Taoiseach Leo Varadkar discusses Ireland’s priorities at the United Nations, including its commitment to the UN Sustainable Development Goals, the European response to the war in Ukraine, and updates on issues in Northern Ireland.
O’SULLIVAN: Good morning. It’s wonderful to see standing room only this morning. I’m Meghan O’Sullivan. I’m a board member here at the Council on Foreign Relations and I am the director of the Belfer Center of International Affairs at Harvard University.
It’s a pleasure to be here in New York during U.N. week, which is both the most exciting week and the most inconvenient week of the year. (Laughter.) Under any circumstances, it would be a privilege to introduce our guest today. But, particularly given my own personal background and my professional background, it is a great honor for me today to introduce you all to the Taoiseach, to the Irish prime minister, Leo Varadkar, who will be here with us for the next hour or so.
He’s probably one of the youngest leaders in New York this week, but also probably one of the most experienced. He is in his second term, as the Taoiseach. And during the last dozen years or so he’s held many ministerial posts, including that of health. He’s seen his country through COVID, through Brexit, and now, in Europe, a war. He’s shown extraordinary leadership of a centrist variety, and he’s come to represent a more modern and more diverse Ireland that we’ve come to know. He’s come to New York and bringing with him Ireland’s interest in the U.N. sustainable goals, and also comes at a time when we know there are many challenges and opportunities for Ireland to make its mark on the international stage.
It’s my pleasure to introduce him and bring him up to the stage to make a few opening comments. Then he and I will have a conversation. And then I will open up for questions in this room and over Zoom as well. So please join me in welcoming the Taoiseach. (Applause.)
VARADKAR: Thank you very much, Dr. O’Sullivan, for your very warm welcome. And also thank you to the board and membership of the Council on Foreign Relations for inviting me to speak to you here today. I don’t intend to speak for very long. Look forward to what can be an open exchange. But I thought it might be useful at the outset just to offer a few scene-setting reflections to fuel our discussion.
Since our foundation as a state a hundred years ago, Ireland has been a true believer in the need for effective multilateral action. And that’s never been needed more so than now. In my contribution to the summit on the Sustainable Development Goals on Monday, I regretted the fact that halfway to our target date of 2030 we’re far from where we wish to be. With Kenya, Ireland was instrumental in securing agreement on the goals back in 2015. And that makes it all the more dispiriting to see that, while there has been some progress and that should give us some heart, in some regards we haven’t just stalled but have actually gone backwards.
Yes, there has been a pandemic, a war in Ukraine that has put pressure on global markets for energy and food, and a dramatic increase in the number of extreme weather events fueled by climate change. But these alone are not sufficient to account for the lack of progress. What we urgently need to see is real political leadership, including, if I’m frank, from those of us who can contribute the most in the developed world. So I am disappointed, but I’m not in despair. There is always hope and change for the better is always possible. And I think there is still time to make real headway, even to reach the goals by 2030. And Ireland will continue to do all that we can, both at home and abroad, to make that possible.
The same is also true for climate ambition. I attend COP-28 in November, where many countries will come to that event with recent experience of the consequences of climate change, not least small island developing states. In Europe alone, we have seen intense heatwaves this summer, extreme storms, widespread wildfires, and devastating floods. It’s no longer the case of avoiding the consequences of rising global temperatures. We’re well past that point. It’s rather a case of doing everything we can to adapt and mitigate them. In this, I think we need to do much more to help those least developed and most vulnerable countries. We also need to accelerate efforts to decarbonize our economies, as you’re doing here in the United States and we are doing in the European Union.
The other shadow that was very much hanging over our meetings this week is the war that Russia has unleashed on Ukraine. It is a war of aggression. It’s an imperialist war. We have seen it before in the 1930s. And we know from our history that appeasement doesn’t work. Ireland, as you know, is militarily neutral. We’re not members of NATO. But we’re certainly not, nor have we ever been, politically neutral. From the start, we’ve joined with our partners, including here in the U.S., in condemning what was an egregious breach of the U.N. Charter.
We demanded that Russia should immediately withdraw its troops. And we’ve also insisted that those responsible for war crimes should be held fully accountable. I think it is a shame that these are not positions around which the whole world can rally. So we need to do more to convince these countries, particularly in the Global South, that what Russia has done and is doing should be a matter of profound concern to them too. If Russia succeeds in Ukraine, it will be partially occupying three of its neighbors—Moldova and Georgia being the others. And I don’t think Russia will stop there.
This year, as you know, in Ireland we marked the 25th anniversary of the Good Friday Agreement. That was a transformative moment in the history of Ireland. And I think it might not have been achieved had it not been for bipartisan assistance, interest, and encouragement from the U.S. And we continue to need that help and guidance and engagement in the years ahead. A political standoff in Belfast has left the people of Northern Ireland without their democratically elected institutions since early 2022. And this prolonged absence is detrimental to people’s lives and cannot be allowed to continue indefinitely. So I’ll continue to engage with Northern Ireland’s political leaders and with colleagues in the British government to urge early restoration of those institutions. The continuing engagement of the U.S., including the work of Special Envoy Joe Kennedy to encourage investment and economic development, is also really important.
