Published by Global Banking and Finance Review
Posted on November 18, 2025
2 min readLast updated: January 21, 2026
Paschal Donohoe steps down as Ireland's finance minister to join the World Bank, leaving a gap in the Irish government and prompting potential reshuffles.
By Padraic Halpin and Graham Fahy
DUBLIN (Reuters) -Paschal Donohoe resigned as Irish finance minister and Eurogroup president on Tuesday to take up a senior World Bank role, a surprise move that will leave the coalition government without one of its most experienced members.
Donohoe has held one of the two main budget ministries for almost a decade and first became finance chief in 2017. He was only re-appointed to the role in January following an election, having helped guide the public finances to become one of the healthiest in Europe.
He was re-elected as chair of the group of euro zone finance ministers for a third time in July, in a term that was due to last two-and-a-half years.
"My aim has been to build a better and fairer Ireland through careful management of our economy and public finances," said Donohoe, who will move to the World Bank as one of its managing directors and chief knowledge officer later this month.
"I want to now do the same in the work of the globally vital institution that I will join, at a time of great change in our world," he told reporters.
ESCHEWED CALLS FOR BIGGER TAX CUTS
Fine Gael leader Simon Harris said he will announce "a number of changes" to his party's ministerial team later on Tuesday. Irish media speculated that Harris could move to the role of finance minister from foreign affairs.
Under the terms of the coalition deal with fellow centre-right partners Fianna Fail, Fine Gael is due to hold the finance brief until late 2027. Only one of Fine Gael's other members of cabinet has been a senior minister for more than two years.
Dubbed "Prudent Paschal" by some local media, Donohoe, 51, has often eschewed demands for spending large budget surpluses on even bigger tax cuts and increases in public spending.
He and Public Expenditure Minister Jack Chambers are due to publish a new medium-term economic plan shortly, having pledged to further moderate spending increases amid warnings that the corporate tax boom funding them could end suddenly.
"Paschal's prudent management of the public finances has underpinned Ireland's recovery and growth. He has been a voice of reason and stability," Harris said.
(Reporting by Padraic Halpin, writing by Sam Tabahriti; editing by Sarah Young, Ros Russell and Conor Humphries)
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured by GDP.
Corporate tax is a tax imposed on the income or profit of corporations, typically calculated as a percentage of the company's profits.
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