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Finance | Brexit financial impact

To ask the Minister for Finance his views on whether Brexit is having a financially negative impact on this jurisdiction and the island of Ireland; and if he will make a statement on the matter.

My Government colleagues and I remain alert to the challenges and the potential economic impacts arising from Brexit, including paying particular attention to the effective implementation of the Trade and Cooperation Agreement (TCA) and to the Withdrawal Agreement, which includes the Protocol on Ireland and Northern Ireland. Following the appointment of a new UK Prime Minister and her Government, discussions are resuming on the implementation of the Protocol.

Brexit will have a negative impact on the Irish economy compared to when both Ireland and the UK were members of the European Union. That said, the disruption to the domestic economy from Brexit is playing out more slowly than the fast-moving shocks we have also experienced in terms of Covid-19 and the impact of the situation in Ukraine.

While the Trade and Cooperation Agreement provides for tariff-free trade between the EU and the UK, non-tariff barriers – such as regulatory checks – will weigh on cross-border trade. The UK has announced the postponement of the introduction of further import controls to the end of 2023. As a result, the full impact of Brexit will not be evident for some time, however this will not lessen the impact on the Irish economy.

Building on its early and extensive contingency planning and analysis work which started even before the 2016 referendum, the Government has dedicated substantial resources to preparing for Brexit and the systems in place are working well. We have invested significantly in new infrastructure, systems and staff, and continue to engage intensively with stakeholders and to provide a range of financial, upskilling and advisory supports for impacted sectors and businesses.

Ireland will be the largest beneficiary from the Brexit Adjustment Reserve (BAR), receiving €1.165 billion, the aim of which is to provide financial support to the most affected Member States, regions and sectors to deal with the adverse consequences of Brexit. Funding will be directed at areas such as enterprise supports; supports for the agri-food and fisheries sectors, reskilling and retraining; and checks and controls at our ports and airports. Work is continuing across Government, with all Departments examining measures that need to be taken to counteract the negative consequences of Brexit. Further allocations from the BAR will be made as the impacts of Brexit are worked through.

It remains important that we continue to prepare for any unforeseen consequences over the coming period, including as discussions continue on the implementation of the Protocol on Ireland and Northern Ireland. The Government is committed and remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples’ livelihoods to the greatest extent possible.

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