Thursday 22 August 2019

No deal Brexit could cost Ireland €6bn, Finance Minister warns

Budget architect: Finance Minister Paschal Donohoe working on Budget 2020. Photo: Gerry Mooney
Budget architect: Finance Minister Paschal Donohoe working on Budget 2020. Photo: Gerry Mooney
Philip Ryan

Philip Ryan

Finance Minister Paschal Donohoe has warned a no deal Brexit could cost the country a massive €6bn.

Speaking before the Oireachtas Budgetary Oversight Committee, Mr Donohoe said: “If, as appears increasingly possible, there is a disorderly Brexit, there will be significant pressure placed on the public finances.”

The minister said a disorderly Brexit would result in a budget deficit of between 0.5 and 1.5 per cent in 2020.

“This amounts to a negative swing in the headline balance of up to €6 billion,” Mr Donohoe said.

The minister said the government would run a budget surplus of 0.4pc if Britain crashed out of the EU. He also raised the prospect of temporary budget measures for certain sectors to limit the damage from a no deal Brexit.

“The United Kingdom’s exit from the European Union will have a detrimental impact on our economy and public finances whatever form it ultimately takes,” he said.

“But the magnitude of that impact depends upon how disorderly that exit is. There is no precedent in modern economic history for an event like Brexit, and, as such, predicting its impact precisely is difficult,” he said.

Mr Donohoe said he expected to make a decision in September on whether he will introduce a no deal budget or an orderly Brexit budget.

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