Budgeting for a disorderly Brexit

Oct 13, 2020

An expectation of a no-deal Brexit is the backdrop against which Budget 2021 is set, with a range of supports announced to help the most vulnerable sectors of the economy to prepare for a “hard” Brexit.

Supporting the most vulnerable sectors

New funding of approximately €340 million has been set aside to get Ireland ready for the new trading environment that January 2021 will bring. These funds will be used to support Ireland’s economy over the coming year and will be allocated as the need arises to ensure Ireland remains competitive and resilient to the changes ahead.

While €100 million is earmarked for the Revenue Commissioners, Department of Enterprise, Trade and Employment and Department of Agriculture to help prepare for Brexit, some of the specific Brexit measures announced include:

  • Funds will be allocated to continue the preparatory work that is underway at Dublin Airport, Dublin Port and Rosslare EuroPort.
  • An additional 500 staff will be funded to undertake customs controls and checks, bringing the total staff allocation to 1,500.
  • Additional funding will be allocated to the sectors that will be most affected by Brexit namely:
    • Local Enterprise Offices, to help small businesses prepare for Brexit
    • Bord Bia, to help support the agri-food sector and develop new export markets
    • Enterprise Ireland and IDA, to help promote Ireland’s brand abroad
    • A number of regulatory agencies to help support businesses navigate changes in sectoral regulation
    • Expand Ireland’s diplomatic presence to ensure interests are represented in future talks.

In addition, a €3.4 billion Recovery Fund has been established to address the dual challenges of Brexit and COVID-19. Given the uncertainty surrounding the Brexit negotiations and outcome, where Brexit preparations need to be ramped up, funding can be released from this Recovery Fund.

European Funding

In July, the European Council agreed to establish a €5 billion Brexit Adjustment Reserve, a fund which will offer funds to countries and sectors that will be worst hit from Brexit. 

During his speech today, Minister Donohoe announced today that Ireland will seek to avail of these funds over the next few years given the large-scale impact Brexit will have on Ireland.  More details on this fund will be released in due course. Readers can keep an eye out for more information on our dedicated Brexit hub.

Shared Island Fund

A new multiannual capital funding for the Shared Island Initiative (part of the Programme for Government in Ireland) of €500 million is to be provided over five years to create new investment and development opportunities on a North/South basis and support delivery of key cross border initiatives. €50 million is to be made available in 2021.