Saturday 25 May 2019

No need for an emergency budget even if the UK crashes out, insists Donohoe

Paschal Donohoe says he believes his Budget ‘will hold’. Photo: Steve Humphreys
Paschal Donohoe says he believes his Budget ‘will hold’. Photo: Steve Humphreys
Kevin Doyle

Kevin Doyle

There will not be an emergency budget next year, even if the UK crashes out of the EU without a deal, Finance Minister Paschal Donohoe insists.

Even though a number of ministers have warned that a no-deal Brexit would be catastrophic for Ireland, Mr Donohoe insists the Budget announced last month catered for all scenarios.

It included tax cuts worth around €5 a week to the average worker and an extra €5 on all social welfare payments. There was also an extra €1bn for the embattled Department of Health.

Asked by the Irish Independent whether this would all still be affordable if the country is facing a worst-case-scenario Brexit, Mr Donohoe said: "I'm confident. We put together a Budget that looks to deal with making sure our economy is Brexit-proofed.

"[I believe] that this is an economy and a Budget that can withstand many of the different Brexit scenarios."

Ireland will be the country worst affected by Brexit outside of the UK itself.

British Chancellor Philip Hammond said he expected to be forced to prepare an alternative budget to the one he revealed in recent weeks if there was no deal.

He said the UK government would "prepare and plan for all eventualities as any prudent government would - if we were to find ourselves in that situation then we would need to take a different approach to the future of Britain's economy.

"Frankly, we'd need to have a new budget that set out a different strategy for the future."

Mr Donohoe said this showed why it was "so important" that the UK and EU sign off on an orderly transition period.

"We are going into next year's Budget with books that are fully balanced, while setting up a rainy day fund and that will give us the resilience to deal with many of the different challenges we could have," the minister said, adding: "I believe this Budget will hold."

Mr Donohoe is just one of a string of ministers who are attending meetings with counterparts in Europe this week before prime ministers gather on Sunday to approve the Withdrawal Agreement. The impact Brexit will have on EU economies is likely to form a major part of the debate ahead of the special summit.

For the moment, Ireland's economy is holding up strongly, although shares have suffered at the growing expectation that British Prime Minister Theresa May will not get the deal through parliament.

Recruitment consultants Morgan McKinley will today report the number of professionals seeking work is the highest that it has been all year. It puts this partly down to a 'Brexit boost' as Ireland experiences a big inflow of talent from the UK and EU.

Irish Independent

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