adopted  a  recommendation  for  a  Council  recommendation  on  the 
economic policy of the euro area, which the Council adopted on 12 April 2024, as well 
as the proposal  for the 2024 Joint Employment Report analysing the implementation 
of  the  Employment  Guidelines  and  the  principles  of  the  European  Pillar  of  Social 
Rights, which the Council adopted on 11 March 2024.  

On  30  April  2024,  the  EU’s  new  economic  governance  framework  came  into  force. 
The  framework  includes  the  new  Regulation  of  the  European  Parliament  and  of  the 
Council  (EU)  2024/1263  on  the  effective  coordination  of  economic  policies  and 
multilateral  budgetary  surveillance  and  repealing  Council  Regulation  (EC)  No 
1466/97.  It  also  includes  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure  and  the  amended  Directive 
2011/85/EU  on  the  budgetary  frameworks  of  Member  States6.  The  objectives  of  the 
new  framework  are  public  debt  sustainability  and  sustainable  and  inclusive  growth 
through gradual  fiscal consolidation  as  well as reforms  and investments.  It  promotes 
national  ownership  and  has  a  greater  medium-term  focus,  combined  with  more 
effective and coherent enforcement. Each Member State should submit to the Council 
and  to  the  Commission  a  national  medium-term  fiscal-structural  plan.  National 
medium-term  fiscal-structural  plans  contain  the  fiscal,  reform  and  investment 
commitments  of  a  Member  State,  covering  a  planning  horizon  of  4  years  or  5  years 
depending on the regular length of the national legislature. The net expenditure7path in 

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COM(2024) 77 final. 
COM(2023) 901 final. 
Council  Regulation  (EU)  2024/1264  of  29  April  2024  amending  Regulation  (EC)  No  1467/97  on 
speeding  up  and  clarifying  the  implementation  of  the  excessive  deficit  procedure  (OJ  L,  2024/1264, 
30.4.2024,  ELI:  http://data.europa.eu/eli/reg/2024/1264/oj)  and  Council  Directive  (EU)  2024/1265  of 
29  April  2024  amending  Directive  2011/85/EU  on  requirements  for  budgetary  frameworks  of  the 
Member States (OJ L, 2024/1265, 30.4.2024, ELI: http://data.europa.eu/eli/dir/2024/1265/oj). 
Net expenditure as defined in Article 2 of Council Regulation (EU)2024/1263 of 29 April 2024 (OJ L 
2024/1263,  30.4.2024,  ELI:  http://data.europa.eu/eli/reg/2024/1263/oj).  Net  expenditure  means 
government  expenditure  net  of  (i)  interest  expenditure,  (ii)  discretionary  revenue  measures,  (iii) 
expenditure  on  programmes  of  the  Union  fully  matched  by  Union  funds  revenue,  (iv)  national 

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the national medium-term fiscal-structural plans should comply with the requirements 
of  Regulation  (EU)  2024/1263,  including  the  requirements  to  put  or  keep  general 
government debt on a plausibly downward path by the end of the adjustment period at 
the latest, or for it to remain at prudent levels below 60% of GDP, and to bring and/or 
maintain  the  government  deficit  below  the  3%  of  GDP  reference  value  over  the 
medium  term.  Where  a  Member  State  commits  to  a  relevant  set  of  reforms  and 
investments in accordance with the criteria set out in Regulation (EU) 2024/1263, the 
adjustment period may be extended by 3 years at most. For the purpose of supporting 
the  preparation  of  those  plans,  on  [21  June]  2024,  the  Commission  is  set  to  provide 
Member States with  guidance on the content  of  the plans and the subsequent  annual 
progress  reports  that  they  will  need  to  submit  and,  in  accordance  with  Article  5  of 
Regulation  (EU)  2024/1263,  will  transmit  to  them  technical  guidance  on  the  fiscal 
adjustments  (reference  trajectories  and  technical  information  where  applicable). 
Member  States  should  submit  their  medium-term  fiscal-structural  plans  by  20 
September  2024,  unless  the  Member  State  and  the  Commission  agree  to  extend  the 
deadline by a reasonable period of time. Member States should ensure the involvement 
of their national parliaments, and the consultation of independent fiscal institutions, of 
social partners and other national stakeholders, as appropriate. 

