On 8 October 2019, Paschal Donohoe, Minister for Finance in the Irish Government, delivered his annual budget speech to the Dáil. Unsurprisingly, Brexit dominated his speech as it is the most pressing and immediate risk to Ireland’s economy. Ireland is the country most exposed to Brexit disruption, owing to deep historical trade links with the UK.
Supply2Gov highlights the key takeaways from Mr Donohoe’s Budget Report 2020.
Ireland is preparing for Brexit
In his opening address, the Minister for Finance stated that his report was developed in the shadow of Brexit uncertainty. With a UK ‘No Deal’ exit from the EU becoming more of a realistic outcome, Mr Donohoe said such an eventuality would expose Ireland to severe economic damage:
“The context for Brexit has now shifted to No Deal as our central assumption. This does not mean that No Deal is inevitable. But equally we stand ready if it does happen. In preparing for No Deal, we can ensure that the Government has the necessary resources at its disposal to meet the impact of Brexit…’
Overall, the Budget Report 2020 could be described as cautious and conservative, designed to protect Ireland and Irish businesses in the face of any Brexit outcome, come what may. Ireland’s economy has grown steadily since the recession of 2008. Central Statistics Office (CSO) figures show the Irish economy grew by 8.2% in the last year alone, a healthy progress which the Irish Government is determined to protect. Given the progress made in recent years, Mr Donohoe’s approach to his Budget Report 2020 has broadly met with positivity and support from Irish businesses and citizens alike.
A total of €1.2 billion has been set aside to offset the effects of a No Deal Brexit. This fund is intended to support vulnerable but viable companies, agriculture and tourism. A breakdown of the fund includes €650 million to support companies, farms and tourism; €365 million for new welfare spending to meet any rise in unemployment; and €200 million in Brexit spending at ports and airports that will be needed even if a Brexit deal is reached with the UK.
Mr Donohue predicts the Irish economy will still grow by 0.7% in gross domestic product terms, albeit a marked slowing down in the pace of growth over the last year. However, with further investment in public services and support for businesses, this represents a remarkably positive picture for winning public sector tenders in Ireland.
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