ESRI Director Warns Against Using Pandemic Spending as Crisis Standard

Martina Lawless, director of the Economic and Social Research Institute, warned that Ireland should not treat pandemic era spending as the standard response to future economic shocks.

Lawless spoke on Monday at a discussion hosted by the independent evaluation panel on the State's handling of the 2020 crisis. The panel described the pandemic as an extraordinary test of the resilience of the Irish people and the economy.

The Irish government spent close to €18 billion in 2020 to support households and businesses. Lawless noted that the State entered the pandemic in a strong fiscal position, which provided the scope to deploy those funds. Those interventions helped cushion the immediate economic shock and contributed to a relatively rapid recovery in employment as restrictions lifted.

Lawless argued that maintaining financial reserves is more valuable than increasing permanent expenditure, particularly because current surpluses rely heavily on concentrated corporation tax receipts. She stated that building reserves is an investment in the State's ability to respond to unexpected pressures.

The ESRI director cautioned that the exceptional supports provided during the pandemic were appropriate for that specific shock but should not become the benchmark for every future economic difficulty. She emphasized that resilience depends on the underlying capacity of the economy and public services.

Lawless pointed to existing capacity constraints in housing, transport, water, energy infrastructure, and healthcare. She said these constraints carry economic and social costs, reducing the flexibility of an economy to adapt when new pressures arise.

Nat O'Connor, an assistant professor of social policy at University College Dublin and a panel member, acknowledged that long term resilience costs money. He described a short term versus long term problem, noting that politicians must explain why funds are directed toward long term planning rather than immediate political cycle needs. Caroline McMullan, who worked on national risk assessments, said information on general risks should be shared more widely with the public. In the 2026 risk cycle, 404 risks were proposed by government departments, with between 30 and 35 deeply assessed. The Monday session marked the final roundtable of the evaluation panel's work programme, and the independent assessment is due to conclude by the end of the year.