Irish companies could suffer a €500 million a year loss in export sales to the UK under a disorderly Brexit, business lobby Ibec has warned.

Ibec is urging the Government to announce plans in Tuesday’s budget to make €1.5 billion in State aid available to help deal with the fallout from such a scenario.

It is calling for a multiannual funding framework in the budget to help stabilise the economy and protect jobs in the event of Britain crashing out of the European Union without a deal at the end of the month.

A new report from the group calls on the Government to ensure key supports are put in place sooner rather than later, with a key step being the introduction of a three-year rescue package that would cover a potential €500 million per year loss in export sales to the UK.

“A depreciation in sterling, cancelled investment, cashflow challenges and increased trade costs will all lead to significant pressure on companies in a no-deal scenario. However, the object of State intervention is not just to save companies but also the jobs, communities and downstream suppliers reliant on them,” Ibec said in its study.

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It calls for the reintroduction of an Enterprise Stabilisation Fund in the same vein as was made available during the financial crisis in 2009. It said such a package would not present a challenge to Single Market rules as it would only bring Ireland temporarily in line with the average state aid profile of other EU countries.

“As in 2009, a temporary framework for aid will be needed to offset the worst impacts on vulnerable but viable firms,” Ibec said.

“The European Commission must begin now to work with member states to achieve this. The current rescue and restructuring state aid rules will be of limited use given their extremely restrictive conditionality and limits on support,” it added.

Ibec chief economist Gerard Brady said timing is of the essence. He noted that it took 10 months from the time agreement on a state-aid framework was reached during the recession in 2009 until companies could draw down supports.

“It is imperative we introduce legislation and have structures in place to administer these schemes as soon as possible.”

Ibec urged the Government to take a number of additional steps to help protect against Brexit. These include introducing an employment subsidy scheme with subsidies of up to €10,000 over 24 months for workers at impacted companies.

It also calls for a new credit insurance programme for exporters diversifying away from the UK, and for a widening of the current SME credit guarantee scheme’s coverage of invoice discounting and factoring arrangements in Brexit impacted companies.

“Decisive and far-reaching government intervention would be required to protect jobs and support vulnerable, but viable, firms from day one. The risk of a ‘no deal’ is imminent and action is required immediately,” said Mr Brady.