Joan Burton (Dublin West, Labour)
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194. To ask the Minister for Finance the preparations and contingency plans his Department has put in place in the event of a British exit from the European Union; and if he will make a statement on the matter. [9934/17]

Michael Noonan (Limerick City, Fine Gael)
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The Department of Finance has been assessing and preparing for the impact of Brexit since well before the referendum on 23 June 2016. Work was carried out in the Department to assess the potential economic and financial sector implications arising, including through the ESRI-Department of Finance research programme study published in November 2015 titled 'Scoping the Possible Economic Implications of Brexit on Ireland'. This work was undertaken within the whole-of-Government framework established by the Department of the Taoiseach.

Following the result of the UK referendum and to prepare for the forthcoming negotiations, work has been intensified across the whole of Government including in the Department of Finance. A new Brexit Unit, within the EU and International Division, was established in July 2016 to oversee and coordinate this work and to act as a key liaison point with the Department of the Taoiseach, in particular. In addition, the Department of Finance staff complement in the Irish Permanent Representation to the EU in Brussels has been strengthened. 

As part of Budget 2017, the Department of Finance published the Economic and Fiscal outlook which presented a full macroeconomic projection including updated estimates of economic growth, the public finances and the fiscal space, taking account inter alia of the impact of Brexit. As part of Budget 2017, the Department also published detailed analysis of sectoral exposure to Brexit across the economy.  Utilising the sectoral exposure analysis, Budget 2017 included a number of measures to respond to the challenges of Brexit, to mitigate future risks, and to support any opportunities that might arise. These included measures to support SMEs, entrepreneurship, agri-food and Irish exporters. The Department also worked with the ESRI to deepen the macroeconomic analysis and a report entitled 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland' was published in November 2016.  Updated macroeconomic forecasts will be published by the Department as part of the Stability Programme Update in April 2017.

Important work is also ongoing in relation to financial services. In particular, on 23 January 2017, Minister of State Murphy launched the International Financial Services (IFS 2020) Action Plan 2017 which sets out the approach to Brexit for this sector.

The best and most immediate policy under the Government's control to counter the likely negative economic impacts of Brexit is to prudently manage the public finances in order to ensure that Ireland's economy continues to remain competitive in the face of future economic headwinds. In this context, Budget 2017 signalled a lower debt target of 45 per cent of GDP for the mid-to-late 2020s. This will help to provide an additional fiscal 'shock absorber' capacity to the public finances to help withstand any shock including the impact of Brexit. This will complement the contingency or 'rainy day' fund to be established following the achievement of a balanced budget in 2018 which will help provide a further counter-cyclical buffer.

The work being done by the Department will be an important input to ensuring that Ireland will be in a position to counter any negative economic impact arising from Brexit and to ensure that Ireland's interests are protected in the upcoming negotiations at EU level.  The Department will continue to monitor the economic impacts, to carry out relevant analysis and to frame budgetary policy advice in this new context.