THE FACT OF THE MATTER
BY PAUL HOPKINS
Economy notwithstanding, Ireland is emerging from what has been a lost decade for many – in housing and health and emigration – and we are, hopefully, emerging with a new Government with a greater sense of what needs to be done. That said, Ireland’s growth rate is to plummet in the next 15 years, according to long-term growth prospects calculated by the Central Bank and published in the Business Post.
It’s important we are engaged in shaping and influencing the debate about the future of Europe – particularly in the time of Donal Trump and his threats of tariffs. Ireland’s over-reliance on US corporate taxes could spell trouble, if we don’t have plans to shield the economy from potential US-EU trade wars.
There’s also the problem for farmers and Irish beef and the new South America conglomerate given the green light to export beef into Europe. And there’s still the housing and health and successive governments’ failures to resolve the issues, once and for all. Political asylum seekers need to be addressed too.
Once Donald Trump is inaugurated he will have the authority to get stuck in. Top of the list are America’s fraught relations with Russia and China. On the former, the question will be what relationship to play for with Vladimir Putin. It is anticipated Trump will push a land-for-peace deal with Ukraine, but let’s see if he tries – like many US presidents in their first year – to reset the relationship with Russia, either by pressing for strategic stability talks or, more consequentially, for a plan for Europe’s security that integrates Russia. While arms-control talks would be welcomed, expect resistance if Trump attempts a more ambitious resetting of the relationship.
China may be the less urgent relationship but, for America, the global economy and international stability, it is the more important one. Will Trump follow through on his threat of extra tariffs on Chinese imports and lean in to the defence of Taiwan, or will he attempt a deal that sees China leverage its partnership with Russia to secure a deal in Ukraine, in return for a reduced US commitment to Taiwan?
In 2025, action on global AI governance will come into sharper focus. In February, governments, tech companies, scientists and experts will meet in Paris to discuss how to build ‘public-interest’ AI at the AI Action Summit. Canada’s G7 presidency is expected to focus on a shared approach to emerging technology, which could see G7 and OECD efforts to advance safe, secure and trustworthy AI development.
New rules on general purpose AI from the EU’s flagship ‘AI Act’ will come into effect in August. This regulation, the first of its kind, could also help advance a globally influential ‘code of practice’ for AI companies to abide by.
The German Bundestag elections on February 23 will shape European politics in 2025. Brought forward from September after the coalition government’s collapse, the elections should bring renewed life to German political leadership. Germany’s economy – the EU’s largest – contracted for the second consecutive year in 2024, and the traditional backbone of its economy, the car industry, is struggling. The new government will have to confront these issues.
Beyond Germany, the new European Commission is expected early in the new year to publish a white paper on defence, towards a more co-ordinated and integrated approach to European security. NATO is keeping a wary eye on the EU’s efforts, but they need to work together to build a stronger defence industrial base, particularly given the re-election of Donald Trump and his wavering commitment to transatlantic security.
The negotiation of the ‘Pandemic Agreement’ – which would be the first global accord to address international co-operation specifically on pandemics (and there will be more) – is in overtime and needs to be ready for adoption in May at the World Health Assembly in Geneva. It remains unclear whether agreement can be achieved, and how meaningful the substance would be.
More countries will look to increase their self-sufficiency in health security through regional co-operation and other alliances. The re-election of Trump will encourage a shift in global health leadership this year, but whether this gap is filled by middle powers, countries in the Global South or centres of power like the EU remains unclear.
Meanwhile, negotiations to resolve the world’s most persistent conflicts will continue in 2025. The wars in Gaza, Sudan, and Ukraine as well as recent developments in Syria — each carrying grave geopolitical and humanitarian consequences — will remain central to global peace and security.
