Brexit and the Economy
Brexit and the Economy
Department of Finance preparations
Internally the Department of Finance undertakes rolling analysis which focusses on the key policy issues arising for the Department:
- Macroeconomic impact
- Financial Stability issues
- EU financial services policy
- Irish financial services sector
- EU Budget
Given the potentially negative political and economic risks that could result from Brexit, there is a need to ensure that Ireland is in the best possible position to respond to the challenges that it will bring. The best preparation is to pursue responsible budgetary policy to rebuild fiscal capacity through eliminating budget deficits and targeting the reduction of our stock of debt.
In order to achieve this the Government is taking a number of measures aimed at building fiscal resilience which are outlined below.
Budget 2019 Measures
Budget 2019 will ensure that the economy is prepared for the challenges of Brexit through continued prudent management of the public finances, including through:
- Eliminating the headline deficit;
- Achieving the medium term budgetary objective
- Building up the Rainy Day Fund;
- Reducing the debt burden;
- Investing in infrastructure to boost competitiveness and productivity; and
Budget 2019 also contains a number of specific measures aimed at making Ireland Brexit ready including:
- The introduction of a new €300m longer-term loan scheme, the Future Growth Loan Scheme, which will provide a longer-term loan facility for terms of 8-10 years to support strategic capital investment for SMEs and the agriculture and food sector.
- The allocation of €115m for measures across a number of Departments, including a €25m allocation for preparedness measures towards essential customs requirements.
- Increased funding to the Departments of Business, Enterprise and Innovation and Foreign Affairs and Trade to support the diversification of our exports, the opening of new markets for our businesses and a higher international profile.
- Funding towards the €500 million Disruptive Technologies Innovation Fund for co-funded projects involving enterprise and research partners over the period to 2027
- Targeted changes to Key Employee Engagement Programme (KEEP) scheme to support SMEs to attract and retain key staff
Building on Budget 2017 and Budget 2018, this Budget will help to ensure that Ireland is in the best possible position to respond to the challenges – and indeed the opportunities – that Brexit will bring. The measures introduced in Budget 2019 continue the process of ensuring that Ireland’s economy continues to remain competitive and resilient against the backdrop of heightened uncertainty, including from Brexit. For more information, click the picture below to visit the Budget website.
Where Brexit presents potential opportunities, we will of course seek to maximise these. In relation to international financial services (IFS), Minister of State, Michael D’Arcy TD, has responsibility for the implementation of our IFS2020 Strategy. We will continue to leverage the IFS2020 Strategy in order to maximise potential opportunities in the IFS sector. The latest iteration of the Strategy, the IFS2020 Action Plan 2018, places a strong focus on Brexit and is fully integrated into the wider cross-Government Brexit contingency planning. Work has begun on a successor strategy to IFS2020 to place the sector on a strong footing over the coming years.