2011
The 31st Dáil convened for the first time on 9 March 2011, the Dáil nominated Kenny for appointment as Taoiseach by a vote of 117–27. Kenny received his seal of office from President Mary McAleese. He also announced ministerial appointees to his Government on 9 March 2011. At just under 59 years and 11 months on accession, Kenny was the second-oldest person to have assumed the office for the first time, the oldest being Seán Lemass.
On 9 March 2011, Kenny appointed 15 junior Ministers. He also appointed a minister for political reform, and sent a request to the Office of Public Works as to how he could address ministerial transport. On 15 March 2011, it was announced that only the current president, the Taoiseach, the Tánaiste and the Minister for Justice and Equality were to have Garda drivers. All other Ministers would have to make use of their own transport with a mileage allowance and a commercial chauffeur as an expense. There was no announcement as to the continuing engagement of three government jets.
In one of his first acts as Taoiseach, Kenny reduced his own pay and that of senior Ministers.
On 11 March 2011, Kenny attended his first European Council as Taoiseach, in Brussels. During that summit, he engaged in a heated confrontation with President of France Nicolas Sarkozy (which Kenny termed "a Gallic spat") over Ireland's comparatively low 12.5% corporate tax rate, which EU leaders have frequently posited as a condition of more favourable terms for the Irish bailout. Kenny held firm on his refusal to alter the corporate tax, which he reiterated in his first Leaders' Questions the following week—also declaring his government's intention to withhold further state funds from Dublin banks until the EU agreed to new terms that forced banks' senior bondholders to share in the losses.
However, less than three weeks later, on 31 March 2011, the Central Bank of Ireland published the results of its "stress tests" on Ireland's four surviving banks (Allied Irish Banks, Bank of Ireland, EBS, and Irish Life & Permanent) — indicating that the banks needed to raise an additional €24,000,000,000 to remain solvent. Despite his earlier promise, the government announced the same day that the state would supply the necessary funds to keep the banks afloat, with Kenny stating that seeking the money from bondholders would be neither "reasonable or logical".
Kenny was heavily criticised for his government's action, with the Irish Independent noting that "this is the fifth time Irish people have been told over the past couple of years it would be the last payout they would have to endure".
Nevertheless, the first national opinion poll since Kenny took office, published on 10 April 2011, showed that public support for Kenny's Fine Gael party had increased since the election from 36% to 39%, although a plurality also indicated deep dissatisfaction with his rescue of the banks.
2011 also saw the introduction of clampdowns on banker salaries, banker bonuses and an effective ban on variable pay, including for things like private health insurance and childcare. A salary cap of €500,000 was introduced to bankers in the bailed out Irish banks. This represented a cut of as high as 87.5% from top banker salaries of €4 million during 2006. An 89% 'Super Tax' was introduced on banker bonuses above €20,000. These measures were only relaxed in 2023.
On 21 July 2011, Kenny announced that an agreement had been reached by Eurozone leaders to reduce Ireland's interest rate by 2% and extend the repayment period.
On 9 May 2011, Kenny's government announced a new job creation program, along with a plan to finance it via a 0.6% tax levy on private pension savings. Public pension funds, however, would remain untouched. The pension levy caused an immediate and intense outcry, leaving Kenny to defend the initiative as "a modest proposal" and refuting charges that the government would next tax personal savings. However, the controversy surrounding the levy intensified on 12 May 2011, when Kenny admitted that the holders of Approved Retirement Funds—most of whom were among the highest income earners in Ireland—would not be included in the levy.
On 3 May 2011, Kenny's government approved a set of political reforms that adhered to promises he had made in the general election. Among the approved reforms were a binding Constituency Commission scheduled for June 2011, with the specific purpose of reducing the number of TDs by up to 20; an act to establish a six-month time limit for holding by-elections to the Dáil; a €750,000 spending limit in the 2011 presidential election; legislation to ban corporate donations, to be enacted by summer 2011; establishment of a Constitutional Convention in 2011, which was to include discussion of the future of the Seanad; and a referendum on its abolition, to be held in the second half of 2012. The promise to cut up to 20 TDs caused some controversy and scepticism, due to the Constitutional requirement that there be no less than one TD for every 30,000 people, which would necessitate a minimum of 150 TDs—meaning that the current number of 166 TDs could be reduced by 16 at most.
On 13 July 2011, the Cloyne Report was published, detailing the investigation into allegations of child sexual abuse by 19 priests in the Roman Catholic Diocese of Cloyne. Among the report's findings were the revelation that the vast majority of allegations made in the diocese were not reported to the Gardaí, as required by the Church's 1996 guidelines; that the Bishop of the Diocese, John Magee, and others had withheld full co-operation with the Government's investigation and had deliberately misrepresented his own response to the allegations; and that the Vatican itself had both refused to co-operate in the investigation and counselled the Diocese that the 1996 guidelines were not binding.
On 20 July 2011, Kenny condemned the Vatican for its role in the scandal, stating that the Church's role in obstructing the investigation was a serious infringement upon the sovereignty of Ireland and that the scandal revealed "the dysfunction, disconnection and elitism that dominates the culture of the Vatican to this day". He added that "the historic relationship between church and state in Ireland could not be the same again".
Kenny's attack on the Vatican was unprecedented by a high-level official in Ireland. The speech was widely regarded as extraordinary, with the Daily Mail commenting that the attack was "the first time that Ireland's Parliament has publicly castigated the Vatican instead of local church leaders during the country's 17 years of paedophile-priest scandals". The Guardian remarked that "the political classes have...lost their fear, namely of the once almighty Roman Catholic church."
On 3 September, the Holy See issued its response to Kenny's speech noting that "the accusation that the Holy See attempted "to frustrate an Inquiry in a sovereign, democratic republic as little as three years ago, not three decades ago", which Kenny made no attempt to substantiate, is unfounded. Indeed, when asked, a Government spokesperson clarified that Kenny was not referring to any specific incident". The response added that "Those Reports [...] contain no evidence to suggest that the Holy See meddled in the internal affairs of the Irish State or, for that matter, was involved in the day-to-day management of Irish dioceses or religious congregations with respect to sexual abuse issues".
Kenny gave a televised address to the nation on 4 December 2011, ahead of the delivery of the 2012 Irish budget. He warned that Budget 2012 "will be tough", and that "it has to be". He also said that it would move Ireland towards a manageable deficit of 3% of GDP by 2015. This was only the sixth time that a Taoiseach had addressed the nation, reflecting the gravity of the Irish economic condition, in what Kenny stressed were "exceptional" circumstances. The broadcast was the second-most watched television programme of 2011 in Ireland, attracting an audience of 1.2 million viewers.