Finally, before we expand the conversation, I want to reinforce that personally, and indeed for any Taoiseach, every visit to the United States is a special one. Ireland’s relationship with the U.S. continues to be immensely important to us. To our old ties of family and friendship we’ve added a mutually beneficial and increasingly two-way economic partnership. One hundred thousand Americans across fifty states are employed in Irish-owned firms. And Ireland is now one of the top ten inward investors into the U.S. We are of like mind on so many different issues facing the world, and we are true friends and partners. I believe that America is a force for good in the world, and certainly has been a force for good in Ireland. So again, thank you for your international leadership and your continuing friendship and interest in Ireland. Thank you very much. (Applause.)
O’SULLIVAN: Thank you very much for those opening comments, which gave us a good sense of your priorities and what you’re doing here this week at UNGA week. I thought we might begin the conversation just asking a little about you personally, to give people a sense of who you are, and a sense of your leadership, and a little bit of a sense of modern Ireland. You are many firsts. You are the first Taoiseach of immigrant—with an immigrant background. You’re the first openly gay Taoiseach. I don’t know if you’re the first physician to be a Taoiseach. I don’t know. You probably know the answer to that question. I think so. Which is unusual and I would say, just personally, quite refreshing. And so I wondered if you could just reflect a little bit, many years into your leadership, what you characterize your style as, and what you feel your leadership of Ireland says about modern Ireland today?
VARADKAR: Well, I hope the fact that Ireland has a prime minister, has a Taoiseach that is a member of the LGBT community and is a person of color really does send a message to young people in Ireland that it is a country in which you can grow up to be anyone you want to be. If you work hard, if you to study hard, with a little bit of luck—because we always need luck in life—there is no position, no office that you can’t attain in Ireland. And, you know, America is a land of opportunity for so many people. And I kind of hope that my country is that too.
O’SULLIVAN: Fantastic. You mentioned the war in Ukraine. And I was interested in your comments about Ireland’s posture. And I would note for our audience that Ireland has made significant financial contributions to Ukraine, including the announcement of an additional 23 million euros just this week. And that Ireland has accepted, if I have this number right, 90,000 Ukrainian refugees—to a very small country, I’ll point out to our audience. And you have said on numerous occasions, and again to us today, about your commitment to supporting Ukraine and Ukrainians. And could you say a little bit more about how this gels with Ireland’s traditional posture of neutrality? And does this signal a shift in Ireland’s strategic posture? Is something that you’re rethinking, or you think that times will demand you or Ireland to change its current stance?
VARADKAR: Yeah, I suppose neutrality in Ireland has always been defined in different ways and can mean different things to different people. Historically, it arose largely out of our decision to take a neutral position in the Second World War. We were only newly independent at the time. Had only been an independent state for over twenty years. And I think it was really a statement of our independence at the time, that we weren’t going to participate in a war between the countries in Europe, which we’d got dragged into so many times in our history. And then when NATO was founded, we decided not to join NATO. And that was actually linked to the border in Northern Ireland, that we didn’t recognize the border and that was the main reason why we didn’t join NATO. We did actually offer the U.S. a defense pact—a mutual defense pact. You turned it down. (Laughs.) So I do wonder what would have happened had it been accepted.
But it’s evolved since then. It has become more about peace, and our commitment to multilateralism, and our position in the world. But I don’t think we’ve ever been politically neutral. You know, even in the Second World War, we provided support to the Allies that obviously we didn’t provide to the other side. And certainly, when it came to defeating communism, we were always on the side of the West and very much in favor of European enlargement, making sure that we could bring the countries of Central and Eastern Europe into the European democratic mainstream. And then when it comes to Ukraine, people in Ireland see it for what it is, which is a war of aggression, one that is totally unjustified. And we need to be able to support Ukraine in any way we can.
Now, that falls short of military support. In reality, because we have a small military, the contribution that we would be able to make anyway would be quite limited. But we are involved in financial support for them, political support, sheltering refugees, and then also the EU training mission. So, you know, providing them with demining equipment, for example. And then also financial support through the European Union.
O’SULLIVAN: And on the issue of the European Union, I’ve heard you say on other occasions that you support Ukraine’s admission into the European Union. And I wonder if you could say a little bit about—you mentioned you’re not a member of NATO, but of course a member of the EU. What’s your vision for the EU evolving? You’ve overseen a period where Brexit has come into being, was executed, and is still being managed. Where do you see the EU going? And what is Ireland’s role in that in and in the transatlantic relationship overall?
VARADKAR: Yeah, so I think a huge amount has been achieved by the European Union already. You know, the fact that we have a single currency is extraordinary. And it does work. It’s helped to give us, you know, twenty years of relative prosperity and growth across the European Union. And then also the single market, as you know, works extremely well and it’s been very beneficial to Ireland. In terms of challenges ahead, I do think one thing that Europe has done very significantly is to enable countries that join it to have security and also to be on a pathway to prosperity.
