Cushioning the blow: Ireland budgets 1.2 bn euros for 'no-deal' Brexit

The DCNI has issued a stark warning about the milk processing capacity in the north

The DCNI has issued a stark warning about the milk processing capacity in the north

Irish Finance Minister Paschal Donohoe announced on Tuesday that the Irish government has prepared over 1.2 billion euros (about 1.3 billion US dollars) in its 2020 budget to deal with Brexit.

Paschal Donohoe told BBC Radio 4's Today programme: "In terms of the charge that the Irish Government is looking to trap anybody in any kind of arrangement, that is absolutely not the case".

The first part of the funding will be allocated next year across a number of departments and agencies to increase the level of staffing, upgrade infrastructure at Irish ports and airports and invest in information technology and facilities management, explained Donohoe.

"The dairy industry in Northern Ireland simply does not have the capacity to process all the milk produced on farms at present and we are seriously exposed", Dr Johnston said.

The Government will need to increase borrowing to fund the support package, much of which will be spent in the form of loans, grants and capital funding.

"This is a Budget without precedent".

"This is a budget developed in the shadow of Brexit and the context for Brexit has shifted to no deal as our central assumption, this does not mean no deal is inevitable, but equally we stand ready if it does happen", he told the Dail parliament in Dublin.

"Budget 2020 is explicitly designed around the risk of a "no-deal" Brexit, where we project 0.7% growth next year in contrast to 5.5% growth this year".

The spending plan is based on the anticipated gloomy financial outlook if the United Kingdom leaves with European Union without an agreement on October 31.

The British economy will considerably worsen in the event of a no-deal Brexit, the Institute for Fiscal Studies (IFS), a London-based independent economic research institute, said on Tuesday.

The budget also included measures to tackle climate change, including a six euro per tonne hike in carbon tax.

There is also a €650m fund for the agriculture, enterprise and tourism sectors - and to assist most affected workers and regions.

In his comments on the housing sector, Mr Donohoe said he is increasing the homelessness budget by €20m, housing assistance payment by €80m and committed to building 11,000 new social houses next year and 12,000 in 2021.

"It aims to further improve our national finances while the demands on public spending are so many".

Schulz added that the impact of uncertainty on investment has left the economy an estimated £60 billion smaller than it would have been with a Remain victory in 2016, but warned that continued uncertainty from a further Brexit delay would continue to weigh heavily on growth, leaving it at one per cent per year.

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