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The Cabinet has approved the withdrawal of 1,500 million euros from the so-called State emergency fund for the 2021 budget.
The emergency fund was established last year with a transfer of 1.5 billion euros from the Irish Strategic Investment Fund (ISIF), but plans to put up an additional 500 million euros each year were shelved due to Brexit.
Finance Minister Paschal Donohoe said the proceeds were necessary “to mitigate the exceptional circumstances arising from Covid-19.”
He said that the requirements for accessing the fund had been met and that it was “appropriate” to use the resources to help finance the 2021 Budget.
The withdrawal requires the approval of Dáil Éireann and Mr. Donohoe said it was his intention to file a motion to allow him access to the fund on Budget Day next week.
“We are in exceptional times. The fact that our public finances have been managed with such care in recent years put us in a good position and allowed us to attend to such contingencies, ”he said.
“It is appropriate now that we release the funds that are at our disposal, as we work to meet the needs of our people, support businesses, and fight to stabilize our economy once again,” said Donohoe.
The previous government led by Fine Gael first proposed the idea of a so-called emergency fund in 2016 as a buffer against future crises. The plan was used to save budget surpluses or excess income from corporation tax.
Originally, the government promised to set aside € 1 billion each year, starting in 2019, but was later revised down to € 500 million and then completely postponed due to Brexit.
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