Thursday, 16 December 2021
Department of Finance
266. To ask the Minister for Finance the extent to which he remains satisfied that Ireland’s economy can and will remain competitive throughout the EU and or third countries; if particular economic threats have arisen in recent times not excluding Brexit or Covid-19; and if he will make a statement on the matter. [62736/21]
I propose to take Questions Nos. 263 and 266 together.
The latest figures from the CSO confirm the continued recovery of the domestic economy in the third quarter, as the success of the vaccination programme allowed for the easing of restrictions. Ireland’s external trade has supported the economy throughout the pandemic.
The global economy experienced the shock of the Covid-19 pandemic in a reasonably symmetric way and a strong but uneven recovery is under way. The economies of our major trading partners, including the EU, are expected to rebound significantly this year and next, creating a supportive external environment for Ireland’s trade going forward.
Multinational sector trade proved very resilient during the pandemic, and has continued to experience strong growth in 2021. Indigenous sector trade was more detrimentally affected by the pandemic, but has been recovering in line with strengthening global demand.
Looking to the future, the outlook for Irish indigenous exports is brighter in light of the strengthening global recovery, although Brexit is expected to have an impact on indigenous exports from next year. The Irish modified current account, which strips out the effects of globalisation, is in a strong position and is expected to remain in surplus over the medium term. This reflects the persistence of Ireland’s competitiveness on the international stage, for both indigenous and multinational trade.
Aside from Brexit and Covid-19, risks to Ireland’s external position include supply-side bottlenecks in international goods trade, global inflationary pressures and general macroeconomic risks which threaten the anticipated recovery among our trading partners. As a small open economy, Ireland is particularly exposed global risks and my Department continues to monitor them closely.
264. To ask the Minister for Finance the degree to which he and his ministerial colleagues throughout the European Union continue to co-ordinate efforts in the fight against Brexit; if extra measures are being considered; and if he will make a statement on the matter. [62734/21]
My colleagues across the European Union and I remain alert to the challenges and the potential economic impacts arising from Brexit. As one of the most affected Member States by Brexit, I pay particular attention to the effective implementation of the EU-UK Trade and Cooperation Agreement (TCA) and to the Withdrawal Agreement, which includes the Protocol on Ireland and Northern Ireland. Across the EU, solidarity with Ireland in respect of Brexit remains steadfast. The Member States support the Commission's approach in engaging and responding to genuine concerns from people and businesses in Northern Ireland.
As I mentioned in my Budget speech in October, it is important that we continue to prepare for any unforeseen consequences over the coming period. The Government remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples’ livelihoods to the greatest extent possible.
The Government has dedicated substantial resources to preparing for Brexit and the systems in place are working well. We have invested significantly in new infrastructure, systems and staff, and continue to engage intensively with stakeholders and to provide a range of financial, upskilling and advisory supports for impacted sectors and businesses.
Ireland will be the largest beneficiary from the Brexit Adjustment Reserve (BAR), the aim of which is to provide financial support to the most affected Member States, regions and sectors to deal with the adverse consequences of Brexit. Ireland is to receive €1.165 billion from the BAR, with the first disbursement of funds to be paid before the end of 2021. Funding will be directed at areas such as enterprise supports; supports for the agrifood and fisheries sectors, reskilling and retraining; and checks and controls at our ports and airports.