Ireland: The US–EU Bridge, Housing Crisis & the Sinn Féin Question

Ireland is governed by a coalition that, until 2020, would have been unthinkable: Fianna Fáil and Fine Gael — parties that fought on opposite sides of the Irish Civil War of 1922-23 and defined themselves as rivals for nearly a century — now share power for the second term. The arrangement was forced initially by the shock 2020 general election result, in which Sinn Féin won the largest share of first-preference votes. Rather than allow Sinn Féin into government, the two historic rivals joined forces with the Green Party to form a majority coalition. The same logic held after subsequent elections: both Fianna Fáil and Fine Gael have maintained a formal commitment not to enter government with Sinn Féin.

The result is a structurally unusual political landscape where the party polling highest in the country — Sinn Féin at around 24% — is effectively locked out of power. Sinn Féin has campaigned heavily on the housing crisis, which is Ireland’s most politically charged domestic issue. Ireland has one of the least affordable housing markets in Europe, driven by a chronic undersupply, high demand from a growing workforce (boosted by US tech companies) and a legacy of underinvestment in social housing. Dublin in particular has some of the highest rent-to-income ratios in the EU, and homelessness has risen sharply. The issue has fuelled Sinn Féin’s polling strength, particularly among younger voters who see homeownership as increasingly out of reach.

The coalition parties have made housing a priority but face criticism for the pace of delivery. Immigration has also become a more contested issue than historically in Ireland, with a small but vocal far-right movement emerging around concerns about asylum seeker accommodation in rural communities. The government has struggled to respond to this shift, caught between its traditional liberal and welcoming self-image and genuine pressure on housing and public services. Ireland’s neutrality policy — the country is not a NATO member — has come under renewed debate since Russia’s invasion of Ukraine, with some political figures calling for a formal defence alliance relationship and others insisting on the value of non-alignment.

No EU country has a relationship with the United States quite like Ireland’s. Approximately 40 million Americans claim Irish heritage — more than seven times Ireland’s own population — and the Irish diaspora is embedded throughout American political, cultural and business life. American presidents from John F. Kennedy and Ronald Reagan to Barack Obama and Joe Biden have claimed Irish roots and made ceremonial visits to Ireland, with the annual St. Patrick’s Day meeting between the Taoiseach and the US President a fixture in the Washington diplomatic calendar. This cultural affinity translates into genuine political leverage: Irish government lobbying on issues like the Northern Ireland peace process carries unusual weight in Washington.

Economically, Ireland has positioned itself as the EU’s English-speaking gateway for American business. The country’s 12.5% corporate tax rate — one of the lowest in the EU — combined with English as a first language, a young educated workforce, EU single market access and strong legal protections, attracted the European headquarters of Apple, Google, Meta, LinkedIn, Twitter (now X), Pfizer, Johnson & Johnson and hundreds of other US corporations. Foreign direct investment, predominantly from the US, accounts for a disproportionately large share of Irish GDP, tax receipts and employment. This dependence is a double-edged sword: Ireland benefits enormously from the US tech and pharma ecosystem, but is also exposed to any shift in US corporate tax policy or trade relations that could make Ireland a less attractive European hub.

The Northern Ireland dimension is a further link. Under the Good Friday Agreement of 1998 — brokered with heavy US involvement, particularly by Senator George Mitchell — Ireland plays a formal role in the governance of Northern Ireland through cross-border bodies. Brexit complicated this arrangement significantly, as Northern Ireland remained partly in the EU single market for goods while the Republic of Ireland remained a full EU member. The US has been a consistent and important guarantor of the GFA’s integrity, with successive administrations signalling that any disruption to the peace process would damage the broader US-UK and US-EU relationship.