ESRI Director: Pandemic Spending Should Not Set Standard for Future Crises

Ordinary households and businesses in Ireland may face different government responses to future economic downturns, according to leading economists who advise against replicating the scale of support provided during the 2020 pandemic. The consensus among experts is that the extraordinary measures taken five years ago were appropriate for that specific shock but should not become the default expectation for every future crisis.

Martina Lawless, director of the Economic and Social Research Institute, quantified the 2020 response, noting that government spending rose by nearly €18 billion. She stated that this substantial injection helped cushion the immediate economic disruption and contributed to a rapid recovery in employment as restrictions eased. Lawless emphasized that Ireland entered the pandemic with a strong fiscal position, which granted the state the necessary scope to act. She argued that maintaining such fiscal space is valuable, even if it appears less politically appealing than spending or tax cuts.

Lawless highlighted a specific vulnerability in Ireland’s current financial structure. While the state is running large surpluses, she warned that these revenues are increasingly concentrated in corporation tax receipts. She described building financial reserves as an investment in the ability to respond to unexpected changes, rather than merely an act of prudence. This point was raised during the final roundtable of the independent Covid-19 evaluation panel, which is scheduled to conclude its work by the end of 2026.

The discussion also turned to the physical and administrative capacity of the state. Lawless noted that Ireland faces tight constraints in housing, transport, water, energy, and healthcare. She argued that an economy where infrastructure is operating at near capacity and public services suffer workforce shortages has less flexibility to adapt when new pressures arise. These underlying constraints carry economic and social costs that affect investment and living standards.

Nat O’Connor, an assistant professor of social policy at University College Dublin and a member of the evaluation panel, addressed the political difficulty of prioritizing long-term resilience. He described a persistent tension between short-term budget needs and long-term planning. O’Connor stated that there is never enough money to satisfy all demands, and politicians face criticism for both spending and saving. He suggested that explaining this trade-off to the public is a major challenge.

Caroline McMullan, who works on national risk assessments, called for greater transparency in how risks are managed. She noted that in the 2026 risk cycle, government departments proposed 404 risks, with between 30 and 35 receiving deep assessment. McMullan argued that the public wants more information and that sharing risk data widely would reduce anxiety rather than increase it. The panel’s final assessment of the state’s handling of the pandemic is expected to be released before the year ends.