Government funding will go beyond the pledged €2.8 billion package for Budget day in the event of a no-deal Brexit, Minister for Finance Paschal Donohoe has confirmed.
Speaking in the Dáil, he acknowledged that in such a scenario, there would be a “temporary deficit” rather than a surplus the Government would otherwise have expected.
He said he will announce the overall framework of that additional funding on Budget day but it would be up to individual ministers to give details of how that funding would be made available in a no deal setting.
He told Fianna Fáil finance spokesman Michael McGrath that in relation to “whether the resources will go beyond the €2.8 billion if we’re in a no-deal setting, the answer to that questions is yes”.
He said the consequences of greater unemployment and the requirement to support some sectors most exposed to Brexit-related disruption “will mean reducing a surplus we would otherwise have and moving into a temporary deficit”.
The Minister also indicated that the Government would give details in October of the contingency measures to be put in place for the Border.
Mr Donohoe was speaking in the Dáil during finance questions as the Economic and Social Research Institute (ESRI) said the Government should consider a supplementary budget in the New Year in response to Brexit.
The ESRI said in its latest quarterly economic commentary a no-deal Brexit could push the economy into recession. It also warned that if Brexit did not happen the economy could overheat.
However, Mr Donohoe told Independent TD Tommy Broughan that "before any of us reach a diagnosis that the economy is overheating we need to be far clearer on where we are on the deflationary and growth slowing effects that Brexit might bring".
Mr McGrath said there may be a growing view in political circles that Brexit may not come to a head in October the reality is they are just five weeks from a potential cliff edge.
He called on the Minister to confirm he would set out in the context of his no-deal Brexit package an overall scenario that could perhaps go “well beyond the €2.8 billion but that that additional money will only be called on in the event of a no deal”.
Earlier this month, the Cabinet had been warned that there would be no extra funding and that the figures allowed for a Budget-day package of €2.8 billion, of which €2.1 billion has already been committed. Mr Donohoe confirmed these were the figures as he prepared the budget for a no-deal Brexit.
Mr McGrath said they were now so close to the Brexit deadline that people in cross-border trade want to know when the Government expects to give an indication - and subsequently the detail - of its contingency plans.
The Minister said the ending of talks with the European Commission depended on the engagement between the EU and UK in the run-up to the European Council meeting in mid-October.
“But I take your point - if we move into October Irish businesses will need to know contingency plans are.”