In 2024, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  The  full 
implementation  of  the  recovery  and  resilience  plans  remains  essential  for  delivering 
the policy priorities under the European Semester, as the plans help effectively address 
all  or  a  significant  subset  of  challenges  identified  in  the  relevant  country-specific 
recommendations  issued  in  recent  years.  The  2019,  2020,  2022  and  2023  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.   

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  Ireland8, which was amended on  8 December 
2023  following  Article  18(2)  of  Regulation  (EU)  2021/241  to  update  the  maximum 
financial contribution  for non-repayable financial  support.  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. 

(5) 

(6) 

(7) 

On 30 April 2024, Ireland submitted its 2024 National Reform Programme and, on 10 
May 2024, its 2024 Stability Programme, in line with Article 4(1) of Regulation (EC) 
No  1466/97.  In  accordance  with  Article  27  of  Regulation  (EU)  2021/241,  the  2024 

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expenditure  on  co-financing  of  programmes  funded  by  the  Union,  (v)  cyclical  elements  of 
unemployment benefit expenditure, and (vi) one-offs and other temporary measures. 
Council Implementing Decision of 8 December 2023 on the approval of the assessment of the recovery 
and resilience plan for Ireland (15965/2023). 

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(8) 

(9) 

in 

the 

relevant 

addressing 

Ireland’s  progress 

National Reform Programme also reflects Ireland’s biannual reporting on the progress 
made in achieving its recovery and resilience plan.  
The  Commission  published  the  2024  country  report  for  Ireland9  on  19  June  2024.  It 
assessed 
country-specific 
recommendations  adopted by the Council  between 2019  and  2023 and  took stock of 
Ireland’s  implementation  of the recovery and resilience plan. 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. 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.  
Based on data validated by Eurostat10, Ireland’s general government surplus remained 
stable at 1.7% of GDP in 2023, while the general government debt fell from 44.4% of 
GDP at the end of 2022 to 43.7% at the end of 2023.  

(10)  On  12  July  2022,  the  Council  recommended11  that  Ireland  take  action  to  ensure  in 
2023 that the growth of nationally financed primary current expenditure is in line with 
an overall neutral policy stance12,taking into account continued temporary and targeted 
support to households and firms most vulnerable to energy price hikes and to people 
fleeing  Ukraine.  At  the  same  time,  Ireland  was  recommended  to  adjust  current 
spending  to  the  evolving  situation.  Ireland  was  also  recommended  to  expand  public 
investment  for  the  green  and  digital  transitions,  and  for  energy  security  taking  into 
account  the  REPowerEU  initiative,  including  by  making  use  of  the  Recovery  and 
Resilience  Facility  and  other  Union  funds.  In  2023,  according  to  the  Commission 
estimates, the fiscal stance13 was expansionary, by 0.9% of GDP, in a context of high 
inflation.  The  growth  in  nationally  financed  primary  current  expenditure  (net  of 
discretionary revenue measures) in 2023 provided an expansionary contribution to the 
fiscal  stance  of  0.8%  of  GDP.  This  includes  the  reduced  cost  of  the  targeted 
emergency support measures to households and firms most vulnerable to energy price 
hikes by 0.1% of GDP. This also includes higher costs to offer temporary protection to 
displaced persons from Ukraine (by 0.1% of GDP). The expansionary contribution of 
nationally financed net primary current expenditure in 2023 was therefore not due to 
the  targeted  emergency  support  to  households  and  firms  most  vulnerable  to  energy 
price  hikes,  and  only  partly  due  to  support  to  people  fleeing  Ukraine.  The 
expansionary  growth  in  nationally  financed  primary  current  expenditure  (net  of 
discretionary  revenue  measures)  was  also  driven  by  permanent  increases  in  public 

