Tony McLoughlin (Sligo-Leitrim, Fine Gael)
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125. To ask the Minister for Finance the steps he will take to counter the likely negative impact of Brexit here in view of the triggering of Article 50; and if he will make a statement on the matter. [16928/17]

Michael Noonan (Limerick City, Fine Gael)
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The Department of Finance has been assessing and preparing for the impact of a British exit from the European Union since well before the referendum on 23 June 2016.

The challenges which we face as a result of Brexit are mainstreamed across all divisions of my Department and this is reflected in business planning. Work conducted in the Department to assess the potential economic and financial sector implications arising from Brexit, includes a scoping study in November 2015 under the Department of Finance-ESRI joint research programme; an initial short-term economic estimate published in the Summer Economic Statement 2016; an in-depth analysis of the possible sectorial and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published with Budget 2017; and, a joint research paper with the ESRI that modelled the medium to long term macroeconomic impact of Brexit under a number of scenarios, including a WTO relationship. All of these outputs have been made public.

In April 2017, updated macroeconomic forecasts will be published by my Department, as part of the Stability Programme Update.

We know from our own published research that the potential impact on the Irish economy is significant.  It is important to recognise that the full impact of the UK's exit is only expected to materialise over time. As we cannot control the international environment, we will need to continue to improve our competitiveness, including by focussing on costs we can control, by boosting our productivity and ensuring sustainable public finances.

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.

Important steps have already been taken to prepare the economy. In Budget 2017, I confirmed the Government's intention to establish a rainy day fund, to commence in 2019 after Ireland has achieved its Medium Term Objective under the EU's fiscal rules and is running balanced or surplus budgets; I also announced the Government's decision to set a new domestic target of a debt to GDP ratio of 45 percent to be reached by the mid-2020s, or thereafter, depending on economic growth.  These decisions will help to ensure that the public finances can withstand negative impacts from Brexit or other economic shocks. Also in Budget 2017, I announced a number of sectorial measures to mitigate Brexit impacts in exposed sectors of the economy.

Officials from my Department are working closely with the Department of Jobs, Enterprise and Innovation and the Strategic Banking Corporation of Ireland (SBCI) to assess the potential impact of Brexit on the SME sector.  The Deputy may also wish to note that, aside from the SBCI, there are significant Government measures to support the financing needs of SMEs that are facing challenges (over 170 supports are provided by 30 separate agencies).  These measures include the Supporting SMEs Online Tool, the Credit Guarantee Scheme, the Microenterprise Loan Fund, Local Enterprise Offices and the Credit Review Office.  These supports will play an important role in assisting companies and SMEs to meet the challenges of Brexit.

Separately, Minister of State Eoghan Murphy T.D. has responsibility for Financial Services, including the implementation of the International Financial Services (IFS) 2020 Strategy.  Important work is ongoing, as part of IFS 2020, to ensure that we maximise opportunities for inward investment arising as a result of Brexit.

We are now at the start of a process within which there is expected to be a number of phases. The Department of Finance contingency work continues to examine all scenarios in relation to Brexit, and will continue to monitor the economic impacts, to carry out relevant analysis and to frame budgetary policy advice in this new context.  The work being done by the Department will help to ensure that Ireland will be in a position to respond to the economic challenges arising from Brexit and to ensure that Ireland's interests are protected in the upcoming negotiations at EU level.