The finance minister is working with the European Investment Bank to fund new enterprise support schemes for struggling businesses ahead of October’s budget.
Earlier this week Paschal Donohoe held talks with the bank, which provides EU member states with low-cost funding. The prospect of the EIB providing additional funding to improve the country’s infrastructure was also discussed, he said.
Mr Donohoe said he was hopeful that support similar to that announced in last year’s budget for companies in the agri-food sector could be introduced for other industries. “We are making progress on discussions with them regarding funding that they may be able to provide from an enterprise support perspective that deals with the kind of success, for example, that we’ve had in agriculture in last year’s budget,” Mr Donohoe said.
Last year the government allocated €150 million for a low-cost loan fund for farmers reeling from the initial impact of Brexit.
Michael Noonan, the former finance minister, also increased funding to the rural development scheme by €107 million, which included €25 million for a new animal welfare sheep scheme.
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An additional €3 million was given to the Department of Enterprise and the agencies under its control, including Enterprise Ireland and the IDA, to increase staff in response to Brexit.
Enterprise Ireland has hired just 13 of the additional 39 staff it was given permission to add while IDA Ireland has filled four of ten Brexit-related roles.
Addressing the Oireachtas budget oversight committee yesterday, Mr Donohoe again warned that the economy could overheat within the next year. Ireland’s economy has grown faster than any other in the European Union for the past three years and is showing few signs of slowing down, with employment expanding at its fastest rate since the financial crisis.
The government plans to further stimulate growth through a near doubling of capital spending over the next five years, which remains among the lowest in the bloc after it ground to a near halt during the crisis.
“We need to be very careful that we don’t increase capital expenditure to a level that can cause other difficulties,” Mr Donohoe said.
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Seamus Coffey, the head of the Irish Fiscal Advisory Council, also said this week that there were no signs yet that growth rates were unsustainably high, but overheating could not be ruled out.
Mr Donohoe has warned that the labour market could soon begin to experience capacity constraints but yesterday said there was still room for further cuts in the unemployment rate, which currently sits at 6.3 per cent.