Government publishes Brexit contingency plan

Plan outline priorities for how State will work ‘within EU context’ to manage fallout

Taoiseach Enda Kenny at Government Buildings making a statement after the UK voted to leave the EU. Photograph: Brenda Fitzsimons/The Irish Times

Taoiseach Enda Kenny at Government Buildings making a statement after the UK voted to leave the EU. Photograph: Brenda Fitzsimons/The Irish Times

 

Minister for Finance Michael Noonan warned about the potentially serious implications of Brexit for the Irish economy during an emergency meeting of the Cabinet at Government Buildings Friday.

Sources said Mr Noonan warned his colleagues about the severity of the consequences for the public finances if, as expected, the British referendum decision leads to a slowdown in economic growth.

This week’s summer economic statement reported the Department of Finance expects scope for a €1 billion giveaway Budget in the autumn, but some Government sources say this has been thrown into doubt by the outcome of the British vote.

However, some Ministers expressed alarm that Budget commitments might be abandoned before the effects of Brexit become clear.

Public Expenditure Minister Paschal Donohoe told The Irish Times that “expenditure plans for 2016 and 2017 are affordable and unchanged.”

But informed sources say it is inevitable the Government finances will tighten, meaning the scope for tax cuts and spending increases in future budgets will be restricted. Some believe they should prepare the public for this immediately, while others think it is better to wait. “There’s going to be a fight over this,” said one Minister.

Government sources have also said a central priority for the Government post-Brexit will be to ensure Britain is not “victimised” in the negotiations on the arrangements for Britain’s exit.

The Government yesterday published a new contingency plan to deal with key issues affecting Ireland after the referendum. The areas identified in it will be managed by Government departments and co-ordinated by the Department of the Taoiseach. A senior official in each department has already been appointed to have responsibility for the contingencies.

It is based on preparations over many months including inputs by government departments to identify the key strategic and sectoral issues arising from the UK disengaging with the EU, a Government statement said.

It said any actions by the European Central Bank and other global actors would be monitored closely and the National Treasury Management Agency (NTMA) would monitor development on the bond markets in the “coming days and weeks”.

Other key actions identified include:

- The provision of information and guidance for exporters, including a hotline on the practical implications of the Brexit result;

- A possible early meeting of the British-Irish Council;

- Tourism Ireland and Failte Ireland are to emphasise that while the UK is still a member of the EU, travel between the UK and on the island of Ireland remains free of any additional barriers.

On Northern Ireland, it said political and official contacts would continue but co-funded infrastructure projects might be affected.

The plan also noted the referendum decision created considerable administrative and resource issues for government departments. “The complexity of disengaging the UK from the shared policy and legal framework built up over 40 years of common EU membership should not be underestimated.”

The priorities identified by the contingency plan include the negotiations on a British departure from the EU; British-Irish relations; Northern Ireland; trade; investment; North-South Border impacts; competitiveness and macro-economic issues and research/innovation funding and energy.

More areas will be added “as the terms and conditions of the new UK/EU relationship evolve”, the Government statement said.

Issues will be tracked during the immediate aftermath of the referendum, the period leading up to the negotiations between the UK and the EU on an exit and during the negotiations themselves.

“The framework will ensure that the Government and its constituent Departments are able to focus on key policy areas/issues to be addressed in any exit negotiations with a view to minimising potential operational risks likely to arise.

“Detailed negotiation strategies will be prepared on each of the key points for use in negotiations in Brussels, London, Belfast and other capitals as appropriate.”