Ireland working on support scheme for Irish firms in case of UK-EU no deal - report

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DUBLIN (Reuters) - Ireland is working on a financial support scheme to help food exporters maintain their share in the British market in the event of a ‘no deal’ exit for Britain from the European Union, Foreign Minister Simon Coveney was quoted as saying on Sunday.

Ireland would be the European Union country most impacted if the two sides fail to agree a trade deal before Britain’s status quo transition period with the trading bloc ends on Dec. 31.

“In my view, the focus of that support should be on maintaining market share. At some point in the future we will hopefully be trading again in Britain, and we certainly don’t want to be losing market share for a really important market,” Coveney told the Business Post newspaper in an interview.

While Irish firms have diversified into new markets since the 2016 Brexit referendum, cutting trade to Britain to 9% of total Irish goods exports last year, its near neighbour still accounts for around one-third of agri-food exports.

That sector would be hit with some of the heaviest tariffs if Britain departs the EU on WTO terms. Ireland’s large beef industry, which sells almost half of what it produces into Britain, would be subject to tariffs of 72%.

In a separate interview with the Sunday Independent, Deputy Prime Minister Leo Varadkar said ministers may have to spend the full 3.4 billion euro ($4.12 billion) COVID-19 and Brexit fund set aside in October’s budget for 2021 if there is a no deal and the pandemic continues beyond the summer.

He added that the wage subsidy scheme introduced this year for pandemic-hit firms and the Covid Restrictions Support Scheme for those forced into limited trade could be adopted to help firms adversely affected by a no-deal Brexit.

($1 = 0.8257 euros)

Reporting by Padraic Halpin; Editing by Raissa Kasolowsky