EU tells Ireland to speed up work on €1bn Covid recovery scheme

The Government has also been advised to end blanket energy supports this year, and pointed to risks on housing targets, climate change, pensions and healthcare

EU Economy Commissioner Paolo Gentiloni said "differences in the pace of implementation of national plans are becoming more evident”. Photo: Reuters

Sarah Collins

The EU has told Ireland to speed up its efforts to draw down almost €1bn in pandemic grants, saying it has failed to prioritise the money.

Ireland has yet to apply for the aid, as reported recently by the Irish Independent, although it was approved for a total of €915m two years ago.

The grants come from the EU’s €750bn Covid recovery and resilience facility (RRF).

“The implementation of Ireland’s recovery and resilience plan is underway, however with significant delays,” the Commission said in its annual country-specific recommendations to Ireland, which are published every spring.

“Limited resources and insufficient prioritisation have led Ireland to fall behind in the implementation process.”

Projects can go ahead in the meantime, with the Government recouping the money later.

However, the money is subject to implementation deadlines and reform commitments.

This week, the Government asked the European Commission to postpone deadlines on two approved projects, including one social and affordable housing scheme, due to “delays in the construction process and other implementation issues”.

“Key deliverables” under the recovery plan for 2023 and 2024 include the retrofitting of Tom Johnson House in Dublin, the electrification of the Glounthaune to Midleton railway line and tighter laws on tax for outgoing interest, royalties, and dividend payments.

“The RRF remains our most powerful tool to support the reforms and investments we need to secure sustained and sustainable growth,” said EU economy commissioner Paolo Gentiloni.

“But differences in the pace of implementation of national plans are becoming more evident. While some countries are on track, others face increasing risks of delays.”

In its annual recommendations yesterday, the European Commission also told the Government to end blanket energy supports this year, making them more targeted in future if faced with new price hikes.

While Ireland got a relatively clean bill of economic health, its annual reports did point to risks for housing and climate targets, pensions and healthcare.

A lack of rental accommodation could affect investment, it warned in a staff report.

“Affordability remains low, especially for poorer cohorts, and is a key challenge for competitiveness, as it hinders the recruitment of skilled foreign labour.”

The report said Ireland has yet to make “genuine progress” in curbing carbon emissions.

And it pointed to below-average employment rates for disabled people, the Traveller community and single parents, which also face “disproportionately high poverty risks”.