Tánaiste Simon Coveney seeking approval for Brexit Omnibus Bill and warns of no-deal
The spectre of Britain crashing out of the EU without a trade deal will be discussed at Cabinet today as the outgoing government launches contingency plans for when the Brexit transition period ends.
Tánaiste Simon Coveney will tell colleagues that Ireland does not believe Britain will seek an extension to the transition period after December 31 and that there are two possible scenarios then at the end of this year.
The first is that this might only allow for a limited trade deal while the second more worrying outcome might be that there would be no trade deal between the EU and Britain.
This would result in Britain and EU, including Ireland, trading on World Trade Organisation terms from January 1 next year, potentially forcing up the price of goods significantly.
The Brexit transition period began when Britain left the EU on January 31 and is due to conclude at the end of the year. Boris Johnson's government has repeatedly said the transition period will not be extended beyond the end of this year.
There is just one negotiating round left between the EU and Britain before the end of June deadline, where it will be decided at a key EU summit whether Britain simply breaks away from the bloc of the other 27 members without a trade deal next year.
Government sources say that the Tánaiste's memo today will include a state of play overview of the talks on the future trade deal and crucially ahead of those 4th round of planned talks starting next week.
Sources say all government departments are now preparing for both scenarios of either a limited trade deal with our Ireland's nearest neighbour or no deal at all.
Ireland and the EU want a trade deal that keeps Britain as close as possible. Since Brexit, Britain is no longer a member of the EU and therefore, no matter what, it will be outside the EU single market and customs zone when transitions ends.
Mr Coveney will seek approval from the caretaker government for a new Brexit Omnibus Bill to be drafted. This piece of umbrella legislation will cover the needs of eight government departments, in a similar manner to last year’s omnibus bill which addressed the impact of no withdrawal agreement.
The increased likelihood now of a limited trade deal or none at all comes at a time when the country is already facing potentially a €30bn deficit, from the impact of the Covid-19 pandemic.
The prospect of the country essentially fighting an economic war on both fronts, if there is no EU-UK trade deal, would further damage the public finances and is also a fresh headache for the next government.
Mr Coveney will also seek approval for a new communication campaign with key stakeholders including business and citizens to be ready for whatever scenario.
But Cabinet colleagues will also be told to note Britain’s commitments last week to the Brexit Withdrawal Agreement and the Irish protocol which guarantees no return to a hard border on the island regardless of the outcome of the trade talks.
The Cabinet is also expected to discuss the possibility of changing the €115m monthly deal to use private hospitals during the Covid-19 pandemic, preparations for phase two of the governments' lockdown exit roadmap and testing for the virus.
