IRISH taxpayers will pick up the majority of the tab for propping up vulnerable business sectors should a no-deal Brexit occur, Tánaiste Simon Coveney has said.
Speaking at Fine Gael’s think-in at Garryvoe in East Cork, Mr Coveney said he believes it is important not to “sugarcoat” the consequences of a no-deal scenario and added temporary checks for goods entering the Republic will have to be put in place temporarily.
“The most important thing this Government needs to do is to level with people in terms of what a no-deal Brexit actually means. We shouldn’t be sugarcoating anything. In that scenario we need to protect Ireland’s place in the single market by having some checking systems somewhere away from the border.
“We don’t regard those checks as a permanent arrangement by a long shot. It is a temporary arrangement to protect our place in the single market."
Recent talks between UK Prime Minister Boris Johnson and Taoiseach Leo Varadkar did not lead to any breakthrough and Mr Coveney said, with 49 days until Britain exits the EU, there is still “a big gap”
“Three things must be resolved first: citizens’ rights issues; a financial settlement in terms of the contributions the British Government has agreed to up until 2021 and the Irish border question,” Mr Coveney said.
“If you look at the evidence as opposed to the language that is being used, it’s difficult not to be sceptical. There hasn’t been any substantial proposals from the British negotiating team to the Michel Barnier taskforce. There certainly hasn’t been any proposal [that comes] close to what the backstop does.
“It’s easy to be sceptical [and] negative but I think the job here of politicians is to try and find a way through the fog. I think the meeting between the Prime Minister and Taoiseach was helpful in that regard. The Prime Minister was adamant that he wants to find a deal.
“There’s a willingness to find new approaches but there’s still a big gap.”
He said financial support will be on hand from the EU in the event of a no-deal but he added the Irish exchequer will pick up most of the tab for supporting economies that will suffer.
The financial management of a no-deal will be a combination of seeking funding from the European Union and borrowing to ensure we protect vulnerable sectors in the Irish market.
"I don’t think it’s any secret what those sectors are. It’s agri-food, farming, fishing and the tourism and hospitality sector that would be impacted by a pound that would lose significant value and a whole range of tariff and non-tariff trade barriers that would make the economy much more difficult.
"There are other EU funding streams for job losses to compensate for the shock of a no-deal Brexit. The majority of funding that we will be allocated to support vulnerable sectors will probably come from the Irish exchequer and that’s why we are designing a budget accordingly,” he added.