Ireland expected to apply for EU state aid compensation for sterling depreciation

According to co-op sources, Ireland will apply for EU state aid compensation for damage to exports due to the depreciation in the value of sterling since the Brexit referendum.

ICOS sources said the state aid offer was made in the informal meeting of EU agriculture ministers in the first week of September, and it is due to be discussed again by EU agricultural ministers on October 9-10.

With many exporters locked into long-term, sterling-based contracts, and forced to accept the lower value in euro, Irish agri-food businesses are particularly exposed to euro-sterling fluctuations. Depreciation of sterling is estimated to have knocked €570m off the value of our agri-food trade to the UK in 2016 alone, including €50m relating to cheddar cheese exports.

Agriculture Minister Michael Creed and Bord Bia CEO Tara McCarthy: Mr Creed has announced additional funding of €6.745m for Bord Bia in 2017, in a market diversification drive to address Brexit challenges.

Meanwhile, Tánaiste and Minister for Business, Enterprise and Innovation Frances Fitzgerald said last week that responses, from market diversification through to price repositioning, will be needed to support Irish businesses challenged by a structural shift in UK trading relations, due to Brexit.

She said her Department is working with the Departments of Finance and Agriculture, Food and the Marine; Enterprise Ireland; and the Strategic Banking Corporation of Ireland, to develop appropriate, tailored and targeted short, medium and long term responses.

Ms Fitzgerald said, “A lot can be done within the existing EU State Aid Framework”, to provide support to companies impacted by Brexit. “Should issues arise that require an approach that does not fit within the existing rules, we will move quickly to advance this with the EU Commission. On the critical issue of finance, following analysis and stakeholder consultation, my Department is working to develop appropriate, tailored and targeted responses to meet the needs of companies around working capital and business development schemes.”

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