Picture used for illustrative purpose. File

Ireland will need to set aside at least 1 billion euros ($1.2 billion) in next month's budget for 2021 to prepare for the possibility of a no-deal Brexit, Foreign Minister Simon Coveney was quoted as saying on Sunday.

Ireland's economy is considered the most vulnerable EU member to an unruly British exit due to its close trade links and Dublin set aside a similar amount a year ago when the initial withdrawal negotiations went to the wire.

Britain ended up leaving the European Union on Jan. 31 but talks have so far made little headway on agreeing a new trade deal with the bloc by the time a status-quo transition arrangement ends in December. 

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Ireland's tax authority will write to 90,000 business this week urging them to ramp up their customs expertise and the government will publish a revised Brexit plan preparing for two outcomes, Coveney told the Sunday Independent newspaper in an interview.

"One is bad. One is very bad," Coveney was quoted as saying. "I don't believe there's any good outcome to Brexit now from an Irish perspective but it's a matter of damage limitation."

The 1.2 billion euros Ireland set aside for Brexit a year ago has since been swallowed up by the far larger response to COVID-19 that is set to swing the public finances from surplus to a deficit of up to 30 billion euros or 10% of GDP this year. 

Reuters