Taiseach Leo Varadkar says Ireland is looking at proposals on how its neutrality ‘may evolve’

Leo Varadkar said Mr Martin’s proposals look at defence and security policy.

Speaking as he attended an EU leaders’ summit in Brussels, Mr Varadkar said: “He has developed some proposals as to how we could consult with stakeholders and the public in a meaningful way about how our defence and security policy should evolve.”

Mr Varadkar said he does not believe Ireland is becoming increasingly isolated in EU circles due to its lack of participation in Nato. He said: “There are four countries in the European Union that are not members of Nato and don’t intend to join Nato. There’s very good and fair understanding of our position, and our particular sensitivities and culture and politics around that.

“I’ve never for a second felt under pressure from other prime ministers or presidents to change our position on it.”

Mr Varadkar said that while Ireland is military-neutral and not a member of any military alliance, it is not “politically neutral”. He said Ireland was on the side of democracy and freedom in the face of the war in Ukraine.

The Russian invasion of Ukraine 13 months ago has slowed the European economy and stoked fears of EU recession. The war has fuelled inflation through cuts in supplies of previously abundant Russian oil, natural gas and coal and this has further dented consumer and business confidence.

The policy-guiding European Commission predicts EU growth of 0.8pc in 2023 compared with growth of 3.5pc in the previous 12 months.

But EU leaders played down the risk of a banking crisis developing from recent global financial turbulence in the US and Switzerland.

At the close of the two-day summit in Brussels, the EU leaders said European banks are generally sound and can weather a combination of rising interest rates and slowing economic growth. German chancellor Olaf Scholz told reporters that the banking system is stable.

Dutch prime minister Mark Rutte took the same view. “Generally, I think we are in good shape,” Mr Rutte said.

Earlier Public Expenditure Minister Paschal Donohoe, who attended the summit as president of the Eurogroup, warned that inflation is not declining in non-energy sectors of the economy and in some cases is increasing.

Mr Donohoe also said Ireland will have to move away from broad-based energy supports ahead of next winter. “We are seeing some signs at the moment that the composition of inflation is beginning to change. We’re seeing some indications that the price of food, the price of services are also beginning to change,” he said.

“Even though inflation is going down a bit, and it’s mainly going down because the price of energy is showing signs of beginning to decrease, we’re also saying [that] other goods that are part of how we measure inflation, are either not going down with the speed we would want or are beginning to show some signs of increasing.”

Mr Donohoe said there’s still scope for cost-of-living supports targeted at the poorest in the community. But he also hinted it was unlikely that energy supports would continue into the winter.