So Ireland was very supportive of enlargement into the Baltics, into Poland, into Central and Eastern Europe. And that slowed down. And I think we’ve left countries, for example, like North Macedonia, like Montenegro—we’ve made the wait too long. And I think there’s a risk that if you allow a country to wait too long, that it will turn away from a European path. That’s one of the reasons why we’re very supportive of opening up that pathway to countries like Moldova, to countries like Ukraine.
It might take a long time to join the European Union, but once you’re on a certain path it’s required that you reform your institutions, that you have a functioning democracy, civil society, that you have a market economy. And I think that’s one of the reasons why Europe’s key role in many ways is to secure peace and security in Europe. That is why it was set up in the first place. It was a peace project, not just an economic project. And I think that’s still very relevant today.
O’SULLIVAN: OK. And so, you’re an advocate for an early admission for Ukraine? Or when you said the timeline might be long, of course that’s always the big question. Would you say you’re an advocate for an early admission?
VARADKAR: Well, we’ll have to make a call in December, on the foot of a recommendation from the European Commission as to whether to grant candidates status to Ukraine. So, you know, I really hope we’ll be in a position to do that. If the commission report, I think, is anyway favorable, we should do that. But, you know, no country can join the European Union in the space of a few years. You know, it’s a complicated negotiating process. And it takes time to happen. And it’s very hard to put a timeline on it.
And it also will require changes to the way the European Union works because it was designed, I suppose, for twenty-something members. And you can see us reaching beyond thirty with the next phase of enlargement. And then also it will have profound effects on things like the EU budget, for example, and our agricultural policy, taking the very large country like Ukraine, for example, and some very poor countries. But one thing I would definitely say, and I’ve discussed this with other heads of government, I will be strongly of the view that any country that meets the criteria and is ready should be allowed to join. So it doesn’t have to happen as one big package. And countries that are closer to membership now shouldn’t have to wait for others. And that might mean, you know, one country joining at a time or two countries joining together.
O’SULLIVAN: Great. Now I’m going to get to some of the more thorny questions. First, just a little bit—there’s so much we could talk about in terms of Irish politics, but also the economy. There was a segment that I saw last week, a journalistic segment, about the cost of living crisis in Ireland. And that the cost of living, I think is the—it’s one of the greatest crises that that you have in Ireland right now. And a statistic that I heard is that 68 percent of Irish youth are living with their parents. Which is a reflection of housing and other issues, and I guess encouraging many of them to leave Ireland when they would otherwise want to stay. And I also have heard that your budget—you have a budget surplus coming in. So these two things seem to be fortuitous, or at least a crisis—meeting a crisis with resources is a good thing. Could you tell us a little bit about how you’re working to address some of those challenges inside of Ireland?
VARADKAR: Well, I can confirm, thankfully, that statistic turned out not to be correct. (Laughs.)
O’SULLIVAN: Oh, good. OK. I’m glad I couched that.
VARADKAR: Yeah, it’s not your fault. It’s based on the Eurostat survey. So, thankfully, that’s not true. But it is the case that about one in eight—one in seven, one in eight Irish adults live with their parents. So that can be for lots of different reasons. And if you take people maybe in their late twenties, about one third still live at home. And that’s higher than it would have been in the past and is a reflection of what is a very real housing crisis in Ireland. But certainly, if you talk to people in Ireland—if I’m knocking on doors talking to my constituents, the top two issues that will come up is inflation and the cost of living, which we are bringing under control. Inflation is just over 5 percent now, I think will fall to probably 3 or 4 percent next year.
And then the housing shortage. And there is a very serious housing shortage in Ireland. And that really stems from the financial crisis twelve years ago. We had a banking crisis, as you know. Lead to fiscal crisis. And then our construction industry really fell apart. So there was a six or seven year period when the government couldn’t build houses, the banks couldn’t finance the building of houses, and the construction industry had really shrank by about two thirds. So during this six or seven year period when maybe a quarter of a million homes should have been built, very few were.
Now we are ramping that up again. This year we’ll build about thirty thousand new homes in Ireland. That’ll be the highest in maybe fifteen years. And we are seeing an acceleration in the number of people who are—who are buying their first homes, about four (hundred) or five hundred a week now, which is great to see. The highest that you would have seen since that Celtic Tiger period. And also, the government is investing a lot in social housing. So we’re building more social housing now than at any time since the ’70s. But we’re doing that against the backdrop of a very huge deficit. And that’s going to take some time to bring down.
O’SULLIVAN: So moving along on the thorny issues, I’d like to move to Northern Ireland. And, of course, we’ve seen just in the last couple of weeks one of the more thorny issues around Northern Ireland coming to the forefront, with the passage of the bill in the U.K. dealing with legacy issues. And I was wondering if you could say a little bit about, for this audience, you know, what this bill does from your perspective, what your government’s position is on this bill, and if there is some plan to try to react to this piece of legislation and the consequences that it will have.
