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Paschal Donohoe: “Our exchanges with London will never return to the pre-Brexit level”

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Today we welcome Paschal Donohoe, Irish Minister for Finance and current President of the Eurogroup, this informal body which was at the heart of the negotiations for the Union’s economic recovery plan. When he was appointed in July 2020, he had to present a compromise and prudently managed the finances of a country which had benefited from an aid plan during the crisis in the euro zone, on the same basis as Greece or Portugal.

Eurogroup

At the head of a Eurogroup sometimes criticized for its lack of transparency and its austerity, Paschal Donohoe reaffirms its “democratic legitimacy” due to the status of its members. He recognizes that their “decisions have consequences, which is why they are taken on the basis of consensus.” He also recalls that those taken after the 2008 financial crisis “prevented the worst possible scenarios from becoming reality”.

In July 2020, the heads of state and government meeting at the summit voted on a historic recovery plan to alleviate the effects of the health crisis on European economies. For the President of the Eurogroup, this plan “clearly shows our ability to remain united within the European Union and it is a true indication of our solidarity”. According to him, thanks to the work of the Eurogroup and to the “colossal” stimulus plan which came out of it, “a stable and positive future is emerging for the eurozone”. He strongly believes in a “start of recovery in 2021 and a return to normal levels of economic activity in 2022”.

While the issue of debt cancellation is gaining ground among some within the Union, Paschal Donohoe recalls that “we must repay a debt that we have contracted because if those who lend us money think that ‘ it will never be reimbursed to them, this increases the risk we are taking by borrowing today “.

Ireland

Ahead of the G7 summit, during which member countries should agree on an international tax system, Ireland is going it alone by keeping its tax rate on the profits of multinationals at 12.5%, against the 15% envisaged . As Irish Minister of Finance, Paschal Donohoe emphasizes the fact that “Ireland is a small economy” and that “its ability to determine its own fiscal policy, its own rates, is a very important element of its competitiveness” , but remains optimistic that the Europeans will find an agreement, which he said will nevertheless “work for all countries, large and small, when they apply it”.

Regarding the sum of 850 million euros that Ireland has for the stimulus plan, significantly lower than those for other Member States, Paschal Donohoe believes that his country “has not experienced such a big economic shock than some of our friends or partners, which is why it is right that our plan is different in kind and in endowment. ” “And that reflects how well our economy is performing,” he adds.

Brexit

Almost six months after Brexit, Paschal Donohoe remains optimistic that a “more stable and positive relationship” can be formed in the future, because “the United Kingdom wants to build a strong relationship with the European Union”. But he does not envision that “trade relations will return to what they were in 2013, 2014 or 2015”, because with Brexit, the United Kingdom has left the Single Market and “can therefore no longer benefit from the fluid trade that one benefits from when one is part of it “.

Program prepared by Perrine Desplats, Mathilde Bénézet, Isabelle Romero, Céline Schmitt and Johan Bodin

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