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SWD(2024) 607 final. 
Eurostat-Euro Indicators, 22.4.2024 
Council  Recommendation  of  12  July  2022  on  the  2022  National  Reform  Programme  of  Ireland  and 
delivering a Council opinion on the 2022 Stability Programme of Ireland, OJ C 334, 1.9.2022, p. 52. 
Based on the Commission Spring 2024 Forecast, the medium-term potential output growth of Ireland in 
2023, which is used to measure the fiscal stance, is estimated at  9.2% in nominal terms, based on the 
10-year average real potential growth rate and the 2023 GDP deflator. 
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 
those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure  net  of  discretionary  revenue  measures  (and  excluding  temporary  emergency  measures 
related to the COVID-19 crisis) and including expenditure financed by non-repayable support (grants) 
from the Recovery and Resilience Facility and other Union funds. 

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sector  wages  and  social  benefits,  and  higher  spending  on  healthcare.  In  sum,  the 
growth of nationally financed primary current expenditure in 2023 was not in line with 
the  Council  recommendation.  Expenditure  financed  by  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds  amounted  to  0.1%  of  GDP  in  2023.  Nationally 
financed  investment  amounted  to  2.3%  of  GDP  in  2023,  representing  an  increase  of 
0.2  percentage  points  as  compared  to  2022.  Ireland  financed  additional  investment 
through  the  Recovery  and  Resilience  Facility  and  other  EU  funds.  Ireland  financed 
public investment for the green and digital transitions, and for energy security, such as 
electrification  in  commuter  rail  and  a  programme  to  provide  digital  infrastructure  to 
schools, which are partly funded by the Recovery and Resilience Facility and other EU 
funds. 

(11)  The key projections in the 2024 Stability Programme can be summarised as follows. 
The  macroeconomic  scenario  underpinning  the  budgetary  projections  foresees  real 
GDP to grow by 2.6% in 2024 and 3.9% in 2025, while it projects HICP inflation at 
2.1% in both 2024 and 2025. The general government surplus is expected to decrease 
to  1.6%  of  GDP  in  2024  and  increase  to  1.7%  of  GDP  in  2025,  while  the  general 
government  debt-to-GDP  ratio  is  set  to  decrease  to  41.5%  by  the  end  of  2024  and 
39.5% by the end of 2025. After 2025, the general government surplus is projected to 
decrease  to  1.5%  of  GDP  in  2026,  and  increase  to  1.7%  in  2027.  Therefore,  the 
general  government  balance  is  planned  to  remain  below  the  3%  of  GDP  deficit 
reference  value  over  the  programme  horizon.  In  turn,  after  2025,  the  general 
government  debt-to-GDP  ratio  is  projected  to  decrease  gradually  to  37.8%  in  2026, 
and 36.7% in 2027.  

(12)  The  Commission  Spring  2024  Forecast  projects  real  GDP  to  grow  by  1.2%  in  2024 
and 3.6% in 2025, and HICP inflation to stand at 1.9% in 2024 and 1.8% in 2025. 

(13)  The Commission Spring 2024 Forecast projects a government surplus of 1.3% of GDP 
in 2024, while the general government debt-to-GDP ratio is set to decrease to 42.5% 
by  the  end  of  2024.  The  lower  surpluses  reflect  a  cautious  approach  as  regards  the 
possible persistence of high expenditure growth in 2024 and 2025. The decrease of the 
debt-to-GDP ratio in 2024 mainly reflects the government surplus and would be larger 
were  it  not  for  significant  stock  flow  adjustments.  Based  on  the  Commission’s 
estimates, the fiscal stance is projected to be broadly neutral at -0.1% of GDP in 2024. 

(14)  Expenditure amounting to less than 0.1% of GDP is expected to be financed by non-
repayable  support  (“grants”)  from  the  Recovery  and  Resilience  Facility  in  2024, 
similarly  to  2023,  according  to  the  Commission  Spring  2024  Forecast.  Expenditure 
financed  by  Recovery  and  Resilience  Facility  grants  will  enable  high-quality 
investment and productivity-enhancing reforms without a direct impact on the general 
government balance and debt of Ireland. 

