2023 Ireland Country Report and Country Specific Recommendations published

Posted on Monday, 19 June 2023

As part of the Spring Package, the European Commission has published a country report for Ireland and four country specific recommendations for 2023 and 2024. The country report examines some of the main challenges facing Ireland, progress on country specific recommendations to date and progress on meeting the targets set out in the Recovery and Resilience Plan. The country specific recommendations are based on the Commission’s analysis of Ireland’s national reform programme and economic, fiscal and employment challenges.

Country Specific Recommendations 2023

Four country specific recommendations (CSRs) have been issued to Ireland as part of the Spring Package.

Wind down the energy support measures in force by the end of 2023. Should renewed energy price increases necessitate support measures, ensure that these are targeted at protecting vulnerable households and firms, fiscally affordable, and preserve incentives for energy savings. While maintaining a sound fiscal position in 2024, preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. For the period beyond 2024, continue to pursue investment and reforms conducive to higher sustainable growth and preserve a prudent medium-term fiscal position. Ensure the fiscal sustainability of the state pension system by specifying its financing arrangements.
Significantly accelerate the implementation of its recovery and resilience plan, also by ensuring sufficient resources, and swiftly finalise the addendum and the REPowerEU chapter with a view to rapidly starting its implementation. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan.
Accelerate investments to speed up the circular economy. Further develop both waste treatment infrastructure associated with the higher steps of the waste hierarchy and economic instruments to prevent waste and increase reused, remanufactured and recycled content. Develop a more effective system for the separate collection of recyclable waste, including biodegradable waste. Divert waste from landfilling and incineration, with a particular focus on plastic and biowaste. Increase efforts to accelerate investments in the drinking water and wastewater infrastructure.
Reduce overall reliance on fossil fuels. Focus efforts on improving flexibility in the electricity system and improving energy system integration. Design and implement a dedicated strategy for the development of demand-side response and accelerate the roll-out of smart metering infrastructure and smart grid technologies. Streamline the planning and permitting framework for renewables, storage and grid connectors. Implement additional measures that support energy efficiency in private and public buildings to reduce energy bills and energy system costs. Accelerate the installation of public charging points for zero-emission vehicles. Step up policy efforts aimed at the provision and acquisition of the skills needed for the green transition.

While the focus on addressing issues relating to energy costs, energy infrastructure, and investment in the circular economy are very welcome, it is disappointing that there is no reference to addressing poverty and social exclusion, and neither is there any reference to the housing and homelessness crisis. In addition, when making the necessary investments and transitions to meet our climate commitments, policy must ensure that those who are most vulnerable are protected.

Country Report for Ireland 2023

The Country Report for Ireland outlines some of the major challenges facing Ireland, many of which Social Justice Ireland have consistently advocated the Government address. Shortfalls in housing, poor outcomes in the health service, lack of planning for an ageing population, persistent challenges in meeting the needs of vulnerable groups, poor energy infrastructure, lack of progress on climate action are in addition to the challenges which Government aims to address in the Recovery and Resilience Plan.

Among the key challenges identified in the country report are:

Employment and social challenges: disadvantaged groups continue to face significant labour market challenges and disproportionately high poverty risks

Disadvantaged groups continue to face significant labour market challenges and disproportionately high poverty risks. The disability employment gap in Ireland stood at 41.3 percentage points in 2021, among the highest in the EU. The employment rate of single parents was the second lowest in the EU in 2021 despite progress in the past ten years. Ireland has the highest share of low work intensity households in the EU at 13% and these households often overlap with vulnerable groups such as persons with a disability and lone parent households. These disadvantaged groups also have high poverty rates. In 2021, the at-risk-of-poverty or social exclusion rate for people with disabilities and single parents was nearly double and triple that of the general population, respectively. Poverty risks are exacerbated by high inflation and increasing living costs.

Health: health and long-term care systems continue to face long-standing issues

The health and long-term care systems continue to face long-standing issues, despite gradual improvements. The public healthcare system faces significant capacity constraints. Almost half of the population uses private health insurance to bypass long waiting lists in the public system. Ireland also remains the only EU country without universal primary care coverage. With respect to long-term care, the public system focusses on institutional care over home care; the former is relatively costly and limits accessibility. The ageing of the population is expected to put considerable pressure on the sustainability of the health and long-term care systems.

Housing: the initial housing targets set in the ‘housing for all’ plan of 33 000 new homes per year might need to be revised upward substantially

House and rental price growth remained high due to persistent shortfalls in housing supply. In 2022, new housing completions increased by around 40% on the year to almost 30 000. However, this was in part driven by pent-up deliveries due to pandemic delays. Looking ahead, the fall in housing commencements (-12% year-on-year) and planning permissions (-20.5% year-on-year) in the second half of 2022 suggests completions might fall in 2023. In addition, higher-than-expected demographic growth and the need to house people fleeing from Ukraine heightened housing demand, leading to an extremely tight rental market and soaring house prices. This suggests that the initial housing targets set in the ‘housing for all’ plan of 33 000 new homes per year might need to be revised upward substantially. In the short to medium term, the gap between housing supply and demand is thus expected to remain wide. Shortages of social housing have created long waiting lists, have resulted in an over-reliance on short-term rent supplement solutions for 75 000 families, and have contributed to a steep increase in homeless people (22% year-on-year in March 2023). Affordability remains low, especially for poorer cohorts, and is a key challenge for competitiveness, as it hinders the recruitment of skilled foreign labour.

Climate: Ireland is yet to achieve genuine progress in curbing greenhouse gas emissions

In spite of the recent adoption of a strengthened legislative framework for climate action linked to ambitious mitigation targets and the climate action plan 2023, Ireland is yet to achieve genuine progress in curbing greenhouse gas emissions. Achieving national and EU targets will be a major challenge that would require a transformation of many facets of the Irish economy. The climate action plan 2023 highlights the wide-ranging nature of the changes required, and sets objectives and actions across all sectors of the economy. It remains an ambitious plan despite some major weaknesses, mainly linked to unspecified mitigation efforts up to 2030.

Progress on implementing Country Specific Recommendations 2019-2022
The country report also assess progress on the implementation of Ireland’s country specific recommendations for the period 2019-2022. The report finds that ‘some progress’ has been achieved in 52% of the CSRs, ‘substantial progress’ has been achieved in 19%, ‘limited progress’ is observed in 12% while just 12% have seen full implementation.

Chart 1: 2019 Country Specific Recommendations