Europe

Brexit: Irish budget prepared for no deal scenario

Paschal Donohoe described it as a "safe and careful budget" Image copyright PA Media
Image caption Paschal Donohoe described it as a "safe and careful budget"

The Republic of Ireland will prepare its budget for a no-deal Brexit, the country's finance minister has said.

Paschal Donohoe said it was to give certainty to businesses and people and to safeguard the national finances.

Mr Donohoe described it as a "safe and careful budget".

He said it will focus on ensuring the Irish government has the resources it needs to be ready for a shock at the end of October when the UK is due to leave the EU.

"Assuming a no-deal Brexit ensures the government has the necessary resources at its disposal to meet the impact of this exceptional challenge whilst preserving the longer-term sustainability of the public finances," he said.

Mr Donohoe also said that increases will be made to social welfare payments that will target the most vulnerable.

"We will have a social welfare package in the budget but it will be different in scale to previous years," he said.

'Minimal budget'

"The government will, of course, put in place the resources that are needed to support citizens at a time of change and difficulty, and to put in place the provision that may be needed to accommodate a reduced tax take due to fewer people at work.

"We will also have the provision in place to increase social welfare supports and funding due to a temporary increase in unemployment.

"We will also, in that phase of the budget, introduce timely, targeted and temporary measures for the sectors of our economy that could be, and will be, affected by a no-deal Brexit taking place."

The finance minister said that tax changes in next year's budget would be "minimal".

Mr Donohoe said that while the Irish government has committed to a budgetary package of 2.8bn euros (£2.49bn), it could go beyond that.

The government may have to put in place reserves to make more benefits available to those who become unemployed.

"That would have the case of moving it beyond the 2.8 billion euro framework, but I'd emphasise that would only take place in the context of a no-deal scenario," he said.

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