Irish companies need government help to weather Brexit, business body says
Targeted initiatives to help Irish companies weather the impact of Brexit must be included in the upcoming budget, a business representative body has urged.
Ibec said businesses needed support as they looked to widen their markets to offset the potential loss of UK trade.
The organisation called for a three year programme of funding in this month's budget that would foster innovation, market diversification, workforce upskilling and capital expenditure on equipment and machinery.
Ibec's head of tax and fiscal policy, Gerard Brady, said: "Negotiations have yet to provide any clarity as to what future EU-UK relations will look like.
"While we must work to ensure a close, positive relationship into the future, the risk of a divisive divorce is very real. We cannot afford to simply wait to see what happens. The government must introduce a range of measures to ensure the economy is prepared for all eventualities.
"Brexit involves an unprecedented fracture of the single market, with Ireland particularly exposed.
"It is vital that both EU institutions and our own government fully appreciate the potential for economic disruption and take decisive steps to offset such risks. In order to support businesses during this difficult period, funding should be provided over a three year period to help companies adapt."
He added: "A strategy solely based on diversification will not be sufficient to get companies through any period of disruption.
"Loss of UK market share, where it occurs, is likely to happen relatively quickly whilst building new markets abroad can take years and even decades.
"Diversification also involves considerable risk and expense. Even within the single market companies face barriers in establishing commercial relationships, adapting supply-chains, building cash-flow, tailoring product and marketing to consumer tastes and overcoming administrative barriers to dealing with new tax and regulatory regimes.
"Even in a best outcome scenario margins will be tighter in new markets and cash-flow needs will increase. Many companies which may be viable in the long-term may not have the cash-flow to survive the transition. This will require government support."