After months of preparation, Ireland’s stint at the helm of the Presidency of the Council of the European Union officially kicked off on Wednesday, with great fanfare and celebrations taking place at Dublin Castle. With Irish dancers, Irish actors and celebrities attending alongside Ministers and politicians from across the island, it started Ireland’s Presidency with a bang.
President Volodymyr Zelenskyy of Ukraine was the star guest of the event, adding to the excitement of the day. Though the Government publicly reaffirmed its commitment to Ukraine and pledged to support Ukraine in its accession to the EU throughout the Presidency, these comments were overshadowed by criticism from President Zelenskyy himself.
Zelenskyy, quite unexpectedly, appealed to the Irish Government to address the supply of raw materials to Russia. Though he did not explicitly name any company, it was clear to all that the Ukrainian President was referring to Aughinish Alumina. The Government is facing increasing pressure to respond to the growing calls, both at home and abroad, for sanctions to bar the export of alumina from Ireland to Russia.
Clearly, President Zelenskyy did not accept the Government’s reasoning that it is awaiting the completion of a Department of Enterprise inquiry before making any decisions on the matter.
Making these comments while standing beside the Taoiseach on the first day of Ireland’s Presidency marked a change of approach from the Ukrainian President, who has previously been full of praise for Ireland’s response to Russia’s invasion of Ukraine. These comments came shortly after Ukraine had turned down the donation of a fleet of armoured combat vehicles from Ireland, as the fleet in question had been known to break down.
While the Presidency will continue until the end of the year and the Government is likely to face a multitude of international issues during this time, it likely did not expect to receive this level of direct criticism from a previously strong supporter of the administration right off the bat.
With Ursula von der Leyen and the EU’s College of Commissioners meeting with the Taoiseach today in Cork, the Government will be hoping to move on from this rocky start.
Political Update
Government to Gradually Restore Fuel Excise Rates from September
Cabinet has confirmed the plans to begin restoring the temporary reductions in excise duty and the National Oil Reserves Agency (NORA) levy on petrol and diesel from 1 September.
Fuel excise rates will increase in four stages, with petrol rising by 9 cent per litre and diesel by 10 cent per litre from September, followed by further increases on 1 October, 1 November and early December, when the reductions will be fully unwound.
The temporary measures, introduced to help offset rising fuel costs, reduced excise duty by 27 cent per litre on petrol and 32 cent per litre on diesel, including VAT. Tánaiste Simon Harris said the phased approach was intended to avoid a "cliff edge" increase in fuel prices, while providing motorists with certainty ahead of the expiry of the current measures.
He added that the Government intends to fully restore excise duties by the end of the year while continuing to monitor the situation.
Economic Update
Inflation Moderates as ECB Warns of Ongoing Risks
Ireland's annual inflation rate moderated to 3.3% in June, down from 3.5% in May, as easing global tensions and lower energy prices slowed the pace of price growth.
However, European Central Bank Chief Economist Philip Lane warned that higher energy costs could still have delayed "second-round" effects on inflation, particularly through food and other consumer prices. While energy prices fell by 1.9% during June, they remained 10% higher than a year earlier. Excluding energy and unprocessed food, underlying inflation was estimated at 2.6%.
The latest figures come amid continued uncertainty over global energy markets, with Lane stressing that the ECB will remain flexible in its approach to monetary policy.
Sustainability Update
Delaying Climate Action Could Cost Ireland €13bn Annually by 2050
A new report from the Economic and Social Research Institute (ESRI) warns that delaying climate action could cost Ireland up to €13 billion annually by 2050, with the economic impacts of rising temperatures, flooding and other climate-related events expected to outweigh the costs of reducing emissions.
The report argues that earlier investment in decarbonisation and climate resilience would be significantly less costly than responding to the long-term impacts of climate change. It also highlights that while some sectors, particularly agriculture, face substantial transition challenges, delaying action would increase economic risks and place greater pressure on public finances and households.
The findings reinforce calls for accelerated implementation of Ireland's Climate Action Plan to reduce future economic and environmental costs.
Around the World
Germany Calls for €450bn Reduction in Proposed EU Budget
Germany has urged the European Commission to significantly reduce its proposed long-term EU budget, arguing that the current plans are unaffordable given growing fiscal pressures across member states.
According to a government position paper seen by Reuters, Berlin wants the proposed €1.8 trillion Multiannual Financial Framework (2028–2034) reduced by around €450 billion.
Germany has also rejected proposals for new joint EU borrowing and additional EU-wide taxes to finance increased spending. As the bloc's largest net contributor, Germany maintains that the EU should prioritise spending within existing resources rather than substantially expanding the budget.
The intervention highlights growing divisions among member states ahead of negotiations on the EU's next seven-year budget.