€1.2bn Brexit crash-out cash as Downing Street says deal now ‘impossible’
Business and farmers to get hundreds of millions in aid
A MASSIVE spending package of as much as €1.2bn will be triggered if there’s a crashout Brexit as Paschal Donohoe delivered an unprecedented Budget aimed at shielding the country from the worst-case scenario.
Hundreds of millions of euro in financial support for business and agriculture is to be made available from day one of a no-deal Brexit.
Meanwhile, there will also be increased funds for the deployment of 600 customs staff and to cope with the ongoing surge in passport applications from Britain and the North.
The State will borrow €650m if there is a disorderly UK exit from the EU and €410m is to be made available to cover the potential cost of thousands of job losses and retraining for those who become unemployed.
Tánaiste Simon Coveney last night said more than €1.2bn was being made available to “protect Ireland from the worst effects of a no deal”, but he added that he hopes never to access the funding.
“I hope to be able to tell Paschal Donohoe to take back the money because it’s not needed because we have an orderly and managed Brexit,” he said.
Mr Coveney said once sums already being spent on Brexit preparedness are taken into account “you’re talking about close to €1.5bn of money in this Budget”.
Finance Minister Mr Donohoe delivered his Budget even as fears of a crash-out Brexit escalated due to developments in London and Brussels.
Downing Street sources claimed that the EU has made an agreement “impossible” after a phone call between British Prime Minister Boris Johnson and German Chancellor Angela Merkel.
This prompted European Council President Donald Tusk to warn that “what’s at stake is not winning some stupid blame game”.
Mr Donohoe told the Dáil that: “Brexit is the most pressing and immediate risk to our economy.” He said €200m will be spent on Brexit-related measures, including staff at ports and airports no matter what happens.
The Revenue has been allocated €18m in extra funding, including the cost of 600 customs staff, 584 of whom have already been hired.
The Department of Foreign Affairs is to spend €21.2m on Brexit-related issues, including the cost of the passport service meeting spiralling demand.
Mr Donohoe said that there would be a further no-deal package using €650m in borrowed money in the event of the UK crashing out of the EU later this month.
This would be spent supporting the agriculture, enterprise and tourism sectors.
A total of €220m of this would be made available immediately in the event of a no deal – half for funding financial support such as loans and grants for businesses and half to help farmers.
Mr Donohoe also confirmed plans to abandon a €500m top-up of the “Rainy Day” fund next year because of the threat posed by Brexit.
A series of ministers later set their departments’ no-deal Brexit plans.
Business Minister Heather Humphreys said: “Given the ongoing political uncertainty in the UK, the chances of a no-deal Brexit are high.
“That is why on day one of a crash-out my department will have immediate access to €110m to support vulnerable but viable firms.”
Agriculture Minister Michael Creed said he was hopeful of “very significant EU funding” to augment the €110m in no-deal supports that will be available for agri-food.
Tourism Minister Shane Ross referred to fears that 10,000 people will lose their jobs in the sector and said the Government was setting aside €40m for the industry.
Social Protection Minister Regina Doherty said €45m had been set aside for job activation schemes and also for a feared rise in unemployment.
She added: “I hope obviously to keep the live register as low as we can through these initiatives.”
Mr Donohoe was last night asked by ‘RTÉ News’ about the deteriorating relations between London and the EU – and if he believed a no-deal Brexit was now inevitable.
He said the renewed turmoil in the Brexit process showed that the Government made “the correct call” in framing the Budget for a no-deal Brexit.
He added he didn’t believe a crash-out was inevitable but that it was more likely.
He said: “I do believe even in the time that is still available it is possible to engage in a way that perhaps can stave off the very worst.”
Fianna Fáil Brexit spokesperson Lisa Chambers said the Budget was “rightly based on a disorderly Brexit”.
But she criticised the situation that will see the State borrowing €650m, claiming this wouldn’t have to be done if “Fine Gael had been judicious and ran surpluses in the last three years when they had the money available”.
‘That is why on day one of a crash-out my department will have immediate access to €110m to support firms’