Anglo-Irish relations have been put under strain by Brexit and will continue to be strained in the future says Minister for Finance, Public Expenditure and Reform, Paschal Donohoe.
He told RTÉ radio’s Today with Sean O’Rourke show that personally, he did not support Jeffrey Donaldson’s call for Ireland to rejoin the Commonwealth. The future of Anglo-Irish relations will have to be debated in great detail.
Mr Donohoe said he believes that an orderly Brexit is still likely, but acknowledged that a no deal Brexit could cost 50,000 jobs in the next few years.
“The economy will still grow, just at a slower pace.”
He said that the predicted rate of growth for the economy in 2019 will be 4.2%, but if there is a no deal Brexit that would be reduced to 2.7%, this would mean 50,000 fewer jobs up to 2023.
The Government has in place a range of measures to support Irish business and agriculture, he added.
At the moment “the books are balanced” he said. A no deal Brexit could mean a deficit of 0.2% which could rise to 0.5% next year. State borrowing to facilitate a 0.5% deficit could mean borrowings of between €1.5bn and €1.8bn, he explained.
“What we do depends on the nature of the no deal.”
Mr Donohoe said that he still intends to continue investment of €1.5bn in the Rainy Day Fund this year.
“If there is a disorderly scenario, we will explore all our options including using the Rainy Day Fund.”
Mr Donohoe said that in the event of an orderly exit, it is important to ensure that the country has a tax code where someone who is on an average wage is not paying higher tax.
He also defended plans for the indexation of pensions (linked to inflation), saying this could give clarity and security to people rather than waiting until “the last minute” to find out increases.
“Regina is right to want to give security to people. Pensioners want to know where they stand.”
Later today, MPs in the UK will debate an amendable British Government motion on the Brexit deal on Monday, where they will have the chance to put their favoured outcomes to a vote.