Michael McGrath (Cork South Central, Fianna Fail)
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75. To ask the Minister for Finance the revised fiscal space in net terms for each of the years from 2017 to 2021 arising from the British referendum outcome; and if he will make a statement on the matter. [18948/16]

Michael Noonan (Limerick City, Fine Gael)
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The impact of the UK (United Kingdom) exit from the European Union (EU) is currently difficult to ascertain given the volatility of the current fiscal and political sphere. Until Article 50 Lisbon Treaty is invoked by the UK and negotiations on the terms of their interaction with the EU, and with Ireland, begin it remains to be seen precisely what the impact on the UK economy will be in the medium to long term. Much will depend on the new arrangements, including on trade, that are yet to be agreed between the UK and the EU.

The fiscal space of just under €1 billion for 2017 set out in the Summer Economic Statement (SES) is not expected to change materially as almost all the factors used to calculate it under the expenditure benchmark are included the European Commission's 2016 Spring Economic Forecast.  Utilisation of this fiscal space in 2017 is consistent with compliance with the balanced budget rule based on the forecasts in the SES and this will be checked again in the forecasts to be prepared for the Budget in October.

For the ensuing years, 2018-2021, the impact is difficult to estimate given that the fiscal space estimations are based on Department of Finance projections for the GDP deflators, reference rates and convergence margins. Any negative impact on the UK economy in the medium term could have potential implications for the actual variables used to calculate the fiscal space in these years.  The actual final calculation for each year using the expenditure benchmark methodology will use the factors set out in the European Commission's Spring Forecasts of the previous year.

My Department's next official forecasts will be provided in October in the context of the Budget. The prudent economic and fiscal policies implemented over recent years have placed the State in a stronger position to weather any prolonged economic shock that may be caused by this result.