VARADKAR: Yeah, so, essentially, it’s legislation that has just gone through the British Parliament and provides a system of amnesty for former British servicemen, former IRA and loyalists terrorists who may have committed crimes in Northern Ireland. And essentially, if they give information to a body that’s being set up, they can get immunity from prosecution and an amnesty. And we think that’s very much the wrong approach. The voices that we hear the loudest and listen to the most are, of course, people who are survivors of those events and victims’ family members. And they’re resolutely, across the divide in Northern Ireland, opposed to it. As are all five of the major of the parties in Northern Ireland. So it’s unusual for all five parties in Northern Ireland to agree on something—(laughter)—but this is something they agree on.
But the British government, for their own reasons, has pushed ahead and pushed ahead of it anyway. You know, probably under a lot of pressure from veterans’ groups, and so on. But we think it’s very much the wrong approach. What we’ll have to do in the next couple of weeks is really decide what our response is. I know that some victims will be taking a case to the European Court of Human Rights in Strasbourg. We have the option of supporting such a case or taking our own intrastate case to the U.N.—to the to the European Court of Human Rights in Strasbourg. And we haven’t decided on that yet. It’s a legal question. It’s also a political question. And something that the foreign minister and I will have to sit down and talk about it over the next few weeks when we have legal advice from our attorney general. But certainly, it’s a move very much in the wrong direction there.
O’SULLIVAN: Now, coming to the Good Friday Agreement, you mentioned that this is the twenty-fifth anniversary of this agreement. I’ve heard you say on other occasions that you’re grateful that much of your adult life has been under the, you know, in peace on the island, which is obviously much welcome. But also that the promise of the Good Friday Agreement hasn’t been fully realized. We, of course, have noted that the devolved government in Northern Ireland has been stalled for some time now. And I think this—again, the statistics, you can correct me if I’m wrong, but about 40 percent of the time of the last twenty-five years, the devolved government has been in abeyance, has not been up and running. And you said you thought it wasn’t sustainable, in your comments to us earlier today. You’ve also spoken about a plan B, alternative arrangements, used language like that which has drawn some attention but we’re not quite sure what you might have in mind. So I wondered if you might use this as an opportunity to tell us what you think a plan B would look like? What are alternative arrangements? How might they be feasible?
VARADKAR: Nice try. (Laughter.) I’m not going to—
O’SULLIVAN: You’re amongst friends!
VARADKAR: I’m not going to do that this morning. I can see my team breathing a sigh of relief there. (Laughter.) I think when it comes to the Good Friday Agreement, you know, we should never forget that fundamentally what it’s given us in Ireland is peace. And that’s been transformative, both north and south. The ceasefire happened when I was in high school, but, you know, I still remember as a child turning on the radio, turning on the TV. Every day it was about somebody being killed in Northern Ireland. You know, crossing the border, you know, seeing a very hard security presence, you know, watchtowers. You know, all of that is gone. And that’s the real—the real thing that the Good Friday Agreement has done, is to allow so many people just to grow up and have normal lives in Ireland. And, I think, unlocked a pathway to prosperity for the republic as well, in particular.
But what it hasn’t done is brought about reconciliation. It’s been a cold peace. And Northern Ireland is still a very divided society. And I think that’s been the real lost opportunity. And, as you say, the institutions at the heart of it. The Northern Ireland Assembly and the power-sharing executive are not functioning almost as often as they are functioning. And that’s a real shame. At the moment, there are talks underway between the DUP, the main Unionist party, and the British government as to what can be done to get the institutions up and running again. They’ve essentially vetoed the reestablishment, even though the other parties want those institutions up and running again.
And, you know, we’re being very patient. (Inaudible)—uses the term strategic patience, which I think is a very good term. And we have to allow with the U.K. government and the DUP to try and get to the point where they can reenter those institutions. But I don’t think that can go on forever. And there does come a point where I think the Irish government and the British government have to talk about what we will do if institutions can’t be reestablished. But that’s very much a conversation that I think the two governments have to have first, rather than being had in public.
O’SULLIVAN: In private, rather than here.
VARADKAR: And also, one thing I would reflect on. Northern Ireland works best when the British and Irish governments, when Dublin and London have a common strategy and work hand in hand. And you saw that very much in the kind of Bertie Ahern-Tony Blair era, and even subsequent to that. That hasn’t been the case for quite some time. You know, certainly Brexit disrupted relations. And we haven’t had—even though relations with U.K. are very good, by the way, and much better than they would have been a few years ago, we don’t have that level of partnership or that common strategy in the way that was the case in the past. And that’s very missing.
O’SULLIVAN: And way that’s envisioned in the Good Friday Belfast Agreement, with one of the strands being the conversation between the two governments. So, my last question and then I’ll open it up for questions and comments from our audience—or, our members, rather, has to do with a united Ireland. You said very recently that you thought you would see a united Ireland in your lifetime. And then made some additional comments about a democracy is judged on how it treats its minority, and there will be—or, would be a million Unionists, potentially, in a united Ireland. And that you would have to think about what that means for Ireland.
