Bernard Durkan (Kildare North, Fine Gael)
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62. To ask the Minister for Finance the extent to which Ireland has been able to avail of any opportunities in Europe arising from Brexit; and if he will make a statement on the matter. [10878/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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Ireland regrets the UK’s decision to leave the EU, however we have always respected it. As a result of Brexit, many aspects of our relationship with our nearest neighbour have changed fundamentally as we no longer share EU membership.

The net impact of Brexit on the policy areas within my remit is negative. The principal negative impact arises from the trade shock, mitigated somewhat by a positive Foreign Direct Investment impact resulting from a redirection to Ireland of investment from firms looking to relocate within the EU Single Market. Ireland’s international financial services sector is expected to become broader and more diverse as a result of such relocations.

In the face of Brexit, the Government has been taking steps to build up the resilience of the economy by developing and expanding our economic and trade relationships, both with our EU partners and with other overseas markets. The Mission Network abroad, in partnership with the State Agencies, is playing an important role in terms of public and economic diplomacy.

While we no longer share EU membership with the UK, Ireland continues to share good, strong and enduring relationships with the other members of the EU27. This was most visibly demonstrated during the EU-UK negotiations on the future relationship, in respect of the Northern Ireland Protocol and work to avoid a hard border on the island of Ireland; as well as in the recent publication of the Commission’s proposal on the Brexit Adjustment Reserve, where Ireland is set to be the largest recipient, reflecting our close economic and trade relationship with the UK.

We look forward to continuing to work with our EU partners across the full range of policy areas, as well as working with like-minded Member States as we seek to promote Ireland’s policy priorities. We will also continue to work closely with our EU partners as we navigate the common opportunities and challenges before us, such as ensuring a shared and even economic recovery as we overcome the Covid-19 pandemic.

Bernard Durkan (Kildare North, Fine Gael)
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63. To ask the Minister for Finance if the economy has been able to withstand the impact of Brexit to date; if particular issues have arisen that might require attention; and if he will make a statement on the matter. [10879/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The new Trade and Cooperation Agreement between the EU and UK was a positive outcome of the Brexit negotiations. However, the new agreement still represents a break from previously existing arrangements, and thus a permanent shock to the Irish economy. Therefore, Brexit will still have a negative economic impact on the Irish economy and living standards compared to the previous relationship.

For Irish exporters, the Trade and Cooperation Agreement is positive, compared to a no-deal scenario, as it provides for zero-tariffs and zero-quota trade for qualifying EU and UK goods. However, it is important to note that the agreement does not completely mitigate against trade frictions in the form of non-tariff barriers, such as customs checks and procedures. So, while tariffs and quotas have been avoided for qualifying goods, non-tariff measures or non-tariff barriers represent a change in trading relations and an increased cost to trade. In addition, disturbances to retail and distribution supply chains could have a direct impact on Irish consumers through reduced competition and higher prices.

The Government has put in place extensive financial supports for sectors over recent years to assist businesses to prepare for and mitigate the impacts of Brexit, including various financial, advisory, and up-skilling supports. The Government has also invested heavily in port infrastructure, as well as working closely with businesses to navigate the new customs arrangements.

In the weeks since the end of the transition period on 31 December 2020, a level of trade friction has been evident. Given the phased basis of the new import controls which must be applied by the UK, it will take time for these to feed through to overall exporting activity, and to assess any associated economic impact.

Bernard Durkan (Kildare North, Fine Gael)
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64. To ask the Minister for Finance if Ireland’s peripheral geographic location is likely to be borne in mind at European level when consideration is being given to assistance that might become available for countries most severely hit by the negative impact of Brexit; and if he will make a statement on the matter. [10881/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, in July 2020, as part of the 2021-2027 Multi-annual Financial Framework negotiations, leaders agreed on a €5 billion Brexit Adjustment Reserve (BAR) to counter unforeseen and adverse consequences in Member States and sectors that are worst affected by the UK’s withdrawal from the EU. Since July 2020, Ireland has taken every opportunity to make its position on the BAR known to the European Commission and to demonstrate the impact Brexit has on us, as the most affected Member State.

In December 2020, the European Commission published its detailed proposal for the BAR, including an allocation key, setting out how the instrument would work and how much should be allocated to each Member State. Under the Commission’s proposal, €4 billion of the total €5 billion instrument will be disbursed in 2021 using an allocation method based on the importance of trade in goods and services with the UK and the importance of fisheries in the UK waters. Under the initial €4 billion tranche of funds, Ireland is set to receive approximately €1 billion (€991 million in 2018 prices, or €1052 million when adjusted for inflation). This proposed allocation is significantly higher than any other Member State. Importantly, the instrument takes into account the high level of trade that Ireland has with the UK, as a result of our close geographical location to the UK. Other Member States geographically and economically close to the UK also see this relationship reflected in their proposed allocations.

The Commission's proposal for the BAR is currently being negotiated at Council level by the Member States and then with the European Parliament. Therefore, the above-described proposal might not be exactly reflected in the final agreement. My Department, along with the Department of Public Expenditure and Reform, Department of Foreign Affairs and Department of the Taoiseach will continue to work hard to ensure that the final BAR outcome reflects the fact that Brexit has a greater impact on Ireland that on any other Member State.