The Government has suffered a major blow with the departure of Paschal Donohoe, who resigned from the Cabinet on Tuesday to take up a post with the World Bank. He will quit as a TD this week.
Mr Donohoe will be replaced as Minister for Finance by the Tánaiste and Fine Gael leader Simon Harris.
Sources across Government acknowledged his departure would deprive the Coalition of one its most respected and effective members. Mr Donohoe has spent almost a decade as either minister for finance or minister for public expenditure, or both.
Mr Donohoe, who has delivered 10 budgets, has been a voice for fiscal caution, seeking to restrain the spending demands of fellow Ministers and warning consistently of the dangers of relying on windfall corporation tax revenues.
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However, critics pointed to massive spending growth during his tenure. His budgets have frequently been criticised as too expansionary by the Irish Fiscal Advisory Council, the independent budgetary watchdog.
Mr Donohoe was approached about the role by the World Bank some months ago and underwent an evaluation process. Both the Taoiseach and Tánaiste were informed of events at an early stage. The process was concluded after the budget, though the appointment was not formally ratified by the board of the World Bank in Washington until Monday evening.
Mr Donohoe remained as minister for finance in order to bring the Finance Bill through its committee stage, but he will begin work in Washington next week and is scheduled to fly to the US on Sunday.
At Tuesday’s Cabinet meeting – his last – Mr Donohoe received a standing ovation from his colleagues. Later, he made a statement to reporters in the courtyard of Government Buildings, saying he had always aimed to build a “better and fairer Ireland”.
There are concerns among Ministers and senior officials that his stabilising influence has been removed at a time when Government is embattled on a number of fronts, especially on the delivery of housing.
[ What is Paschal Donohoe’s new €410,000-a-year job at the World Bank?Opens in new window ]
Once the news was announced, the Taoiseach and Tánaiste moved quickly to make the new appointments, avoiding days of speculation and jockeying for promotion.
Mr Harris’s move to the Department of Finance was the most eye-catching, with the Fine Gael leader stepping into the powerful finance role two years before he is due to return to the Taoiseach’s Office under the Coalition deal. Sources say his experience in several Government departments, and his time as taoiseach, is considered evidence of his suitability for the role. More sceptical voices said there was no other obvious candidates and wondered if he would continue Mr Donohoe’s conservative instincts.
There were a series of knock-on moves among Fine Gael Ministers. Helen McEntee moves to the Department of Foreign Affairs and the Department of Defence, the first woman to hold either role.
Her role as Minister for Education goes to Galway TD Hildegarde Naughton, while Ms Naughton will be replaced as Fine Gael’s super-junior minister – sitting at Cabinet, though not formally a member of it – by Emer Higgins, promoted from the ranks of Minister of State. Sligo-Leitrim TD Frank Feighan will take her place as junior minister at the Department of Public Expenditure.
There were warm tributes to Mr Donohoe from members of Fine Gael and Fianna Fáil in the Dáil, while Opposition parties criticised his legacy but wished him well.
Mr Donohoe has also stepped down from his position as president of the Eurogroup, the group of finance ministers from countries which use the common currency. He informed his colleagues in a series of calls on Monday evening and Tuesday morning.
