The European Council has finalised its 2018 recommendations and opinions to member states’ on their economic, employment and fiscal policies. Ireland has been advised to use windfall gains to reduce the national debt, broaden the tax base and support the SME sector via direct funding and targeted R&D policies.

Ireland has been advised to take the following action in 2018 and 2019:

1. Achieve medium-term budgetary objective in 2019. Use windfall gains to accelerate the reduction of the general government debt ratio. Limit the scope and the number of tax expenditures, and broaden the tax base. Address the expected increase in age-related expenditure by increasing the cost-effectiveness of the healthcare system and by pursuing the envisaged pension reforms.
2. Ensure the timely and effective implementation of the National Development Plan, including in terms of clean energy, transport, housing, water services and affordable quality childcare. Prioritise the upskilling of the adult working-age population, with a focus on digital skills.
3. Foster the productivity growth of Irish firms and of small and medium enterprises in particular, by stimulating research and innovation with targeted policies, more direct forms of funding and more strategic cooperation with foreign multinationals, public research centres and universities. Promote faster and durable reductions in long-term arrears by the use of secondary markets, building on initiatives for vulnerable households and, where necessary, using write-offs of non-recoverable exposures.