(15)  On  14  July  2023,  the  Council  recommended14  that  Ireland  maintain  a  sound  fiscal 
position  in  2024.  When  executing  their  2023  budgets  and  preparing  their  Draft 
Budgetary  Plans  for  2024,  Member  States  were  invited  to  take  into  account  that  the 
Commission  would  propose  to  the  Council  the  opening  of  deficit-based  excessive 
deficit procedures  based on the outturn data for 2023. According to  the Commission 
Spring  2024  Forecast,  Ireland’s  structural  balance  is  projected  at  1.8%  of  GDP  in 
2024,  from  1.0%  in  2023,  thereby  above  the  country’s  medium-term  budgetary 

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Council  Recommendation  of  14  July  2023  on  the  2023  National  Reform  Programme  of  Ireland  and 
delivering a Council opinion on the 2023 Stability Programme of Ireland, OJ C 312, 1.9.2023, p. 58. 

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objective  (MTO)  of  a  structural  balance  of  -0.5%  of  GDP.  This  is  in  line  with  what 
was recommended by the Council. 

(16)  Moreover,  the  Council  recommended  that  Ireland  take  action  to  wind  down  the 
emergency  energy  support  measures  in  force  as  soon  as  possible  in  2023  and  2024. 
The Council further specified that, should renewed energy price increases necessitate 
new or continued support measures, Ireland should ensure that these were targeted at 
protecting  vulnerable  households  and  firms,  fiscally  affordable,  and  preserve 
incentives for energy savings. According to the Commission Spring 2024 Forecast, the 
net  budgetary  cost15  of  emergency  energy  support  measures  is  estimated  at  0.4%  of 
GDP in 2023 and projected at 0.1% in 2024 and 0.0% in 2025. The emergency energy 
support  measures  are  projected  to  be  wound  down  as  soon  as  possible  in  2023  and 
2024. This is in line with what was recommended by the Council. 

(17) 

In  addition,  the  Council  also  recommended  that  Ireland  preserve  nationally  financed 
public  investment  and  ensure  the  effective  absorption  of  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds,  in  particular  to  foster  the  green  and  digital 
transitions.  According  to  the  Commission  Spring  2024  Forecast,  nationally  financed 
public investment is projected to increase to 2.5% of GDP in 2024 (from 2.3% of GDP 
in 2023). This is in line with what was recommended by the Council. In turn, public 
expenditure  financed  from  revenues  from  EU  funds,  including  Recovery  and 
Resilience Facility grants, is expected to remain stable at 0.1% of GDP in 2024.  

(18)  Based on policy measures known at the cut-off date of the forecast and on a no-policy-
change  assumption,  the  Commission  Spring  2024  Forecast  projects  a  government 
surplus of 1.2% of GDP in 2025. The general government debt-to-GDP ratio is set to 
decrease to 41.3% by the end of 2025. The decrease of the debt-to-GDP ratio in 2025 
mainly reflects the government surplus and would be larger were it not for significant 
stock flow adjustments. 

(19)  There  are  concerns  related  to  the  impact  on  fiscal  sustainability  of  the  healthcare 
system’s  cost--effectiveness.  Ireland  is  the  only  country  in  the  EU  without  universal 
primary care coverage, and this puts more pressure on hospitals. Population ageing is 
expected  to  put  pressure  on  the  healthcare  system:  It  is  projected  to  lead  to  a  1.5 
percentage point increase in public healthcare expenditure as a percentage of GDP by 
2070 for Ireland, well above the projected 0.4 percentage point increase for the EU. 

(20) 

In accordance with Article 19(3), point (b), and Annex V, criterion 2.2 of 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 are expected 
to  help  effectively  address  all  or  a  significant  subset  of  challenges  identified  in  the 
relevant  country-specific  recommendations.  Within  this  tight  timeframe,  proceeding 
swiftly  with  the  effective  implementation  of  the  plan,  including  the  REPowerEU 
chapter  once  adopted,  is  essential  to  boost  Ireland’s  long-term  competitiveness 
through the green and digital transition, while ensuring social fairness.  To deliver on 
the commitments of the plan by August 2026, it is essential for Ireland to continue the 
implementation  of  reforms  and  to  accelerate  investments  by  addressing  emerging 
delays  while  ensuring  strong  administrative  capacity.  This  includes  the  timely 
submission of the forthcoming payment requests. The systematic involvement of local 
and regional  authorities, social partners,  civil  society and other relevant  stakeholders 

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Council  Recommendation  of  14  July  2023  on  the  2023  National  Reform  Programme  of  Ireland  and 
delivering a Council opinion on the 2023 Stability Programme of Ireland, OJ C 312, 1.9.2023, p. 58. 

