Budget 2020: Irish government expected to put aside €800 million amid fears of No-Deal Brexit

Budget 2020: Irish government expected to put aside €800 million amid fears of No-Deal Brexit

Ireland's budget for the year 2020 will be announced today, and preparations for the increasing probability of a No-Deal Brexit are set to take centre stage.

While politicians are assuring citizens that there will be no dramatic cuts due to Ireland's generally stable economy, the likelihood of the UK crashing out of the EU without a deal has thrown a spanner in the works, to put it mildly.

In September, the Economic and Social Research Institute (ESRI) warned that a No-Deal Brexit could cause a recession in Ireland.

The Research Institute advised that the government should prepare a draft budget which could be amended in the result of No-Deal, however the Minister for Finance Pascal Donohue later confirmed that the budget was being prepared with the assumption that the UK would indeed 'crash out' of the EU.

Now, according to reports from RTE, the Irish government have made the drastic decision to put aside €800 million to deal with the fall-out of a No Deal exit.

Of the total amount, €500m will come from Ireland's 'Rainy Day' fund, €150m from EU funding and a further €150m from corporation taxes.

The fund will be accessed only in the event that the UK government fails to make a deal with the European Union, and will be separated into three sectors: Two-thirds of the fund is expected to go to Agriculture, with the remainder split between enterprise and tourism.

The government is also expected to announce support schemes for Irish businesses which could suffer under the consequences of No-Deal.

A further €100m is also expected to be put aside to assist with extra unemployment benefits, which could be needed to counteract job losses in the event of a No-Deal.

The UK is due to leave the EU in 23 days.