Friday 18 October 2019

Paschal Donohoe confident Ireland can face 'no deal' Brexit

Finance Minister Paschal Donohoe. Picture: Frank McGrath
Finance Minister Paschal Donohoe. Picture: Frank McGrath

David Chance

Finance Minister Paschal Donohoe is to tell the Oireachtas Finance Committee later today that he is confident measures have been put in place to weather a no-deal Brexit.

With only 52 days left until Brexit kicks in on March 29, Minister Donohoe will tell the committee that he has met with top officials from the National Treasury Management Agency (NTMA), which manages the country’s debt, the Central Bank of Ireland and the Revenue Commissioners to assess readiness.

"All are engaging closely in the overall whole- of- government preparations, and are confident that they have put appropriate contingency measures in place to do everything possible to limit the inevitable disruption to consumers and trade, in the event of a no deal Brexit,” Mr Donohoe will say.

The Minister of Finance will again stress that the "backstop" is not for negotiation and that there is "no such thing" as a managed "no-deal".

Even in a cliff-edge Brexit, the Irish economy is likely to keep growing, albeit at a much slower pace than the breakneck levels of growth seen in recent years.

"The initial assessment by my Department suggests that the level of economic activity will be around 4.15pc points lower than our existing trajectory over the medium-term and will be around 6 percentage points lower compared to a ‘no Brexit’ scenario," the Minister will say.

A slowdown of such magnitude would cause the headline deficit to widen by as much as a percentage point of gross domestic product, while the unemployment rate would increase by an estimated 2pc points, relative to estimates made in the budget.

Mr Donohoe will say that the Central Bank of Ireland has been able to provide assurance that the financial system as a whole was resilient enough to withstand a hard Brexit and that the most material ‘cliff edge’ edge’ financial stability risks arising from Brexit "have been largely mitigated".

The Minister will announce plans for legislation as part of the government’s omnibus Brexit bills in tax, capital taxes, corporation taxes and stamp duty legislation to allow continuity for businesses post-Brexit.

Settlement of securities will also be facilitated in the bill while there will be a run-off period for UK and Gibraltar firms with insurance policies affecting customers here.

Online Editors

Also in Business