Ibec - for Irish business
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Key actions in light of Brexit economic disruption

19 June 2017


1. Agree a temporary state aid framework

As in 2009 a temporary framework for state aid will be needed at a European level in order to offset the worst impacts of Brexit on otherwise viable firms.

The Commission must begin now to work with European member states in order to achieve this. The current rescue and restructuring state aid rules are designed to rescue large strategic industries which have already gone through liquidation. This will be of limited use to enable viable business affected by Brexit to diversify and restructure. It will limit the ability of government to deliver enterprise stabilisation, market diversification and trade finance measures. Intensity ratios in regional aid guidelines may also need to be re-examined given the significant regional impacts of Brexit.


2. Change how the European Globalisation Adjustment Fund works

The European Globalisation Adjustment Fund (EGF) was established to assist workers made redundant through the negative consequents of globalisation by co-funding labour market activation, training, education and enterprise supports. The scope of the scheme was broadened in 2009 as part of the European Economic Recovery Plan to include workers made redundant as a direct result of the global financial and economic crisis. This was accompanied by a recognition that “in order to enable the EGF to intervene in ongoing or future crisis situations, its scope should cover redundancies resulting from a serious economic disruption caused by a continuation of the global financial and economic crisis addressed in Regulation (EC) No 546/2009, or by a new global financial and economic crisis.” It is our position that Brexit as a fracture of the Single Market is a crisis and the scope of the regulation should be expanded to include European workers impacted.


3. Spend much more on connective infrastructure

The ‘Juncker’ Investment Plan focuses on removing obstacles and mobilising investment in Europe. So far it has been a qualified success albeit unequally across Europe. There must be a greater focus on ramping up connective investment (i.e. road, ports and air) in regions that have now been left more remote from other EU nations. In addition to this, more fiscal flexibility must be provided to member state governments to invest. Capital investment targets (as a % of GDP) should be set at a European level and there should be additional flexibility to distribute or depreciate the cost of investment over the lifetime of the asset. This can be achieved while at the same time making sure fiscal rules continue to provide a strong framework for day to day expenditure.