This weekend Fianna Fáil will mark its 100th birthday at its Ard Fheis in Dublin. Leading figures in the party will no doubt do everything they can to highlight the party’s political and policy achievements over this time, such as the expansion of free education, rural electrification, and helping to deliver peace in Northern Ireland. They will seek to avoid talk of more recent challenges, such as the impact of the global financial crisis, and the housing crisis that followed it.
In truth, onlookers will be more interested in Fianna Fáil’s near future than its distant past. Most commentators expect Taoiseach Micheál Martin not to lead the party into the next general election, and potential successors are coming into view.
Deputy Leader and Public Expenditure Minister Jack Chambers is widely seen as Martin’s protégé but remains somewhat damaged from his experience as director of elections during last year’s botched presidential election campaign. The most likely ‘change’ candidate is Justice Minister Jim O’Callaghan, who this week strayed beyond his brief in calling for the marginal rate of income tax to be cut.
But watch out for Social Protection Minister Dara Calleary. Although he was somewhat damaged by the covid-era ‘Golfgate’ scandal, which saw him removed from Cabinet and stripped of the role of Deputy Leader, he was and remains very popular within the party. He could easily emerge as the consensus candidate in an otherwise divided field.
Whoever emerges as the preferred candidate, Fianna Fáil will do well to avoid the controversy and uncertainty plaguing their UK Government counterparts by ensuring a calm and orderly transition to a new leader.
Political Update
Minister for Public Expenditure Introduces New Spending Curbs
On Tuesday, Minister for Public Expenditure Jack Chambers sought approval from cabinet for the introduction of stricter spending controls around department overruns. During the meeting, Chambers informed Cabinet that government spending is already up by 8.9% this year, well above the 6% annual target.
The introduction of the new controls follows a €600m overrun in the Department of Education, after which the Government decided to impose an efficiency levy of between 0.4% and 1.4% across all other departments. Spending concerns have also been triggered by the Department of Health, with the HSE already €250m over budget in the first quarter of 2026.
Under the proposals, departments that exceed their budgets could face new oversight bodies staffed by officials from Chambers’s department. The Minister could also withhold support for government memos submitted by those departments.
Cabinet has agreed to the levies, despite discontent among ministers, as well as wider government departments.
The Opposition has queried whether the new levy would result in decreased funding for key schemes, with Green Party leader, Roderic O’Gorman asking for clarity on whether the levies could represent cuts in public spending for childcare and housing schemes in 2026. O’Gorman criticised the Government for introducing levies on public spending while simultaneously planning to cut tax for high earners.
Economic Update
AIB Warns Inflation Could Increase to 7% if Strait of Hormuz Blockade Continues
In its latest economic outlook, AIB has warned that inflation could increase to 7% if the Strait of Hormuz blockade continues for the rest of the year.
While the base case forecast lies at 4%, a peak of 6-7% would involve oil prices increasing to $150 a barrel and natural gas prices surging to €100 per kilowatt hour (kwh).
Chief Economist at AIB, David McNamara, has said that Ireland's domestic economy is positioned for growth across certain sectors, including construction. However, ongoing global uncertainty means this expansion will occur at a slower pace than previously expected.
While the report does not expect a repeat of the 9.5% inflation shock triggered by the war in Ukraine in 2022, AIB emphasises that Ireland remains highly vulnerable to price shocks. The outlook also stresses the need for Ireland to accelerate its transition to decarbonisation and reduce its reliance on fossil fuels, alongside providing short-term energy supports.
Sustainability Update
World Weather Attribution Predicts Extreme Weather This Year
The World Weather Attribution group of climate scientists has warned that extreme weather is likely this year, as 2026 is expected to be the second hottest on record.
The group notes that increase in sea surface temperatures and widespread wildfires will be exacerbated by the growing impacts of an El Nino warming event taking shape in the tropical Pacific Ocean.
The increased risk of drought across tropical rainforest regions, including the Amazon, Oceana and parts of Southeast Asia is predicted to increase the risk of widespread or unusually intense fires in typically damp regions where such fires are not usually common.
The report highlights the need for immediate reductions in fossil fuel use and the introduction of more ambitious measures to achieve net-zero emissions.
Around the world
Sweden Targets Sustainable Fuel Supply Gap in Aviation and Maritime Transport
Earlier this month, the Swedish Government received the final report of its inquiry to scale production of Sustainable Aviation Fuel (SAF) and low-carbon maritime fuels. Sweden is expected to rely heavily on advanced biofuels derived from forestry residues and waste products in order to achieve this, marking a significant step in the push to decarbonise fuel production, improve long-term supply resilience and accelerate the transition away from fossil fuels in shipping and aviation.
By Wednesday 13th May, industry organisations had welcomed the recommendations, agreeing that clearer long-term policy signals are necessary if Sweden is to compete in the growing global market for fossil-free transport fuels and green shipping infrastructure.
The report comes as Sweden seeks to regain momentum on climate policy following criticism over recent reductions to biofuel blending requirements. Ministers have increasingly focused on sectors such as aviation and maritime transport, where electrification remains more difficult and alternative fuels are essential to achieving Sweden’s legally binding target of net-zero emissions by 2045.