MOSCOW (Sputnik) — About 16 percent of Irish exports go to the United Kingdom, as well as 40 percent of exports from Ireland-based firms. Their bilateral trade supports some 400,000 jobs.
"What we know with certainty is that Brexit has increased risk to the Irish economy, and as well as introducing specific measures to assist particular sectors of the economy, we must also put in place safety nets to protect us against future economic shocks," Noonan said in parliament.
Noonan said he had cut the forecast for gross domestic product to 3.5 percent, although the Brexit impact to the Irish economy would ultimately depend on the United Kingdom’s settlement with the European Union and whether it stays in the EU single economic market.
To shore up the economy against the incoming shocks, the Finance Department has planned 300 million euros (almost $332 million) in tax cuts and 1.3 billion euros ($1.4 billion) worth of expenditure increases, including in public services.
Noonan confirmed that a "rainy day" contingency fund would be set up by the government to put aside an amount of up to 1 billion euros ($1.1 billion) annually to be used as an economic shock absorber.
Other budgetary measures include maintaining a reduced VAT rate for the recovering tourism industry. It will act as a buffer against the weakening pound sterling, which raises costs of holiday-making in Ireland for the Brits.
The draft budget, which will be debated by the national parliament in the coming weeks, was criticized by the opposition Fianna Fail party. Its finance spokesman Michael McGrath said the proposed post-Brexit safety measures looked "pathetic."
"If you compare that to what is being done throughout Europe by all of the other main countries who have a lot less at stake… they are investing a lot more and are a lot more prepared to what is coming down the track. And that package is pathetic," McGrath told the parliament.
McGrath stressed that the minority Fine Gael government needed to address these shortcomings and revise the budget very quickly. He called on the government to take a strong position at the upcoming UK-EU settlement talks to secure Ireland's economic benefits.
