Dara Calleary
Question:348. Deputy Dara Calleary asked the Minister for Finance if his Department has assessed the likely impact of the EU–UK trade agreement on the public finances in 2021. [1870/21]
View answerWednesday, 31 March 2021
Questions (348)
Written answers
A key assumption underlying Budget 2021 was that there would be a disorderly end to the Brexit transition period.
It was in that context that my Department predicted a deficit of €20.5 billion, or 5.7 per cent of GDP for 2021.
Budget 2021 provided a further €100m to Departments in 2020 for Brexit preparedness measures, and €340 million in 2021. The allocation was to ensure the continuation of existing measures along with new supports for sectors and enterprises likely to be most affected. This was in addition to over €700 million in successive Budgets since 2017.
The Recovery Fund of €3.4 billion was also set up, and designed to allow for specific, targeted measures to be introduced when and where the need arises in response to both Brexit and Covid-19.
Since Budget 2021 last October, the situation has evolved. The EU-UK Trade and Cooperation Agreement is now in place. This will likely have a positive impact relative to the ‘no-deal’ scenario upon which the Budget projections were based. However, it is important to bear in mind that while the worst form of Brexit – involving tariffs and quotas on trade with the UK - has been avoided, Irish firms will still be impacted by the change in trading arrangements.
Updated medium-term macroeconomic and fiscal forecasts will be published in April with the Stability Programme Update.