Republic braced for Brexit storm with ra ft of new budget measures
Republic has announced a raft of measures in its budget to weather the impending Brexit economic storm.
With farmers and food businesses reeling from the unknowns of the UK quitting the European Union, €300m of low-cost loans are to be directed at firms suffering from cash flow crises.
Finance Minister Paschal Donohoe said the scheme would offer small and medium sized companies loans to support them with the financial impact of trade patterns being disrupted when the UK leaves the EU.
The loans will be on offer at “competitive rates” in order to help companies with their shortterm working capital needs.
“As the impact of Brexit unfolds over the coming years, it is clear that there are likely to be permanent changes in our trade patterns,” Mr Donohoe said. “Small and medium businesses will need to innovate and increasingly look to new European and international markets other than the UK.”
On top of the loans scheme is another €25m in funds for the agri-food sector which employs 173,000 people in the Republic.
To support these businesses 40 new staff will be hired to work with the state’s enterprise agencies, and agriculture chiefs will also have €50m specifically aimed at easing the fallout from Brexit.
Mr Donohoe told the Dail the budget aimed to guard against three main threats to the Republic — Brexit, the potential impact of US trade tariffs and various geo-political threats.
“It will help reduce the chances that future crises are homegrown and will mean that our economy and public finances are in a better position to weather crises stemming from external factors beyond our control,” Mr Donohoe said. “The list of potential external risks is lengthy.”
Other Brexit-proofing initia- tives include an extra €23m to expand the Republic’s diplomatic footprint in North and South America, India and Japan and across Europe.
Business lobbyists, including the British Irish Chamber which has been deeply focused on the impact on Brexit, gave a broad welcome. Its president Eoin O’Neill said easier access to loans would give small businesses much needed support.
“Greater funding for the state agencies will go some way towards supporting those businesses that are particularly exposed to Brexit,” he said.
A special reduced 9% VAT rate, introduced at the height of the Republic’s recession, has also been retained.
Business owners along the Irish border gave a mixed reaction to the loan scheme.
Peter Gallagher, who owns petrol stations in Blacklion and Belcoo on either side of the border, said: “It’s good that the government are taking an interest but a loan scheme won’t be anywhere near enough.
“They need to be more proactive in lobbying the UK and the EU so they get a good deal.”
Tom Muckian, who owns Roe River bookshop in Dundalk, said that while the Brexit loan scheme might help small businesses in the short term, it would do little to challenge the wider issues they face.
He said: “So many small businesses like us have been ignored for years.
“Why was there no loan scheme for small businesses in the dark years of the recession?”
However, Brendan Marmion, who has owned a decorating shop in Dundalk since 1985, said fears over the impact Brexit could have on border communities was unwarranted.
“I’m not worried about Brexit because I don’t think it will actually be able to happen.
“They’ll never be able to close the border or impose customs,” he said.