The next 48 hours will be a “critical period” for the EU and the US to reach an agreement on a trade deal, otherwise the economy will face serious risks, Minister for Public Expenditure Jack Chambers has said.
Mr Chambers said Taoiseach Micheál Martin and EU Commission president Ursula von der Leyen spoke by telephone on Monday morning to assess the ongoing discussions on trade talks and US president Donald Trump’s threat of introducing new tariffs if there is no agreement by Wednesday.
“There’s still significant uncertainty around what will emerge out of those talks and we’ve been engaging with the EU bloc around the sectors that are affected in the Irish economy,” he said.
Mr Chambers said Government was focusing on market diversification, investment in infrastructure, and identifying new opportunities. He said it was happening in the context of deglobalisation.
“We’re very conscious of the serious risks that are represented here if there isn’t an outcome or a framework [agreed],” he said.
Mr Chambers was speaking along with Minister for Enterprise Peter Burke at Government Buildings after the Government’s annual competitiveness summit on Monday. The summit was attended by senior Government figures, including the Taoiseach Mr Martin and the Tánaiste Simon Harris. It was addressed by Prof Frances Ruane, the chair of National Competitiveness and Productivity Council.
Mr Chambers did not rule out the need for additional funding for some high-spending departments this year, including health. However, he said there was a “moderation” in health spending this year compared to 2023 and 2024, a signal of a much smaller over-run.
“We know that the overall rate of current expenditure is at about 6.5 per cent year on year, and that’s a moderation from what happened between 2023 and 2024.”
He said there was still some risk within certain departments about possible overruns. “We can’t continue to make in-year decisions [to increase spending] in future years like we have over the last number of years.
“We need much better discipline across Government on how expenditure is managed within (the) year and also to manage the overall trajectory of public spending over the medium term.
“If we want to really prioritise capital investment in our economy, there are trade-offs and choices for Government, and I believe we need to really invest in our future.”
On the matter of developing the artificial intelligence sector in Ireland, Mr Burke said that would require the State to get its energy policies in place.
“We know that generative AI takes up about 2 per cent of global energy. That’s very significant. We are bringing forward our large energy user policy later this year, which will be key in giving a very definitive pathway for investment by very significant companies who want to really embark upon that journey,” he said.