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Tom Ferris is a Consultant Economist specialising in Better Regulation. He was formerly the Department of Transport’s Senior Economist.

Article 50 of the Lisbon Treaty sets down the steps that have to be taken if a Member State wishes to leave the EU. It is first necessary for a Member State to notify its intentions. Only then will the Union commence negotiations and set about concluding a withdrawal agreement with the country wishing to leave.

Ireland’s Contingency Plans

If the UK is to pursue its exit from the EU, it will take time. In the case of Ireland, it cannot wait around to learn of the detailed outcome of the negotiations between the EU and the UK; it has to plan its strategy over a range of policy areas. To quote the NESC, in a report only a year after Ireland joined the EEC, “… it is not possible to stop the world and let Ireland off”. But, Ireland has started its preparations for the aftermath of an eventual Brexit. Indeed, within 24 hours of last week’s UK referendum result, the Government had adopted a Contingency Framework identifying key policy issues to be managed by Government Departments arising from the referendum vote in the UK to leave the EU. The Contingency Framework is being coordinated by the Department of the Taoiseach. It is based on preparations over many months including inputs by Government Departments to identify the key strategic and sectoral issues arising from the UK disengaging with the EU.

The framework runs to eight pages and can be viewed on the website of the Department of the Taoiseach[i]. As the withdrawal by the UK  from the EU is expected to be negotiated over a period of at least two years, the response in Ireland will require different requirements during the next few years.  The Contingency Framework will track and monitor issues and actions in the time horizon during which they will be active:

  • period immediately following referendum;
  • pre-negotiation period; and
  • period of negotiations.

Obviously this is a working categorisation and in reality some issues can be expected to arise in more than one phase. Also, it is likely that more issues will need to be added as the terms and conditions of the new UK/EU relationship evolve.

 

Table 1 summarises the priority areas to be tackled under the different phases. They include:  UK-EU Negotiations, British-Irish Relations, Northern Ireland, Trade, Investment, North-South Border Impacts, Competitiveness and Macro–economic issues, Research/Innovation funding and Energy.

Table 1: Policy Areas with Immediate Priority, Pre-negotiation Priority and Negotiation Priority
 
Immediate PrioritiesPre-negotiation PrioritiesNegotiation Priorities
  
EconomyEconomyNational Policy priorities
TradeTradeEuropean Union
InvestmentInvestment 
Northern IrelandResearch/innovation 
European UnionEnergy 
British-Irish relationsNorthern Ireland 
Social WelfareCommon Travel Area (CTA) 
Foreign AffairsEuropean Union 
JusticeJustice 
TourismMigration 
 Health 
 Tourism 
 Revenue 
 Social Welfare 
 Bilateral UK-Ireland relations 
 Administrative and resource issues 

Who will do the work?

The press release lists the lead Government Departments that will be responsible for taking the lead in preparing strategies for each of the policy areas outlined in Table 1. A summary of the issues arising in each policy area is also contained in the press release. In addition to Government Departments, ten State organisations have been listed to work on the Contingency Framework. They are the Bord Bia, Central Bank, Enterprise Ireland, Export Trade Council, Failte Ireland, IDA, National Competitiveness Council, NTMA, Science Foundation Ireland, and Tourism Ireland.

There are also a number of existing structures in place that will be used to manage the process on a whole-of-government basis. The Department of the Taoiseach listed a  number of these structures:

  • Cabinet Committee on EU Affairs and the Senior Officials Group that supports it;
  • Joint UK Permanent Secretaries/Irish Secretaries General group and its North-South equivalent;
  • A senior official in every Government Department has already been identified to oversee the Brexit issue.  All Departments will now supplement this arrangement with a Top Management sub-committee specifically dealing with the implications of this development for their area of work;
  • Department of the Taoiseach chairs an Interdepartmental group of senior officials that has been meeting regularly to look specifically at the bilateral and national interests affected by the UK’s withdrawal from the EU. The work of this group will be scaled up and intensified;
  • A wider consultative group of stakeholders chaired by Department of the Taoiseach comprising key business representative groups, ICTU and NGOs has also been meeting for some months. The work of this group will be scaled up and intensified;
  • The Minister for Foreign Affairs and Trade will continue to use the expertise of the Export Trade Council to advise Government on the issue. The expertise of the Council will be focused on the issues arising from the UK’s disengagement from the EU; and
  • The work of the North-South Ministerial Council and the British-Irish Council will become more important as mechanisms to develop the detailed response to the different policy issues emerge.

 

Impact on the Irish Economy

The Government’s Summer Economic Statement was published before the results of the UK Referendum emerged. It had, however, a section on the possible implications of Brexit. Specifically, it stated that

“… estimates made using the ESRI HERMES model suggest that a 1 per cent reduction in UK GDP would reduce Irish GDP by approximately 0.2 per cent, relative to baseline, over two years. This implies a possible fall in Irish GDP relative to baseline in the range of 0.5 to 1.2 per cent based on Treasury and NIESR estimates… it must also be recognised that a UK decision to leave the EU will increase short term uncertainty, and volatility in the financial markets, potentially leading to negative outcomes internationally and in Ireland, beyond those set out above …”.

The Department of Finance is currently carrying out a review of the macroeconomic outlook, which will take account of the outcome of the referendum result. It is important that the results of that review be completed and published at an early stage.

What more should be done?

The Contingency Framework is provides a good start to the work that needs to be done. But it is only a framework. There is a lot of work that needs to be done to tease-out and plan a response to the complex, and in many cases, unwelcome consequences of the UK decision.   Some very constructive suggestions have already been made in the Dail Debate on the UK Referendum. The challenge for Government is to provide a forum that will enable as many relevant organisations as possible to contribute to the development of strategies for the different policy areas that have to respond to Brexit. Relevant organisations would include business and trade organisations, transport and tourism organisations, and organisations who undertake research, provide training and education, and organise seminars and conference. There are many bodies in Ireland that provide some (or all) of the foregoing services, for example the ESRI, the Institute of International and European affairs (IIEA), Institute of Public Administration (IPA), Nevin Economic Research Institute (NERI), Public Affairs Ireland (PAI), TASC, and NESC. Many of these organisations have much to contribute. It is a matter of harnessing the available talent. And it is a far cry from the views of Michael Gove, who expressed the view during the UK Referendum Campaign that “people … have had enough of experts”[ii].

Notes


[i] http://www.merrionstreet.ie/en/News-Room/News/Contingency_Framework_Summary.pdf

[ii] https://next.ft.com/content/3be49734-29cb-11e6-83e4-abc22d5d108c

[i] http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-European-union-and-comments/title-6-final-provisions/137-article-50.html

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