Donohoe could retain Eurogroup job if McGrath takes Department of Finance

Finance Minister Paschal Donohoe speaking at launch of the Report of the Commission on Taxation and Welfare at Dublin City University. Picture date: Wednesday September 14, 2022.

Paschal Donohoe could still retain the influential position of President of the Eurogroup if he stands aside as finance minister, the Tánaiste has suggested.

Leo Varadkar made the remark amid mounting tensions between the two main coalition parties over the expected changeovers in December.

The role of Taoiseach and Tánaiste will rotate on December 15, and although not part of the published rotation deal, it is understood that Fianna Fáil expected the finance ministry to move between the parties too.

A rift is now emerging between both parties in recent days as Mr Varadkar raised concerns about Ireland losing the chair position of the Eurogroup of eurozone finance ministers, if Public Expenditure Minister Michael McGrath becomes finance minister.

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Mr McGrath dug in this week, stating that he would expect to take up the position on the Eurogroup if he was finance minister.

However, Mr Varadkar has said it could be possible for Paschal Donohoe to retain his position as President of Eurogroup even if he was not Finance Minister.

Mr Varadkar said an assumption was “erroneously” being made that Mr Donohoe has to be the finance minister to retain the position.

Leo Varadkar has said it could be possible for Paschal Donohoe to retain his position as President of Eurogroup even if he was not finance minister. Picture: Dylan Vaughan

His comments came after the Irish Examiner reported that European Central Bank and EU figures have told the Governmetn that removing Paschal Donohoe from his position as Eurogroup president would be “baffling” and “unthinkable”.

Mr Varadkar said it was not possible for Minister McGrath to inherit the position of President of Eurogroup as he said the role is elected by other finance ministers.

Mr Varadkar said he has not been lobbied by anyone in the ECB or EU to keep Minister Donohoe in the position.

He said: “I think an assumption is being made that Minister Donohoe has to be the minister of finance to continue to chair the Eurogroup — that is not necessarily the case.

“So that assumption is being made erroneously.”

Mr Varadkar stressed that there has been no discussion about the issue with coalition leaders and it’s something that will be discussed in November or December.

Asked about the reshuffle and whether he should remain on in the Department of Finance, Mr Donohoe said: “The only job I am focused on is getting the budget ready for two weeks time and my future and the jobs that members of the Government hold are a matter for the party leaders."

Mr Donohoe added that the allocation of Cabinet positions will be dealt with in December.

Taoiseach Micheál Martin has incited that the “cohesion of the Government” is based on the coalition deal agreed in 2020, which would see both the position of Taoiseach and finance minister rotate. He said: 

The fundamental principle underpinning the government was parity of esteem between parties. 

“And that means in terms of the different portfolios, that if one is Taoiseach, the other party would be minister for finance. That was clear and that was understood at the time,” he said.