Paschal Donohue was unanimously re-elected president of the Eurogroup by his fellow eurozone finance ministers as he warned the monetary sector faces “difficult times”.

Donohue told reporters that the euro zone was facing difficult economic times due to uncertain growth and inflation following Russia’s invasion of Ukraine.

Asked about the benefits of having an Irish minister in the position, Donohoe said the course of the Irish economy was closely linked to the eurozone.

“What I want to say to Irish voters is that the Irish economy is small and open, and our prosperity, security and growth are uniquely affected by what happens within the eurozone, where we share a currency,” he said.

The growth of the Eurozone and the strength of the Euro are fundamental factors in the growth potential of the Irish economy. So, what I want to do as a person representing a country that has changed the perspective of the European Union is to play my part in the growth and security of the Euro in the years to come and play a role in its growth. ‘The Irish Economy’.

Mr Donohue emerged as the sole candidate, paving the way for a second term of two-and-a-half years, which will include presiding over meetings of finance ministers from countries that use the euro.

He is expected to move to public expenditure and reform minister in an upcoming cabinet reshuffle, meaning Fianna Fáil’s Michael McGrath is likely to attend Eurogroup meetings as finance minister and Ireland’s representative.

Turbulence in the future

Ministers from the 19 countries that use the euro faced a bleak economic outlook as they met to discuss budget forecasts, rising energy prices and inflation.

The European Commission has predicted the EU could slip into recession this winter, before resuming lower growth next year.

Chief economist Paolo Gentiloni said the decline in inflation would be “very gradual” in 2023, while “we have to be very careful” when inflation appears to have peaked.

He expressed concern that spending by EU governments to help households with energy bills would be applied too widely, raising inflation and increasing public debt.

“That’s why we encourage member states to better target these measures,” he said, recommending that universal energy subsidies be replaced by targeted payments to the most vulnerable households that include “incentives for energy savings.”

The meeting marks the end of a long road for Greece, with reforms implemented by Athens meaning the conditions have now been met for the release of the latest debt relief measures for the Greek economy, Donohoe announced.

Donohue called it a “historic moment” and a “very important milestone” for Greece as it ends the latest procedures and financial controls since its bailout during the last global financial crisis.

“Greece is now standing firmly again, as part of the European family in the EU’s joint measures of economic and financial coordination,” Donohue said.

The Eurogroup played a key role in brokering bailout deals during the recent financial crisis, and its influence will grow further if the economic turmoil expected next year threatens the financial stability of member states.

Mr Donohue chairs the group as it faces proposals to overhaul the EU’s tax rules, a policy area where countries are deeply divided.

The Eurogroup’s membership will expand to include an additional finance minister when Croatia becomes the 20th member of the eurozone on January 1, when it introduces the euro as its currency.