Ireland faces heavy costs for Britain’s Brexit folly

IRELAND FACES HEAVY COSTS FOR BRITAIN’S BREXIT FOLLY.

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By John Palmer

 

In the complex and sometimes arcane debate about the British government’s Brexit crusade, little attention has been paid to the consequences it will have for our neighbouring island, Ireland. In government circles there appears to date to be only limited awareness of the future implications the UK’s departure from the EU could have on future Anglo-Irish relations.

I learned more about what experts in Ireland call the asymmetric shocks to the whole island being generated by Brexit at a very well attended conference organised this month by the Irish Institute for International and European Affairs in Dublin. Downing Street would be advised to ensure a far better understanding of what the future may hold for Ireland before the EU “divorce settlement” is finalised.

To get an idea of the mood across the Irish Sea it is useful to cite part of the introduction to an IIEA paper “BREXIT: A Status Report” for the conference written by the institute’s chairman, Brendan Halligan:

The economic difficulty (for Ireland) clearly depends on the new relationship to be thrashed out between Europe and Britain but, in the worst case scenario, whereby free trade is replaced by customs barriers, the shock would be severe. The political effects would be no less so if the free movement of peoples between the Republic and Northern Ireland were to be impeded by border controls.

Only on the basis of what the British government has indicated is its primary objective in ‘taking back control’ of its affairs it can be assumed that the re-imposition of border controls is inevitable. That would reverse the entire thrust of Anglo-Irish relations since a bi-lateral free trade area was agreed half a century ago and since both countries embarked on the common stewardship of Northern Ireland some years later.”

Quite apart from the potentially crippling impact of trade barriers facing Irish exporters into their traditionally largest UK markets, some account must also be taken of the negative impact of Brexit on the EU budget and hence on the flow of funds to the Irish economy. As serious as the long term economic impact of the UK’s departure from the EU threatens to be, it may be another decade, during which some transitional arrangements may have to be negotiated, before the full effects are felt. That is bad news for the Irish government’s drive to attract more foreign investment.

Of course not all the consequences of BREXIT will be negative. It is already evident that a not insignificant number of international companies – notably in the financial sector – are already looking at relocation to Ireland. The revival of the construction boom in central Dublin very much points in this direction.

But welcome as these developments may be, the overall impact on the Irish economy looks very likely to accentuate an existing internal economic disequilibrium. Indeed the precipitate decline which has already taken place in the international value of sterling is placing daunting barriers to existing Irish export trade with Britain.

The most immediate and potentially lethal challenge from BREXIT for both Dublin and London is, however, political: a possible de-stabilising impact on the political settlement which underpins peace in Northern Ireland. If that was not already so grave – the recent collapse of the devolved Northern Ireland bi-partisan government in Stormont and the political vacuum which now looms – would have been serious enough.

An impressive overall majority of the people of Northern Ireland – Catholic and Protestant – voted to remain in the European Union. In common with the vast majority of Scottish opinion, many in the north of Ireland resent being taken out of the EU in violation of their democratically expressed desire.

What then will be the likely response of politicians and public opinion in the months and years ahead as the BREXIT process unfolds? To judge by what was said at the IIEA conference in Dublin, there is a great desire to ensure that Ireland strengthens and not weakens its ties with the remaining 27 Member States of the EU and also with the European Union institutions notably the European Commission and the European Parliament.

It is also clear that the Irish government is determined to further expand its already extensive relationship and solidarity with not only the Scottish government but also the Welsh government. This may provide Dublin with allies in its quest to explore some possible “special EU status” for Northern Ireland if BREXIT happens.

Another development which London may not fully understand, is that not only this Irish government but almost any likely alternative will now seek to strengthen the role of an “All Ireland” joint Irish/British authority. This will be designed to meet not only common north/south economic challenges but also to avert any development which might undermine peace in the north of Ireland. In that sense BREXIT may, unwittingly, have brought the prospect of a future united Ireland somewhat closer.

 

John Palmer was the European Editor of The Guardian and then Founder and Political Director of the European Policy Centre. He is a Visiting Practitioner Fellow at Sussex University’s European Institute and a member of the Council of the Federal Trust in London.