Beware certainties, and expect events. Understanding Irish politics at the end of 2025 requires acknowledging how much it has changed in the past decade and a half, and that it is likely to continue to change. This makes it erratic and volatile. Throw in a level of international turmoil not seen since the hottest days of the cold war and you have a perfect storm of unpredictability.
At such a time, steadiness, caution and perspective in Government is vital. The Coalition lost a champion of all three with the departure of Paschal Donohoe this week. The cemeteries are full of indispensable men, as they say, but that does not mean that the Coalition is not weakened by Donohoe’s exit. It is, and very substantially.
Some economists and commentators have questioned the prudence of Paschal, pointing out that public spending has grown – and continues to grow – at a rate that far outstrips comparable countries, all financed by corporation tax receipts that may prove fleeting.
That’s true, and it is also true that Donohoe was a lucky general, benefiting from the tax bonanza from US tech and pharma companies. But those US companies are not here by accident; they are here because of the accretion of friendly policies implemented over the years by pragmatists of the centre, the tradition of which Donohoe has been the most articulate advocate. They remained here because the post-crash governments administered the tough medicine that fixed the public finances and cleared the path for a remarkable economic recovery. Sometimes you make your own luck.
READ MORE
On an economic level, the suggestion that spending increases of recent years should have been substantially lower is understandable, and it has been made by multifarious practitioners of the dismal science.
Paschal Donohoe’s last interview
But as Donohoe pointed out on the Inside Politics podcast this week, in his last ever interview as an Irish politician, the suggestion that he should have run a surplus of €14 billion or €15 billion every year, at a time of such obvious need for investment in public services and infrastructure, is not a politically practical one. The voters would just not have worn it.
I think the fairest verdict is that Donohoe was as prudent as Irish politics allowed – and certainly more prudent than any of the other possible alternatives. In other words, had he not been minister for finance, the person in Merrion Street, no matter what government they served in, would not have spent less and taxed more. Very likely it would have been very much in the opposite direction.
Donohoe’s departure is an example of how governments, and politics more broadly, are buffeted by unexpected events.
Look back on the last election cycle for a perfect example of the rollercoaster that Irish politics has become. For much of the period 2020-24, Sinn Féin enjoyed a commanding lead in the polls. Most people in politics (not this columnist, though) assumed that a Sinn Féin-led government after the next election was inevitable.
But then that trend altered dramatically. Internal party scandals, difficulties over migration, and a political misstep on the Dublin riots began a bewildering slide in the party’s support which bottomed out at 11-12 per cent in the local and European elections. It recovered in the general election six months later to 19 per cent – a few points lower than it had been back in 2020.
Over in Fianna Fáil, the only question for much of the same period was whether Micheál Martin would survive long enough to swallow his pride and do a deal with Sinn Féin after the next election. Or maybe he would jump ship to Brussels to avoid that humiliation? Either way, Fianna Fáil seemed in irreversible decline – a decline most people expected to continue once Martin left the Taoiseach’s office in late 2022. None of it happened.
Fine Gael was convinced that Leo Varadkar’s return as Taoiseach would presage a period of pre-eminence. Instead, he couldn’t rediscover the fire in his belly and so he dropped a bombshell and left suddenly in April of last year. Simon Harris took over and the polls, impressed by his energy and action, soared for a while; until they didn’t. He limped to the end of the election campaign.
To summarise all that: the fortunes of the three main parties all turned out differently to what was widely expected, and in some cases considered inevitable.
So we should learn from the recent history of these swings and roundabouts, and appreciate the huge level of unpredictability now inherent in Irish politics.
That is not to say that we know nothing about the future. We know that housing will continue to be an acute political pressure on the Government, perhaps its defining challenge (though, remember, most households own their own home); we know that Martin is unlikely to fight the next election for Fianna Fáil (though the would-be regicides are no nearer to a plan for the day after they dump him); we know that Ireland will remain dependant on the tax revenues from US companies (the most important person in Ireland, observed one ex-mandarin to me this week, is the chief taxation officer in Apple).
[ The more US tax money we get, the more dysfunctional the Irish economy becomesOpens in new window ]
But we cannot know what events or crises will confront the Government and politics more broadly. You can, however, be sure of one thing: unforeseen lurches will continue. What matters is how the players deal with those events.
They say the bookies never lose. Well, let me introduce you to Ivan Yates. The bookies’ odds are a reflection of current conventional thinking. Right now, Sinn Féin are the bookies’ favourites to win the next general election. Back in 2023 Mary Lou McDonald was runaway 1/3 favourite to be the next taoiseach. You might as well ask Mystic Meg.
