“Assume the worst and plan from there” – what Brexit means for Irish policy

Jim Power was first to take the podium, and he set the tone for the rest of the morning by introducing several thoughts that would be echoed throughout the conference.

“The gift that keeps giving”

He commented that Brexit was “the gift that keeps giving” for economists. This is largely to do with the amount of unknown factors, and the day-to-day unfolding of the unprecedented situation. Indeed, this is a thought that was mirrored in several other comments through the morning.

Speaking broadly, Jim spoke of the effect of the fluctuation in the price of Sterling and how this impacted Ireland. Both this and consumer spending habits in the Republic of Ireland will very much be coloured by Brexit sentiment in the coming years. If Sterling stays weak, he noted, the “spectre of cross-border shopping may rear its head again”.

He thought that the best course of action for Ireland would be to assume the worst case scenario and plan accordingly. In his opinion, if concessions are given too freely to the UK upon their exit, there may be backlash from other EU member states. In his opinion, it will be a case of taking the lesser of the two evils; he closed on the question: “Can we exploit the positives?”

 

“The ball is in, the game is on”

EU Commissioner for Agriculture, Phil Hogan, laid out the roadmap for the Commission, which would be dominated by “five or six months of intensive work on policy” to ensure that Ireland suffers as little as possible from Britain’s departure from the EU.

He reiterated that, moreso than anything else, the future of Brexit is unclear. “Anyone who tells you they know for certain what will happen is not telling you the truth”.

Throughout the morning, due emphasis was paid to the closeness – not only geographically, but historically – of the UK and Ireland. Commissioner Hogan noted that since Irish independence, both Ireland and the UK have either both been in or out of the EU, together. This is the first departure from that. The issue of Northern Ireland is clear. At the end of negotiations, the border with the north would become an external border. He said, it “seems reasonable to suggest that only no Brexit would mean no change to the border”.

However, he is less sceptical than Jim Power of whether or not the UK invoking Article 50 would actually lead to a British departure from the EU. He stressed the need for Ireland to intensify our relationship with the other EU member states.

 

“A good outcome is better than a quick outcome”

Neil Holland, being the key representative from the UK, spoke at length about the considerable attention paid to Ireland’s unique position in talks for a Brexit.

He also countered the early scepticism of whether or not the UK would disentangle itself from the EU.

He had four main points to make. Firstly, the UK is a democracy, and in accordance with the popular vote, they would unequivocally be leaving the EU. Among the few certainties he could outline was that after the two year negotiation period following Article 50’s invoking (no later than March 2017), the parliament will repeal the European Communities Act and replace its provisions with domestic legislation. Secondly, he asked that we be patient, as the job ahead is a big one. They must examine every facet of life in which the EU is involved and restructure it.

Third, no one on either side of the debate wanted to see the last twenty years of progress made through the Peace Process go to waste, and Irish issues would get the attention they deserve. Finally, he noted that they “are not leaving Europe,

[they] are leaving the EU”. They will not, as he said, be “drawing in their horns”.

 

Eamonn Molloy has just been appointed to the Government’s new committee tasked with dealing with Brexit-related matters. The committee is chaired by An Taoiseach.

He outlined the Government priorities: trade, movement within the EU, and Northern Ireland.

Further to points made by Phil Hogan and Neil Holland, Mr Molloy stressed that it is “vital that the developments of the peace process are maintained”. In line with this, there will be an “All-island” Civic Dialogue held on Wednesday 2 November, which will provide an opportunity to hear the voices of those effected by the vote”. From there, policy can begin to take shape. The Department of An Taoiseach are also urging all departments to engage with their stakeholders. He also stressed that any economic upsides would need to be seen across the whole island.

If the economic upside ends at the M50, it’s not a real upside.

While keeping all that in mind, Mr Molloy picked up on Mr Hogan’s idea that we must strengthen ties with other EU nations. When Brexit negotiations begin next year, we will be attending as one of the 27 member states, not as a packaged deal with the UK.

 

 

 

 

After the first panel, the speakers took questions from the floor. No doubt a question that has been on the mind of anyone watching the situation unfold, one attendee asked, “Could we see an unravelling of the EU over the next couple of years?” Neil Holland assured the floor that there was never any intention to damage the EU. Jim Power commented that the EU unravelling would be what he would predict. However, it would be of the utmost importance to watch and see what lessons the EU takes away from the British situation.

 

Dr Vincent Power shed some light on the legalities of the current situation.

“‘Wait and see’ is not an option”

He clarified that invoking Article 50 in and of itself does not mean that the State must leave the EU. It simply signifies the intention to leave. So, while Neil Holland assured the floor that Britain would be departing, sceptics like Jim Power could still be correct in thinking it may never happen, legally.

The majority by which the Leave vote passed was on a par with other nations who have taken a vote, and is therefore not surprising.

However, the EU, he said, was designed like a lobster pot – “easy enough to get in to, impossible to get out of”. Further, “we would be better referring to it as ‘Brexits’,” it will be more akin to a spectrum than to a binary. To Neil Holland’s point that the civil services in both the UK and Ireland would be stretched thin until details could be hammered out, Dr Power called for a permanent enlargement of the civil service to deal with issue both foreseeable at present and those that could arise at any time.

 

Kevin Sherry spoke of the ways that Enterprise Ireland is preparing for, and dealing with, the massive changes that are predicted in the trade sector due to the Leave vote.

“Ireland is in a stronger position now than it was ten years ago”

Currency volatility has been a struggle for SMEs already, and “the long-term implications are unknown at this stage”, like much else. The unpredictability of the Brexit outcome is something felt by Enterprise Ireland’s clients, 47% of whom have not adjusted their forecasts or operations as they felt it was “too early to know” which way the tide flowed.

The main body of work being done at Enterprise Ireland is helping companies diversify geographically. Mr Sherry noted that the companies that suffered the least from the currency volatility were ones whose main export market was not in the UK. This will be a key focus of Enterprise Ireland in the coming years.

EI have been afforded increased funds and resources in order to support Irish companies in the UK, help them broaden their base, and increase their competitiveness.

Mr Sherry also sees opportunities for Irish companies and entrepreneurs in spaces where British participants will no longer be eligible (Horizon 2020 research and funding).

 

 

Blair Horan isolated the issue of the North/South border. He said that “we cannot assume Irish-British free movement would apply”.

Free movement of people is obviously a significant issue. With a hard border between North and South, we would risk setting the Peace Process back years. So then, a hard border could be applied between land masses and not for land-borders. A sort of permit system might apply to those crossing the border. If you crossed for travel/visiting etc, this would be fine; if you wanted to work, then a problem may arise. Such is the case with Italy and the Vatican City. Dr Power noted that this would be legally feasible, but that on this matter “law would follow politics”.

Working on the assumption that if the UK left the Single Market, they would also leave the Customs market, a myriad of problems arise. If no border is enforced between North/South for movement of people, how would the movement of goods be regulated? On the other hand, if they leave the customs market, but remain in the single market, then VAT would be applicable on arrival, causing a hindrance to the import/export market.

His final comment was that, although trade is at the fore for many, these issue would not be discussed during the initial 24 months of negotiations following March 2017. They would be separate negotiations altogether.

 

 

In the meantime, the UK will continue to transpose and enforce EU law, and remain one of the 28 member states. If they fail in their duties at enforcing these laws, the EU Commission can take enforcement action.