The Irish government unveiled Tuesday a 300-million-euro ($354 million) loan scheme for small businesses buffeted by Brexit, in a move designed to spur innovation and investment needed to tap new markets.

The loan scheme for small and medium-sized businesses was announced as part of a major Brexit-proofing spending package in Irish Finance Minister Paschal Donohoe's 2018 budget.

The heavy reliance of Irish businesses on trade with Britain has spurred fears they could face difficulties when the UK leaves the EU in March 2019. The possible reinstatement of a hard border between the two countries has also caused concerns.

"As the impact of Brexit unfolds over the coming years, it is clear that there are likely to be permanent changes in our trade patterns," Donohoe said.

"Small and medium businesses will need to innovate and increasingly look to new European and international markets other than the UK," he added.

The proposal -- dubbed a "Brexit Loan Scheme" -- will offer competitive interest rates of around four percent on loans to businesses with up to 499 employees.

The initiative will receive funding from the Irish government as well as the European Investment Bank Group, the European Commission and the Strategic Banking Corporation of Ireland.

Donohoe also promised that an extra 25 million euros in loans would be set aside for farmers and food processors, noting Irish food businesses are uniquely exposed to the British market.

Deputy head of government Frances Fitzgerald said the measures would "help Irish exporters to grow their international sales and diversify their markets."

The British Irish Chamber of Commerce welcomed the announcements, which it said would provide "much needed support" to small and medium-sized businesses, which employ over 69 percent of the workforce.

Ireland has also announced the opening of new diplomatic representations in Chile, Colombia, Jordan, Vancouver and Mumbai, which Minister for Foreign Affairs Simon Coveney called "important first steps in expanding our global footprint."

However, he added that he wanted Ireland "to go further and to look at expanding our diplomatic and economic footprint across a European Union which will remain, by far, the most important market for Irish goods."

Strong economic growth earned Ireland the nickname of Celtic Tiger during the 1990s, but had to be bailed out after the 2008 financial crisis. The country has only returned to economic growth in the last few years.

The government said the budget was aimed at "balancing the books" while ensuring that the Irish economy, predicted to grow 4.3 percent in 2017, is strong enough to withstand any potential impact from Brexit.

Source: AFP