There’s been a lot of changes in demographics on the island over the last several decades, but there still seems to be a majority that prefers to stay in the union in Northern Ireland rather than otherwise. So I was wondering if you could give us a sense of, A, what’s the basis of your confidence that you will see a united Ireland. But, B, sort of even more interestingly, what’s the way to have a conversation with all potentially interested parties about what might need to be in place if there is a referendum in which a united Ireland is approved, so that it doesn’t become a Brexit-like scenario, where people aren’t prepared for big political change that ends up being highly disruptive?
VARADKAR: Yeah. And, as you know, there are there are people in Ireland and in Northern Ireland that are pushing for a border poll—for an early border poll, for a date for it. I think that’s a bad idea. As you say, opinion polls indicate that the majority of people in Northern Ireland still want to be part of the U.K. If you look at any election, the number of people who vote for nationalist candidates who want a united Ireland, it’s in around 40. You know, it’s well short of where you’d want to be before you have a referendum. And my biggest fear with the referendum is that it would both be divisive and defeated. And I know what happens when referendums are defeated. It can potentially put the issue off the agenda for a prolonged period of time.
I remember the referendum in Quebec on sovereignty. I remember the referendum in Australia on becoming a republic. But twenty-something years later, neither of those things seem any closer than they were then. So it would be important to get the question right, and to be able to answer any of the difficult questions. And we’re very far from that at the moment. One thing we have done as a government is set up a shared island unit, which operates from my department, the department of the Taoiseach, that is providing funding for a lot of cross-border cooperation. We’re also doing a lot of research on, you know, things about, like, how the health systems work differently, how education works differently. A lot of that work that hasn’t been done in the past is being done now.
O’SULLIVAN: Excellent. Well, thank you for allowing me to pose those questions to you. Let me turn to the room and see if we can get more questions here.
The woman in the blue blazer, please.
Q: Thank you, Taoiseach, for your comments.
I was at the EBRD when many of the countries of Eastern Europe joined the EU. And it was a difficult process, but one which was welcoming, in which they signed up for the principles of the EU. We’re at a period now where we’re beginning to see some of those early joiners moving into, I think “populist” is the polite term, political perspective. And wondering how this is affecting the EU.
VARADKAR: Well, I suppose that that there—there is a growth of populism across the democratic world. And, you know, even in countries like Italy, for example, has experienced it. So it’s not—it’s not unique to countries of Central and Eastern Europe. But it is a difficulty. You know, particularly Hungary, Poland are not as close to the European mainstream as we would have hoped. And I know at the time, for example, when Hungary, for example, join the European Union, there would have been expectation that they would have been early movers into the eurozone, for example, in the way that Croatia and Slovakia are now. But there isn’t an interest in doing that. And there will be quite important elections coming up in Poland, as you know, where Prime Minister—former Prime Minister Donald Tusk is seeking a return to office. Unclear as to how that election will turn out. But I think—I think the rise of populism and the rise of nationalism does pose real difficulties for the European Union. But, again, not something unique to the newer members. It’s happening in Western Europe as well.
O’SULLIVAN: Yes, the gentleman directly in front.
Q: Jeff Laurenti. Taoiseach, you had spoken in your opening remarks about holding the perpetrators of war crimes in the Ukraine war accountable. Even that most famous son of the Irish diaspora, Joe Biden, yesterday did not include that as part of the objectives for the international community. How do you see that actually being realized—International Criminal Court, some other kind of international mechanism? And to what extent has Ireland, with its unique increment of greater credibility with the decolonized world at the U.N. and elsewhere, been active in trying to bring along reluctant other governments into, at least through U.N. mechanisms of condemnation and sanctioning, to register a firm position rather than a kind of fluid or neutral or blind one?
VARADKAR: I think we have to believe that accountability is possible, even if it takes decades for it to happen. And I had a chance to visit Kyiv back in July. Met with President Zelensky. You’ll be familiar with his peace formula. And part of that is accountability. Accountability for some of the actions that are taking place. One of the most egregious, I think, is the removal of children from Ukraine to Russia. You know, that is just shocking that something like that is still happening in our time and is happening on the European continent.
One of the things that is really important is gathering the evidence, because if there is going to be prosecutions in the future—whether it’s a special tribunal, whether it’s the International Criminal Court—having evidence is really crucial. And I had a chance to visit Bucha, just outside Kyiv, where the European Union and others are helping Ukraine to do exactly that, to gather the evidence so that there is the possibility of accountability into the future. And I do think it’s something that you would hope might push other regimes and other dictators off, engaging in violence against their neighbors, if they believe that ten, twenty, thirty years down the line they may actually be held to account.
To answer your second question, I’ve had a good opportunity both here in the U.N. and then its EU meetings with Latin American leaders, with Caribbean leaders, to talk about Ukraine. And most of them are very supportive of Ukraine. Others are more equivocal. And one thing they would often point out is what they would see as the hypocrisy of Western countries, that were much more interested in the war in Ukraine and don’t pay enough attention to other wars that happen around the world. And I can understand where they’re coming from in that regard. Or they would be critical of what the U.S. did in Iraq, for example, or the U.K. did in Iraq, what France does in Africa. You know, they would say that Europeans are—Europeans and Americans—are applying a double standard.
