By Padraic Halpin
DUBLIN (Reuters) -Paschal Donohoe will resign as Irish finance minister and Eurogroup President to take up a World Bank role, he announced on Tuesday, a surprise move that will leave the coalition government without one of its most experienced members.
Donohoe has held one of the two main budget ministries for almost a decade and first became finance chief in 2017. He was only re-appointed to the role in January following an election, having helped guide the public finances to become one of the healthiest in Europe.
He was re-elected as chair of the group of euro zone finance ministers for a third time in July, in a term that was due to last two-and-a-half years. He will formally tender his resignation later on Tuesday, his spokesperson said.
“It’s a really significant development,” Junior Minister for Enterprise, Alan Dillon, a member of Donohoe’s Fine Gael party, told national broadcaster RTE.
“It’s now a matter for the party leaders. Tanaiste (deputy prime minister) Simon Harris has always emphasised stability and continuity in government and I know he will approach this transition with the same focus.”
ESCHEWED CALLS FOR BIGGER TAX CUTS
Fine Gael leader Harris said he will announce “a number of changes” to his party’s ministerial team later on Tuesday. Irish media speculated that Harris could move to the role of finance minister from foreign affairs.
Under the terms of the coalition deal with fellow centre-right partners Fianna Fail, Fine Gael is due to hold the finance brief until late 2027. Only one of Fine Gael’s other members of cabinet has been a senior minister for more than two years.
Dubbed “Prudent Paschal” by some local media, Donohoe has often eschewed demands for spending large budget surpluses on even bigger tax cuts and increases in public spending.
He and Public Expenditure Minister Jack Chambers are due to publish a new medium-term economic plan shortly, having pledged to further moderate spending increases amid warnings that the corporate tax boom funding them could end suddenly.
Donohoe will take up the role of one of the World Bank’s managing directors and chief knowledge officer, Harris said.
(Reporting by Padraic Halpin, writing by Sam Tabahriti; editing by Sarah Young and Ros Russell)
