Monday 24 July 2017

Fears hard Brexit could add €20bn to national debt

Michael McGrath Picture: Tom Burke
Michael McGrath Picture: Tom Burke
Donal O'Donovan

Donal O'Donovan

A hard Brexit could cost Ireland 40,000 jobs in the medium term and add €20bn to the national debt, according to the Department of Finance.

There are just four officials at the department's head office in Dublin dedicated to addressing Brexit, the Oireachtas Finance Committee was told yesterday.

The chief economist at the Department of Finance, John McCarthy, said exports to the UK could fall as much as a third in the event of a worst-case Brexit deal.

The figures are based on a model that looked at likely trade levels if the UK cuts all ties with the European Union bar those common to all World Trade Organisation (WTO) members.

They also assume no policy response by the Government here, which is highly unlikely.

Under WTO rules, exports of meat would be hit with a 50pc tariff, and tariffs would add 25pc to the cost of Irish dairy for UK consumers.

The figures produced by the Department of Finance are based on the loss of potential growth and jobs in the Irish economy.

They show a hard Brexit would mean slower growth - with the economy 4pc smaller after 10 years - and fewer jobs being created, but not an overall decline in employment, based on current trends.

There are just four staff in the Department of Finance dedicated solely to responding to the fall out from Brexit, its secretary general Derek Moran told TDs and senators.

An additional five-and-a-half staff in Brussels are working full time on the issue.

"A lot of people will be shocked by how threadbare the resources in the department are," Fianna Fáil finance spokesman Michael McGrath told the officials.

"The Department of Finance is responsible for shaping our economic strategy and has a central role to play in designing and implementing our response to Brexit."

Mr Moran said the dedicated staff did not represent the true numbers working on the issue, saying it was being dealt with on a "whole of department basis".

Mr Moran told Sinn Féin's Pearse Doherty that he believed his department is up to the challenge posed by Brexit.

Irish Independent

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