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Sam Boal
Cabinet Reshuffle

Donohoe refuses to be drawn on Eurogroup issue but his party leader hopes he can keep the role

Public Expenditure Minister Michael McGrath is expected to take over the finance ministry in December.

TÁNAISTE LEO VARADKAR has said that Paschal Donohoe might not have to remain as finance minister in order to retain his position as president of the influential Eurogroup. 

The Tánaiste said the assumption that Donohoe has to be the Minister for Finance in order to continue in his position in the Eurogroup “is being made erroneously”. 

His comments come after Taoiseach Micheál Martin said it was his expectation that the Minister for Public Expenditure Michael McGrath would take over the finance ministry in December’s Cabinet reshuffle.

The Eurogroup takes decisions on policy issues related to the management of the Euro-area economy. It is made up of finance ministers from each member state and usually meets once a month. Donohoe was elected as its president in 2020.

However, if he does swap roles with McGrath in December, it it likely that Ireland would lose the chair position of the group.

When asked about the matter yesterday, Martin told RTÉ’s Morning Ireland programme that the “fundamental principle of the government” laid out at the formation of the Government two years ago was “parity of esteem between parties”.

He said that if one party held the role of Taoiseach, it was expected the other party would hold the finance ministry.

“That was clear and that was understood at the time,” Martin said.

Speaking at Government Buildings today, Varadkar said: “I think an assumption is being made that Minister Donohoe has to be the Minister of Finance to continue to chair the Eurogroup. That is not necessarily the case, so that assumption is being made erroneously.”

He said he had not been lobbied by anyone about retaining Donohoe as finance minister, and that there had been no discussions about the matter between the coalition leaders, adding that their focus was entirely on the upcoming budget. 

However, he said that the fact that an Irish person holds the presidency of the Eurogroup “is of benefit to Ireland”.

“When an international agreement was being made on corporate tax, the fact that the person speaking on behalf of the Eurozone was a minister in the Irish government really was very useful, and helped us to craft those proposals in a way that protected our interests,” he said.

“I think everyone knows how important it is that we protect our corporate tax base here in Ireland. I think 10 or 11 years ago, when decisions were being made about bank guarantees and bank bailouts and burning bondholders and all that, it’s a real shame that the president of the Eurogroup at the time wasn’t an Irish person.

It might have been a different decision had there been an Irish person in the room. We would have been in a very different place.

Michael McGrath indicated at the Fianna Fáil think-in yesterday that he would represent Ireland at the Eurogroup if he were to take over as finance minister in December. 

“It is always the case that the finance minister of the country attends the Eurogroup and we would expect that to continue,” he told reporters.

Speaking at the launch of the Commission on Taxation and Welfare’s report in Drumcondra today, Donohoe would not be drawn on whether he would like to continue in his role as Eurogroup chair.

“The only job I’m focused on is getting the budget ready for two weeks time,” he said.

“My future and the jobs that members of government hold are a matter for the party leaders, and they will deal with all of this in the run up to the transition in our government in December.

“All my focus is on the budget, presenting it, bringing out a Budget that can make a difference, that can get the balance right and can help.” 

The Dáil returned today after the nine-week summer break, with the Government continuing to discuss what measures will be included in the upcoming budget to address the current cost-of-living crisis and reduce soaring energy bills.

Budget 2023 will be announced on 27 September, two weeks earlier than usual.

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