The Financial Times yesterday reported that Ireland is preparing a frugal no-deal Brexit budget for 2020 in the clearest sign yet that Dublin is bracing for the UK to crash out of the EU without an exit agreement.

The spending plans also suggest that Leo Varadkar’s government is prepared to resist any British pressure to make concessions on the “backstop” deal struck for the Irish border. UK MPs’ concern over the backstop led to Theresa May, the British prime minister, failing to win approval for her EU withdrawal agreement with Brussels.

Boris Johnson has also claimed he can take the UK out of the bloc without an exit deal unless better terms are secured. Such a stance is difficult for Ireland, which because of strong UK trade links is the EU country most exposed to a hard Brexit. 

The Financial Times claims Mr Varadkar’s willingness to push ahead with a budget that anticipates Britain leaving the EU without a deal indicates he would sooner tackle a disorderly Brexit than offer a last-minute compromise on the border.

The report suggests Dublin’s decision to proceed with a no-deal fiscal plan is also significant because it all but eliminates scope for Mr Varadkar to woo voters with budgetary largesse next year. His minority government faces the prospect of a general election whenever Brexit is settled.

Source: www.businessworld.ie