MercoPress. South Atlantic News Agency

Ireland support measures for the economy preparing for the impact of Brexit

Irish Finance Minister Michael Noonan said Brexit prompted his department to reduce its GDP forecast to 3.5% for 2017.

The Irish government said on Tuesday it has introduced a number of specific measures to help firms that might be affected by the uncertainty caused by Britain's vote to leave the European Union (EU). The measures include an extension of the Special Assignee Relief Program, which gives designated individuals income tax relief for work done in the country until the end of 2020.

 The Foreign Earnings Deduction, which gives relief for “significant amounts” of work done in certain foreign countries, has also been changed to reduce the minimum number of days required to be spent abroad.

The reduced VAT rate for the tourism and hospitality industry will be maintained in order to provide a “buffer” against the weakness in sterling, while the Start Your Own Business scheme would be extended for a further two years.

Meanwhile, a number of measures will also be introduced for the agriculture food industry, including the ability for struggling farmers to “step out” of income averaging and pay only the tax due that year.

During his speech in parliament, Irish Finance Minister Michael Noonan said the Brexit vote prompted his department to reduce its GDP forecast to 3.5% for 2017. He said it was not possible to predict its exact impact on the Irish economy until a final settlement was agreed.

“Whatever the final settlement, 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,” he said.

Noonan said it was clear that Brexit represented a “real risk” to the economy given the close links and high level of trade between Ireland and Britain.

“Over 1.2 billion Euros of goods and services are exchanged between us on a weekly basis,” he said. “This trade supports 400,000 jobs, split evenly between the two islands, with many more jobs in the supply chain,” he added.

The Irish minister said tourism, food and agricultural businesses will be most directly hit by Brexit. He added the best outcome for Ireland would be for Britain to stay closely linked to the EU, with no “hard border” being introduced with Northern Ireland.

He also said the Irish government hopes to maintain the Common Travel Area, as well as the preservation of a common labor market between the two countries.