DUBLIN —
Ireland’s government on Tuesday announced a stimulus package worth more than 4 billion euros to claw its economy out of the “enormous damage” wreaked by the coronavirus pandemic.
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Prime Minister
Micheal Martin unveiled government spending of more than 3.5 billion euros to support the labor market and businesses.
In addition, just under 1 billion euros will come from the European Union’s pandemic recovery fund, he told reporters in Dublin.
“Let’s be clear, there is enormous damage to be undone,” he said.
“Our core objective is to restore, and then go beyond pre-pandemic employment levels.”
Ireland’s effective unemployment rate is higher than 20 percent, with April figures showing 385,000 people remain in receipt of pandemic unemployment benefits.
The economy of the eurozone member, whose low tax rates have attracted a host of US companies, bucked the worldwide downturn by growing last year.
Gross domestic product expanded 3.4 percent in 2020, but the growth was confined to a handful of sectors that have done well in the pandemic, notably in pharmaceutical and IT exports.
Ireland’s hospitality sector remains shut since a pre-Christmas lockdown took effect, while non-essential retail businesses only reopened two weeks ago.
Martin said pandemic-related unemployment and employer subsidy schemes would stay in place to avoid a “cliff edge”.
Eligibility for business support will be broadened, and a tax break for tourism will be extended.
“Today’s announcement represents a stimulus of more than 4 billion-plus euros for the Irish economy designed to get people back to work, businesses open and prospering again,” deputy prime minister Leo Varadkar said in a statement.
However, the Irish economic model faces a potential threat from a US-led push to set a minimum floor for corporate tax rates. Ireland’s headline rate stands at 12.5 percent, well below most other advanced economies.
Finance Minister Paschal Donohoe said last week Ireland has “significant reservations” about the US proposal, which is set to be debated by G7 finance ministers in London on June 4-5, ahead of a leaders’ summit.
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