And I suppose the message that I can convey to them, and I think with some degree of credibility, is that Ireland has never had colonies, that we fought for our independence too. And the Ukrainian people shouldn’t pay the price. You may disagree with what France is doing, or Britain is doing, what America has done in the past. But that shouldn’t be blamed on the Ukrainians. Their struggle is actually very similar to the struggle that many countries in the Global South have experienced—people denying the existence of their national identity, and people trying to trying to occupy part of their country or take away their freedom. And I think that is heard. I’m not going to claim that I’ve convinced a huge number of countries to change their mind on this, but I do think that does resonate.
O’SULLIVAN: Thank you. The gentleman in the blue blazer. Working my way to the back.
Q: Thank you.
More than 100 percent, I believe, or close to 100 percent of this fiscal surplus in Ireland comes from tax structuring of large U.S. companies, big tech companies, big pharma companies. How do you think, on a short-term basis in terms of spending the surplus with upcoming elections, balancing long term strategic considerations for Ireland? And then how do you do long-term planning around the unpredictability of this surplus, if the tax code changes from a U.S. standpoint, from a global standpoint, and whether that might at all impact the trajectory of Ireland-U.S. relations?
VARADKAR: Yes, so, as you know, we’ve signed up to the OECD agreement on global taxation. So we’ll increase our corporate profit tax rate in January to go up to 15 percent, which is the global minimum. And we’ve consistently closed loopholes that would have existed in the past. You know, you would have heard of stateless corporations, the double Irish. All those things are gone. So we’re very keen to make sure that we’re within the mainstream, within the global rules when it comes to corporate taxation. But it is a huge revenue source for us. Brings in about 20 billion euros a year when our budget is 100 billion euros. And that is the driver behind our significant budget surplus.
So we anticipate a budget surplus this year of around 10 billion, which is just under 3 percent of GDP. And we’re not going to spend it. Tempting as it may be, we’re not going to do that. So what the Department of Foreign Affairs finance estimates—and it is an estimate, nobody knows for sure—is that roughly half the revenues that are coming in, in terms of corporate profit taxes, can’t be relied on. That they could be transitory, and that we shouldn’t—we shouldn’t spend them. So we’re going to do three things. One is to use some of it to pay down our debt. And we have a quite a high debt per capita. Not relative to our GDP, but we’ve got a high debt per capita. So we’ll pay some of that down.
We’ll put some of it into pension funds to meet future pension liabilities. We’re a country that is blessed demographically in that we’re still relatively young, but that’s changing quickly. So we need to plan ahead for pension costs into the future. And then also, we’re setting aside some money for a future infrastructure fund, because one of the difficulties that we’ve run into in the past—and I was a member of a government that had to introduce austerity policies—is that when we run into economic problems, the thing that tends to get cut first is public investment.
It’s very hard to cut welfare, very hard to cut, pay very hard to increase taxes. So the thing that always gets cut first is the budget for social housing, the budget for transport, the budgets for new schools, the budget for new hospitals, because the view is taken they can wait. But there’s real consequences to not investing in your public infrastructure. And you know that America is which as we know it in Ireland. And we’re going to set aside some of it for future infrastructure needs so that if we end up in a recession or a downturn, we won’t have to cut the public infrastructure budget at that time.
Now, there will be huge temptation—I don’t know who—don’t know when that will happen, or who will be in government at the time. Hopefully won’t arise for a very long time. There’ll be huge temptation, of course, by the government at the time, to raid that to avoid making other hard decisions. So we’ll have to make sure that we write that very strongly into legislation. But there is a positive to all this. And if you do think about it, even if our corporation profit tax receipts lapse by half, we’d still have a balanced budget. And I think that’s something worth reflecting on, because I often think people rightly point out that the presence of big corporations and multinationals is really important to the Irish economy. And it is. But our economy is much more diversified than it used to be. And there’s a huge number of Irish exporters as well. You know, very strong small business sector, a very strong public sector as well. So we are building that resilience.
O’SULLIVAN: I love the idea of Ireland having a sovereign wealth fund. (Laughter.) Which is a little bit what it sounds like you’re describing. Yes, the gentleman in the red shirt.
Q: Hi, I’m Zachary Karabell.
So continuing on Meghan’s attempt to get you to answer a question that you don’t want to answer, I do want to ask about—so you talked about the criteria for new countries entering the EU as being quite stringent, multiyear process, democratic reform, all of it. How does one then handle the backsliding of democracy within the EU? You certainly of Hungary, certainly, you know, arguably Poland and Romania. And while I don’t expect you to take an explicit stance or whether you think Hungary should or should not be a part of the European Union, the question of current embedded members within the EU not actually living up to the very standards that you’re demanding that incoming states do does create a significant problem and tension. So how does one deal with that?