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remains essential to ensure broad ownership for the successful implementation of the 
recovery and resilience plan. 

(21)  As  part  of  the  mid-term  review  of  the  cohesion  policy  funds,  in  accordance  with 
Article  18  of  Regulation  (EU)  2021/1060,  Ireland  is  required  to  review  each 
programme  by  March  2025,  taking  into  account,  among  other  things,  the  challenges 
identified in the 2024 country-specific recommendations, as well as its national energy 
and climate plan. This  review  forms the basis for the definitive allocation of the EU 
funding  included  in  each  programme.  Ireland  has  made  progress  in  implementing 
cohesion  policy  and  the  European  Pillar  of  Social  Rights,  but  challenges  remain. 
Ireland  continues  to  register  important  economic  and  social  disparities  between 
metropolitan  areas  and  other  areas  in  the  country,  especially  in  the  Northern  and 
Western  (NW)  region.  There  are  significant  weaknesses  in  the  labour  market 
integration  of  disadvantaged  groups,  who  are  facing  disproportionately  high  poverty 
risks and social exclusion. Whereas priorities agreed in the programmes continue to be 
relevant, it is important to accelerate their implementation. The objective to strengthen 
innovation  eco-systems  at  regional  level  is  still  relevant,  which  includes  the  aim  to 
reduce  the  innovation  gap  between  the  NW  region  and  the  other  two  regions. 
Facilitating  access  to  social  services  and  developing  targeted  skills  measures  for  the 
most disadvantaged groups to address labour shortages, poverty and social exclusion 
remains  important.  Ireland  could  leverage  the  Strategic  Technologies  for  Europe 
Platform initiative to boost investments in digitalisation and digital transformation in 
small and medium-sized enterprises and research for clean energy technologies in line 
with the smart specialisation strategy and the ‘Vision of Ireland’s Industry 4.0 Strategy 
2020-2025’ and the establishment of Future Manufacturing Ireland. 

(22)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan  and  other  EU  funds,  Ireland  faces  several  challenges  related  to  drinking  water 
supply  and  wastewater  treatment,  as  well  as  the  waste  management  system.  In 
addition,  challenges persist in  relation  to  the electricity system,  energy infrastructure 
and smart grid technologies, and energy efficiency. 

(23)  There  are  still  significant  shortfalls  in  the  water  and  wastewater  sectors  that  affect 
water  quality,  which  are  exacerbated  by  persistently  high  leakage  rates  in  the  water 
supply  system.  Ireland  is  underperforming  on  the  standards  outlined  in  the  Urban 
Wastewater Treatment  Directive, as a significant amount of urban wastewater is still 
untreated or uncollected, largely due to outdated infrastructure. A significant share of 
the  Irish  population  is  still  not  connected  to  at  least  secondary  wastewater.  Water 
abstraction  and  changes  to  waterbodies  are  not  sufficiently  controlled  due  to  the 
absence  of  a  proper  legal  framework.  The  lack  of  adequate  infrastructure  to  supply 
drinking  water  and  for  wastewater  collection  and  treatment  may  limit  building  of 
housing or industry in certain areas, therefore affecting competitiveness. 

