Dáil Éireann Debate, Thursday - 28 February 2019
21. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to identify and monitor weaknesses in the economy likely to be exploited by other non-EU jurisdictions in the aftermath of Brexit; and if he will make a statement on the matter. [9961/19]
Amharc ar fhreagraAs matters stand, the timing and nature of Brexit remains uncertain. However, it is clear that all forms of Brexit will have a negative impact on the Irish economy. The more disorderly the UK’s exit is from the EU, the larger the economic impact will be. Further the implications for our economy will be disproportionate relative to those for the rest of the EU. The most negative impacts are likely to be in agri-food and indigenous manufacturing sectors.
While my Department’s central economic and budgetary planning scenario remains an orderly exit based on the UK leaving with a transition arrangement in place, the risk of a disorderly Brexit has increased.
The UK is one of Ireland’s most important trading partners. In 2017 the Department of Finance published a paper on trade exposures [*] which shows that relative to other EU Member States, Irish exports are substantially more exposed to the UK in a number of goods sectors.
The top five most exposed included the Irish agri-food sub-sectors Cereals, Vegetables and Fruit, and Live Animal products. In services, Ireland is in the upper range of the most exposed EU Member States, particularly in Financial Services.
The paper also finds that the share of exports going to the UK has increased in a number of sectors over the past 15 years, including the agri-food sector, contrary to the trend decline in the importance of the UK as export destination for overall Irish exports.
Maintaining the closest possible trading relationship between the EU and the UK is therefore one of the Government’s key Brexit priorities. The Government will continue to work to improve the business environment – to make it more competitive, to assist exporters to diversify markets, and to provide better infrastructure.
Longer-term, we need to mitigate against the potential of regulatory divergence between the UK and EU standards given its potential implications for trade, investment and the competitiveness of our businesses. We will therefore be working to minimise this impact and to ensure a level playing field.
Since the referendum result in 2016, we have been taking steps to build up the resilience of the economy so that we have the capacity to deal with adverse economic shocks. This includes building up our Fiscal Buffers – by balancing our books and reducing our debt burden - and establishing the Rainy Day Fund.
The Government is continuing to work to prepare our economy for the challenges of Brexit, including through the Ireland Connected Trade and Investment Strategy and the 10-year National Development Plan. In addition, recent budgets have introduced specific initiatives, such as loan supports for agri-businesses, aimed at supporting those businesses most affected by Brexit.
[*] Department of Finance (2017) Trade Exposures of Sectors of the Irish Economy in a European Context.