VARADKAR: I definitely think Hungary should be part of the European Union. It’s very much a European country. But the question you ask, which is a very valid one, you know, in relation to the backsliding, we don’t really have adequate mechanisms within the European Union to deal with that. While we tend to use at the moment is financial sanctions—you know, withholding EU payments and EU funds from countries that aren’t meeting their obligations—that’s really the only power that we have at the moment. And again, actually, it will be something we’ll have to discuss as part of the next phase of enlargement as to what mechanisms could be developed, but I’m not even sure myself what they are.
O’SULLIVAN: I think we have a question from our online membership.
OPERATOR: We will take our next question from Bryce Barros.
Q: Thank you so much, Prime Minister Varadkar. It’s a privilege to hear from you.
I want to ask you about Ireland’s strategic calculus since the full-scale invasion of Ukraine. I know that you’ve led several debates in parliament related to discussions about whether or not Ireland should boost its defense capabilities or join NATO, and I know that Ireland will not join NATO. But can you talk about how that’s shifted related to traditional Irish neutrality? Thanks.
VARADKAR: I think it’s definitely sharpened the debate in Ireland about our own security. Another thing that has sharpened that debate, as well, is the fact that war is different now. We had a very major cyberattack in our health service that happened a couple of years ago now, and that also has kind of sharpened our focus. So what we decided to do, among other things, is to increase our own defense spending. And we are programmed to do that—to expand our defense forces and increase our defense spending—and then also to increase cooperation with other countries. So while we’re not going to join NATO, we are part of the Partnership for Peace and we’re going to be updating that agreement that we have with NATO.
And you know, there are things that we’d be particularly interested in cooperating on. On more cybersecurity is certainly one. Another, for example, is the protection of cables and infrastructure around the island that are crucial for our connectivity. And then, also, we are founder members of PESCO, which is the European Union’s structured cooperation on defense and security policy.
So I think it has changed things in that regard. There’s maybe a little bit less complacency about our safety and our security, a greater understanding that we do need to spend more, and that no matter how much we spend a small country of 5 million people has to cooperate with our friends and allies in order to assure our security.
O’SULLIVAN: And question over here.
Q: Greetings, Taoiseach. My name’s Martin Flaherty. I’m at Princeton, Fordham, and Columbia Law Schools.
And I wanted to follow up on another thorny issue that Meghan raised, which is specifically the possibility of Ireland bringing the action at the European Court of Human Rights. I understand the necessity of the attorney general’s office giving you legal advice, but I’m aware of no lawyer or institution outside of the U.K. government that thinks that this bill, and even the ultimately passed law, is anywhere close to being compliant with Article 2 of the European Convention, and indeed would as such violate the Belfast Good Friday Agreement. And that includes the U.N. High Commissioner, it includes the Council of Europe, it includes the Labour Party in Britain, it includes local groups in Northern Ireland like CAJ. So given that, and given that from the point of view of the victims if they are left to bring an action on their own it will take probably at least a decade to get to Strasbourg with all the pain that that would entail, whereas if Ireland did it you could go to Strasbourg immediately, so it seems overdetermined. Would there be any reasons for Ireland not to take an action in Strasbourg? And the footnote is I ask this as someone who’s worked on Pat Finucane case since 1992.
VARADKAR: Well, there’s obviously a political consideration here. We’ve done a lot of work in the last couple of years to improve relations between Britain and Ireland, worked very hard on the Windsor Framework. You know, when Britain wasn’t in the position to honor the protocol, we decided to work with them. We worked with the European Union to negotiate revised arrangements, which is the Westminster Framework, and relations as much better than they would have been a few years ago. And it’s not—it’s not a small thing to take your neighbor to court, whether it’s the neighbor you live next door to or whether it’s a neighboring country. And we had hoped, at least up until this point, to persuade the U.K. government not to go ahead with the legislation and to pause it. I think we’re now beyond that point, unfortunately.
So a decision we have to make, really, is the one you frame, whether we support the case of a victim or victims’ group or whether we take an interstate case. But even an interstate case could take several years, and I am aware of that, too. So we’ll have to make that decision. And it might be the case. It might also be the case that a case from a victim or victims’ group could be stronger than the interstate case, but that’s the kind of thing that our attorney general is looking at at the moment. I mean, we’ll have to make a decision in two weeks.
O’SULLIVAN: Thank you.
Yes? Please, just—yeah. Thank you.
Q: Lucy Komisar. I’m a journalist. I focus on corporate and financial corruption, but I’m not asking you about that. And I’m really pleased to hear about the change in the tax, that it will be 50 percent, so that American—
VARADKAR: Fifteen (percent). Fifteen (percent).
O’SULLIVAN: Fifteen (percent).
Q: Fifteen (percent). Oh, sorry. Shouldn’t be 50 (percent). Fifteen (percent). (Laughter.)
No, but I—
Q: So there’s still, then, a real problem because—so, my mistake. Eh, the mistake of the OECD also.
What happens now is that American corporations transfer intellectual property to Ireland so they can then rent it back, pay a lot of money to get it back, cut that amount of money off their U.S. taxes. So Ireland, even with the 15 percent, becomes a tax haven helping U.S. corporations cheat the American people. Do you think that that’s a reputation that you want to continue to have?