(24) 

Ireland’s  energy  system  continued  to  show  signs  of  vulnerability  in  2023  as  retail 
electricity  prices  remained  higher  than  the  EU  average.  In  the  second  half  of  2023, 
Ireland had the highest electricity prices for household consumers in the EU, and these 
remain  high.  Ireland  has  established  ambitious  targets  for  the  share  of  renewable 
electricity  generation  and  has  started  to  deliver  on  the  deployment  of  additional 
renewable  energy  sources,  which  will  put  a  strain  on  the  electricity  system  through 
increased  volumes  of  variable  generation.  Additional  grid  capacity  is  needed  at  both 
transmission and distribution levels, including new cross-border projects. The impact 
of insufficient grid capacity also impacts competitiveness, especially when it comes to 
attracting and keeping companies. Capacity constraints also result in higher production 

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costs,  which  can  deter  businesses.  The  national  regulatory  authority  has  been  tasked 
with delivering a plan for demand-side flexibility to allow the Irish energy system to 
operate  efficiently  with  high  shares  of  renewable  electricity.  Demand-side  flexibility 
and  substantial  upgrades  to  the  transmission,  distribution  and  storage  infrastructure 
will  be  crucial  if  Ireland  is  to  achieve  the  target  of  80%  renewable  electricity  as 
established  in  its  Climate  Action  Plan,  reduce  curtailment  of  existing  renewable 
generation,  and  integrate  the  planned  5GW  of  offshore  wind  generation  by  2030. 
Further  action to  promote demand-side flexibility  and the participation  of  consumers 
in  distributed  energy  resources  is  needed  to  enable  consumer  empowerment  while 
improving energy system flexibility. This includes consumer participation in balancing 
and flexibility services.  

(25)  Despite  progress  in  the  implementation  of  initiatives  to  improve  energy  efficiency, 
further  measures  are  still  needed  to  reduce  energy  consumption  and  decarbonise  the 
building stock, in particular residential energy upgrades, retrofitting and an accelerated 
transition  to  renewable  heating.  Ireland  has  still  not  managed  to  curb  energy  use, 
which  is  projected  to  increase  towards  2030  according  to  Ireland’s  National  Energy 
Projections report and exceed the sectoral emissions ceilings established for the built 
environment sector. While the actual volume of deep retrofits remains limited, Ireland 
has started to implement the ambitious targets of  its Climate Action Plan. More than 
EUR 400 million was allocated to energy efficiency in buildings under the 2024 State 
budget.  Implementing  the  comprehensive  energy  savings  programmes  for  the  public 
sector  could  increase  the  energy  performance  of  the  public  building  stock.    Further 
efforts  are  also  needed  to  address  energy  consumption  in  transport  and  industry  by 
further  electrifying  commuter  rails  and  incentivising  energy  monitoring  and  control 
systems.  

(26) 

In view of the close interlinkages between the economies of euro area Member States 
and of their collective contribution to the functioning of the Economic and Monetary 
Union,  in  2024  the  Council  recommended  that  the  euro  area  Member  States  take 
action,  including  through  their  recovery  and  resilience  plans,  to  implement  the 
Ireland, 
recommendation  on 
recommendations (1), (2), (3) and (4) help implement the first, second and fourth euro 
area recommendations. 

the  economic  policy  of 

the  euro  area.  For 

HEREBY RECOMMENDS that Ireland take action in 2024 and 2025 to:  

1. 

2. 

3. 

4. 

Submit  the  medium-term  fiscal-structural  plan  in  a  timely  manner.  Address  the 
expected increase in age-related expenditure by making the healthcare system more 
cost-effective.   

Address emerging delays to allow for continued, swift and effective implementation 
of the recovery and resilience plan, including the REPowerEU chapter once adopted, 
ensuring  completion  of  reforms  and  investments  by  August  2026.  Accelerate  the 
implementation  of  cohesion  policy  programmes.  In  the  context  of  their  mid-term 
review,  continue  focusing  on 
the 
opportunities  provided by the  Strategic Technologies for Europe Platform initiative 
to improve competitiveness.   

the  agreed  priorities,  while  considering 

Increase  investments  in  drinking  water  and  wastewater  infrastructure  to  improve 
water quality and reduce leakages.  

Increase efforts to improve the flexibility of the electricity system and modernise and 
expand  grid  capacity.  Develop  and  implement  a  strategy  to  promote  demand-side 

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response  and  streamline  planning  and  permitting  for  storage  facilities  and  grid 
connectors.  Increase  efforts  to  improve  energy  performance  of  private  buildings  to 
reduce energy bills and energy system costs.  

Done at Brussels, 

For the Council 
The President 

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