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Varadkar at Davos: 'We will not go into recession, but there will be a slowdown'

Leo Varadkar is attending the World Economic Forum in Davos, Switzerland today.

Tánaiste Leo Varadkar speaking to Bloomberg this morning in Davos.
Tánaiste Leo Varadkar speaking to Bloomberg this morning in Davos.
Image: Bloomberg/Screengrab

TÁNAISTE LEO VARADKAR has said he doesn’t think we are facing into a recession. 

Speaking to Bloomberg at the World Economic Forum in Davos, Switzerland today, Varadkar said his own sense is that the Eurozone “will not go into recession”, though he added he expects “there will be a slowdown”. 

The Tánaiste said that economic forecasts are as accurate as weather forecasts, stating that one has to be very careful about making them.

“So I don’t think we’re facing into recession, not as rapid growth as you might have hoped for, certainly,” he said.

Varadkar said nothing can be taken for granted in the current economic landscape. 

The European Union has fiscal levers and some of the rules around the Stability Growth Pact are being extended, he added.

While the Tánaiste was keen to stress that Ireland’s economy is doing well, he acknowledged that housing remains a problem. 

“I do think we have a problem in the world, and it’s not just in Ireland,” he said.

The problems that people face in San Francisco and Seattle are similar to those problems faced by people in Dublin, he said, saying “there is a global element to our housing crisis”.

Housing 

“And I can understand the anger and frustration around it, people in their 20s and 30s, and even 40s with good jobs, who can’t become homeowners. And that’s a real problem for society. It’s an intergenerational injustice. It is causing people to turn to populism.

“And we’re doing everything we can to pull out the stops to increase housing supply, and also help first time buyers to get their first home,” he said.

One thing he said is quite urgent is the need increase wages and bring pay up more into line with what people need to live.

He noted that the Irish Government plans to bring in living wage this year, as well as sick pay entitlements. 

Speaking about Northern Ireland and Brexit, Varadkar said “one thing that will never change”, is that Britain and the United Kingdom is Ireland’s nearest neighbour.

“It’s not unusual for Irish people and English people to have family in each other’s countries. My sister lives in London, my nephew and niece are English. So you know, it’s not a foreign country. And we’ve been very close for a long time, even though we’ve had a lot of rows as well.

“I would like to see a stable, successful United Kingdom that is sure about its face in the world,” he said.

Many leaders in the UK argued against Brexit, as they saw that it would potentially weaken the union with Scotland or Northern Ireland, he said.

“I think that’s something that those who support and continued to believe Brexit was the right decision need to have regard to,” said Varadkar. 

“We’ve arrived at the moment over the [Northern Ireland] Protocol. This is the protocol that means there’s no hard border between North and South. 59 out of the 90 people elected to the Northern Ireland Assembly there a few weeks ago don’t want it revoked. 

“London and Westminster needs to think about the consequences of imposing things on Northern Ireland, Scotland that they don’t want, and I’m not sure they think about that enough,” Varadkar added. 

Speaking about the prospect of a united Ireland one day, Varadkar said it is an ”aspiration that we have”.

It’s an aspiration that’s enshrined in our Constitution. That’s an aspiration that I have as leader of my party,” he said, setting out that it’s also enshrined in the Good Friday Agreement.

“As things stand now, that test has not been met, because despite the very good result that Sinn Fein scored in the elections in Northern Ireland, the number of members of that Assembly who are nationalists who want a United Ireland actually went down. Whereas the numbers on the unionist side went down as well. And there’s been a big growth of the middle grounds, with the Alliance Party, a party made up of Catholics and Protestants who just want to make Northern Ireland work,” he said. 

He added that he wants all sides to “recommit” to the Good Friday Agreement. 

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Varadkar said a United Ireland is “something that we need to think through and work out and try to answer some of those questions. You know, what would it actually look like?”

Questionable 

Speaking to reporters in Dublin today, People Before Profit’s Paul Murphy TD said the decision of both Taoiseach and Tánaiste to travel to Davos was questionable.

“Davos is a gathering place of the elites in the world, the real elites in terms of the very, very wealthy, the bankers and their political representatives. The decisions made in Davos are not decisions made in the interests of ordinary people,” he said.

“If we had a left government in this country we’d be having a very different type of summit involving trade unionists, small farmers and representatives of ordinary people.”

“Certainly I think there’s a question mark over why we have both the Taoiseach and Tánaiste going to Davos.”

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