Ibec calls for business subsidies amid Brexit

As talks on Brexit formally begin in Brussels later today, it has been claimed that Irish companies may need to be subsidised to the tune of €300m to €400m per year in order to help them trade through the disruption.

Ibec, which made the call, suggested the funding should come from the EU and the Government.

It said the resources required will be in the region of 5% of the value of current indigenous annual export sales to the UK and that up to €400m may be needed annually in a worst-case scenario.

The employers’ body says the money would be to help firms innovate, diversify into new markets, train staff, and invest for the future.

It recognises that, given the size of our export/import relationship with Britain, under its proposal the supports Ireland would get from the EU would be greater than other states.

However, Fergal O’Brien, Ibec’s director of policy, said: “The situation is not of our making and we should not be economically challenged as a result of it.”

Ibec will today launch what it describes as a comprehensive set of proposals to progress EU-UK negotiations and limit the negative impact of Brexit.

It says the approach to the negotiations should, amongst other things, target a smooth exit, comprehensive transitional arrangements, the closest possible future relationship, and the unique Irish challenges.

It believes the recent election in Britain has opened up possibilities, not least a greater chance that it will remain in the customs union.

“An early focus on avoiding a hard border with Northern Ireland is vital, but the Irish approach must also be informed by the greater economic importance of the east-west Irish-British trading relationship,” said Ibec.

“Across both trade and investments, the outcome of negotiations must not disadvantage Ireland.”

As well as the state aid measures, Ibec makes recommendations around trade; customs; the single market and regulation; and the common travel area and the all-island economy.

“An agreement on trade and customs on the island of Ireland should be framed in the first phase of talks. The UK and EU should also agree a common transit system early in the negotiations.”

Ibec pointed out that there are certain sectors of the economy here which are particularly exposed by Brexit. While roughly 14% of goods and 20% of services exports go to the UK, that proportion is much higher for specific sectors of the economy.

It pointed out that, in the agri-food sector, over €4.3bn annually is spent on purchases from primary producers. A further €2.1bn is spent on compensation of employees in the sector who primarily live in rural areas.

READ MORE: Ibec warns of cliff-edge scenario for Ireland

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