FES BRIEFING IRELAND Trade Union Monitor April 2021 POLITICAL, ECONOMIC AND SOCIAL FRAMEWORK POLITICAL DEVELOPMENT As in most of Europe, the Irish political context has been somewhat volatile over the past decade. However, the form this has taken is somewhat different to many countries. Ire­land was one of the countries hit hardest by the financial cri­sis post-2008, following a collapse in the banking and con­struction sectors, and required a»bail-out« from the IMF­ECB- European Commission(the ›Troika‹). The general elec­tion of 2011 resulted in huge losses for the incumbent Fianna Fáil party, traditionally the largest political part in the state. The resulting Government, a coalition of Fine Gael(tradition­ally the second largest party) and the Labour Party(the »third« traditional force in Irish politics), was tasked with im­plementing most of the austerity agenda on which the finan­cial support package from the Troika was contingent. This in­volved large cuts to public spending and social security, and significant wage reductions in the public sector. After record­ing real Gross Domestic Product(GDP) growth of more than 5 percent in 2007, in 2009, real GDP in Ireland shrank by the same figure. The unemployment rate rocketed from under 5 percent in January 2007 to more than 15 percent by January 2012. Economic recovery, however, was swift. By the time of the election of 2016, Ireland had exited the EU-IMF pro­gramme, unemployment has declined to under 8 percent, the annual GDP growth rate was over 9 percent, and the public finances were comfortably meeting EU budgetary targets. That election produced no clear majority for any party, or co­alition grouping. The Labour Party was the main loser, seeing a huge drop in support, as voters seemed to blame it for the effects of austerity. Fine Gael formed a minority government. From 2016 until the outbreak of the Covid-19 pandemic, the Irish political context was almost completely dominated by Brexit, as Ireland remains the country most directly affected by the UK vote to leave the EU(politically, economically, and culturally). While the economy continued to improve(unem­ployment dropped below 5 percent in early 2020), the gener­al election of February 2020 produced a new shock as the left-leaning Sinn Féin(a political party with traditional ties to the Irish Republican Army) won a record number of seats, re­sulting in, effectively, a three way-tie between the traditional (centrist/centre right) parties of Fianna Fáil and Fine Gael, and Sinn Féin(the Labour Party secured under 5 percent of the vote). The stalemate resulted in Ireland having a ›caretaker‹ government until June 2020, when traditional rivals Fianna Fáil and Fine Gael formed a new administration, with the sup­port of the Green Party. The Programme for Government of the new administration includes a commitment to the estab­lishment of a new unit in the Department of Taoiseach(Prime Minister) to coordinate social dialogue, and to create new models of sectoral engagement. Thus, Ireland has gone from economic boom(2000–2007) to economic collapse(2008–2015), to economic recovery(2016– 2020), to economic uncertainty(Brexit), to the Covid-19 pan­demic. It is notable that there has been little or no support for any political parties espousing a far-right agenda; notably, it is widely felt that the outcome of the 2020 election, in fact, re­flected an increase in support for the left. ECONOMIC AND SOCIAL SITUATION As noted above, the economic situation in Ireland has been extremely volatile over the past decade. Although the econo­my, and public finances, were in a strong position in early 2020(low unemployment, strong economic growth), many threats were present. Prior to the Covid-19 outbreak, the big­gest fears revolved around the possible impact of a ›no deal‹ Brexit. There was widespread relief when the Withdrawal Agreement between the UK and the EU was reached at the end of 2020, although there have been continued political and economic difficulties with the implementation of the ›Northern Ireland Protocol‹. Reaction to the election of new US President Biden(of Irish descent, a vocal critic of Brexit, and a supporter of trade union rights) has been very positive, as Ireland is a small, open, export-driven economy, which is heavily dependent on foreign direct investment(FDI), particu­1