Donohoe confident on eurozone recovery even if Omicron triggers new health measures    

Irish finance minister and head of the Eurogroup says countries have curbed the economic damage of restrictions

Paschal Donohoe says he's confident of growth — but cautioned that he would need to see if the new variant will impact economic activity.

Paschal Donohoe, the head of the Eurogroup of eurozone finance ministers, is confident the region's recovery can be sustained into next year even if the Omicron coronavirus variant requires new public health measures, he told a Reuters conference.

Mr Donohoe said his confidence was based on how economies have increasingly demonstrated their ability to limit the damage of restrictions put in place to slow the spread of the virus.

The Irish finance minister also said the EU's huge Covid-19 recovery fund would make "a very big injection" into the region  next year to further guard against the risks that are now developing. 

"It is very early days in terms of the health impact of this new variant on all of us. I am confident about our ability to sustain a strong recovery into next year," Mr Donohoe said. 

I hope we can avoid those broad health measures again. I am equally confident that we will be able to allow consumption and investment to take place alongside them were they to happen. 

However, Mr Donohoe cautioned that he would need to see whether the new variant will impact economic activity in any way, and what level of economic support would be needed across December and into the early part of next year.

He nevertheless said Covid-19 transmission had been stabilising in Ireland over the last few days, albeit at a high level.

Meanwhile, the Organisation for Economic Co-operation and Development said that persistent inflation was the main risk to the world economic recovery. It predicts eurozone inflation will stay elevated but fall below the key 2% rate by October next year. 

• Reuters. Additional reporting Irish Examiner