Ibec, the group that represents Irish business, today (November 14) called on the Government to introduce a suite of proposals to head off the worst consequences of Brexit and increased global uncertainty.
A new report by the group sets out a series of proposals to protect Irish businesses against the decline in sterling and potential loss of profit, investment and employment for business. The suggested measures include a new enterprise stabilisation fund, additional funding for market diversification, an access to finance package, trade finance measures and an expansion of online trading supports.
Ibec Director of Policy Fergal O’Brien said: “Brexit and the possibility of a more protectionist US pose very significant risks to Ireland. The budget introduced some useful measures in response to Brexit, but did not go nearly far enough. Companies are moving quickly to manage severe competitive pressures, but an urgent, targeted national response is required.
“The exporting industries most affected by the sterling fall are typically job intensive and deeply embedded in local economies. A review of the historical exchange rate and agri-food export relationship shows that a 1% weakness in sterling results in a 0.7% drop in Irish exports to the UK. This has already begun. Our most recent trade figures for the year to August showed the value of Irish food exports to the UK fell by 8.1% annually. This fall accelerated to 14.5% annually in the two months since the referendum and has hit all categories.”
Another concern Mr O’Brien expressed was that of cross-border shopping in the lead up to Christmas. “Central Bank statistics show that e-commerce transactions recorded on Irish debit and credit cards jumped by 20% from €1 billion to €1.2 billion between July and September as sterling dropped. This was way above trend and is likely to have mostly gone to UK retailers.”
Mr O’Brien warned of further volatility in the markets, and reiterated the need for Government support. “The Irish Government can't sit on its hands during these [Brexit] negotiations, while sustainable businesses fall prey to the already evident economic realities of Brexit. A comprehensive immediate response package is now needed to save jobs.”
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