Micheál Martin returns as Irish premier, bracing for Trump fallout

Micheál Martin was elected Irish prime minister for the second time by a coalition of the two large centre-right parties and independents on Thursday, underlining a main task as warding off threats arising from Donald Trump's return as US president.

The government is bracing for the fallout from the new US administration under Trump, whose pledges to upend corporate tax rules and impose tariffs pose a potentially major threat to Ireland's foreign multinational-focused economy.

The coalition has promised to use a tax windfall from the country's cluster of US multinationals to continue to increase public sector investment, fix infrastructure deficits and cut taxes, while also building Ireland's sovereign wealth funds.

It is the second consecutive governing bloc between historic rivals Fine Gael and Fianna Fail, who between them have led every government since Ireland's founding. This time, independents replaced junior coalition partner the Green Party, which lost most of its seats.

"For us today, the task is to protect Ireland's strength at a moment of real threat, while also addressing critical social needs. By any reasonable measure this is a challenging moment in world history," an emotional Martin told parliament after he was elected in a 95-76 vote.

He said that central to protecting and renewing Ireland's economic model will be strengthening "three essential relationships" with Europe, the US and Britain.

ECB chief Christine Lagarde said that on Wednesday in Davos, as concerns grow that Donald Trump's America First policies could mean European firms are the loser.

"We are not naive about the realities of change (in the US), but equally the Ireland-America relationship is one which benefits us both and it will emerge strongly no matter what."

The initially scheduled vote to elect Martin on Wednesday descended into chaos when parliament was suspended four times after opposition protests over speaking rights for independent lawmakers supporting the incoming coalition.

Martin, 64, was premier from 2020-22 before handing the position to Fine Gael for the second half of the term. Under the deal struck following the Nov 29 election, outgoing prime minister Simon Harris is set to return as premier in late 2027.

Harris will replace Martin as deputy prime minister and is also likely to take over as foreign minister later on Thursday while Fine Gael's Paschal Donohoe, chair of the group of euro zone finance ministers, is tipped to return as finance minister.

Martin, first elected to parliament 36 years ago, was a senior member of the Fianna Fail government that signed up to an EU/IMF bailout in 2010, which led to an unprecedented 2011 electoral collapse just after he took over as leader.

The former history teacher, who has held several senior ministries including health, trade and education, spearheaded a swift recovery in the party's fortunes to return them to government nine years later.