VARADKAR: I hope that’s not the reputation we have. (Laughter.) And you know, the operations that the U.S. companies have in Ireland, they’re real operations—you know, huge numbers of people employed, a lot of real work being done.
A lot of those issues, I think, are probably more about the U.S.’s own tax laws than ours. And it really is up to the U.S., I think, to amend those laws if it wants to. What we’ll do is be very much within the global framework as set out by the OECD, and we’ll apply that minimum rate.
I think we have time for one last question. Sir.
Q: Thank you, Taoiseach.
Given the history of the implementation of the Good Friday accord, are there any mechanisms in the Irish government, the U.K. government, or authorities in Northern Ireland to share your experiences to other countries in the world that are facing ethnic and religious conflict?
VARADKAR: Oh, there are. And it’s—you know, it’s something that we do—we do as part of our foreign relations around the world, is try and share that experience as to how the Good Friday Agreement came about and how it can work. And you know, we’re often asked and called upon to do that, and it’s something that we do.
And something we’d always recognize as part of that is the contribution that the U.S. made. We often talk about the U.K. government and the Irish government being co-guarantors of the Good Friday Agreement. I think in a way the U.S. is actually almost a third co-guarantor, and that’s why it remains really important for us that the U.S. continues to take an interest in Irish affairs. And we’re very fortunate with President Biden to have somebody who has a real affinity for Ireland, and just met him—met him at an event last night and was very keen to know how things were going. And just that interest, just that engagement, is a real asset for us and something we don’t take for granted.
O’SULLIVAN: Thank you.
I actually realized we still, I think, have a couple of minutes, and maybe there’s another question from our membership over—online.
OPERATOR: We will take the next question from Henry Farrell.
Q: Henry Farrell, Johns Hopkins University.
Taoiseach, I was very gratified to hear your discussion at the beginning about Ireland leading the way on climate change. And one of the things I wonder is that, as you know, there’s a lot of worry in rural Ireland in particular about the costs that are going to have to be paid. And you lead a party which is, of course, very, very connected to rural Ireland. And so I’m wondering, what can you do to bring the farmers and the people in rural Ireland and other places like that around the world along on what is going to be a difficult and costly and perhaps politically complex transition?
VARADKAR: Yeah, a very good question and a big dilemma for us at the moment because everyone, I think, appreciates the need for climate action, but people find some of the measures difficult to accept. And that’s not just the case in rural areas; it’s the case in urban areas, too. We really have to try to persuade people and bring people with us as much as we can. The costs of not taking climate action are going to be very much greater.
I don’t know what agriculture will look like in Ireland if soil is dry and if we have water shortages. You know, we have to think about that because particularly in Ireland we very much have a family farm model. And I come from a farm family, too, and farms and passed down the generations. And I do think farmers are concerned about what the climate’s going to look like for their grandchildren, and that’s why climate action is in all of our interests.
But also, I think we need to try to persuade people that there’s an enormous economic opportunity as well. And one thing that I assess as an ambition for Ireland is that we should try to become energy independent within a generation. We are almost entirely reliant on imported gas/oil/coal to provide energy in Ireland. That can all change. And if we embrace the renewable energy revolution, we can turn that around. We’re already up to the point where 40 percent of our electricity is produced by renewables, mainly wind but also solar, believe it or not. It does work in Ireland. (Laughter.) So that’s getting better all the time. And we’ve set the target of getting to 80 percent in 2030. But that’s actually 80 percent of a lot more electricity because, as we electrify our cars, our transport, our industry, we’re going to need a lot of electricity. So we’re investing in interconnection as well, building an interconnector with France in addition to the interconnector with the U.K., and I think some real possibilities around hydrogen and using our massive potential renewable offshore sources to be stored either in the form of hydrogen or future batteries. And that’s actually a big opportunity for Ireland and a big opportunity for rural areas. And then, also, there’s the whole possibilities around biogas and energy crops.
So climate’s often talked about—I think a lot of people talk about climate almost in kind of religious terms, that there are sacrifices to be made, and there, you know, are sins to be atoned, and pain that we must endure so that we don’t face the apocalypse and the final judgment. I don’t think that’s the right approach and I don’t believe that’s the case.
One thing Mary Robinson said which always struck me—and she said it at an event I was at—that we’re—at the same time in this moment we’re on the cusp of destroying our world through environmental damage, and at the same time we’re on the cusp of inventing and deploying all of the technologies that can prevent that. And we have to get ahead of it. I think that’s actually a real opportunity.
O’SULLIVAN: Fantastic. It’s a wonderful note to end upon, although I liked your previous note about our—the importance of the U.S.-Ireland relationship, which remains strong, reputation and all.
It’s been a real pleasure to host you here today. We’ve really enjoyed getting to know you better and getting to hear your views on many of these issues which remain the top of our interests. So thank you. We wish you a wonderful time here in New York and in the United States, and look forward to seeing you again. (Applause.)
VARADKAR: Well, thank you. It’s been a real privilege. (Applause.)