Brexit fears linger at Kilkenomics

Cormac Lucey, one of several intriguing speakers during the recent Kilkenomics Festival

Cormac Lucey, one of several intriguing speakers during the recent Kilkenomics Festival

It may read as contradictory, but several leading economists believe the Irish Government must toughen its approach to ensure Britain receives a soft ‘Brexit’ from the European Union.

Those whom we listened to avidly during the recent Kilkenomics Festival believe Ireland stands to lose badly should Brussels decide to make an example of our neighbours during the tense, complicated negotiations which lie ahead.

Fears over Brexit in the Republic are proving difficult to shake off given that it remains “great unknown territory”, given that we’ve never ever been in such a position before in the context of the European project.
The British Government has suggested it does not wish to see a hard border returning between North and South, but ultimately it may not be the gift of either jurisdiction to prevent it returning given that we will soon be dealing with a border between the EU Member State and a non-member state.

Will trader to the UK slow down? Will tariff costs increase on Irish food should we head down the worst case scenario route? Will Irish dairy and beef be supplanted on British supermarket shelves by New Zealand butter and South American beef, for example?

On the flip side of the debate, the Good Friday Agreement, the pre-EEC arrangements between both States and the Common Travel Area have been seen as strong cards which Ireland can positively trumpet directly with the London government. But those we listened to at Kilkenomics believe our Government must make its voice more loudly heard than it has up to now.

The case was put that Ireland must support the British case and, if necessary, take a hard line if we’re not getting fair play and, if necessary, to apply a veto if so required.

Consider it in the following terms: the UK is our largest trading partner and accounted for 43 per cent of exports by Irish companies since 2012. Ireland imports 89 per cent of its oil from Britain and 93 per cent of its gas. There’s also a North-South electricity interconnector to bear in mind which, according to The Irish Times, “also reduce energy prices in Ireland because British wholesale electricity prices are lower than here”.



The economics and comedy-fused weekend also suggested that, unlike Ireland, there is little chance that a second referendum on the issue will be held in Britain, save for a snap general election which, as things stand, looks highly unlikely.

A new ‘soft’ European treaty looks necessary to get Britain on side for trading purposes and this, with an Italian referendum and the French presidential election in mind, could deter other Member States from leaving. But the prospect of other countries voting to leave Europe cannot be discounted.

Larry Elliott, the Economics Editor of The Guardian said he had voted to leave, just as he had voted against the UK’s ongoing membership of the EEC back in 1975, just two years after Edward Heath had taken Britain into Europe. This time around, he said he did it on the basis that he was against big capital and the ongoing loss of industry.

Scaremongering had certainly held sway during the referendum campaign, and the outbreaks of racism across the UK were deeply troubling.

Financial Times Associate Editor Wolfgang Munchau questioned what Brexit would mean for NATO and for overall European defence given the strengthening of Russia. A good trade deal with Britain was required and a medium-style Brexit was the best way forward, in his view.

When asked by moderator and comic Colm O’Regan about Irish prospects (given that the theme of the discussion was ‘England’s difficulty is Ireland’s opportunity’), Mr Munchau said Ireland may gain some city jobs but may well lose out in terms of food exports and other goods. Speaking to him afterwards, Mr Munchau said that UK-based commentators hadn’t given too much thought to the Irish dimension on Brexit.

Financial services jobs were likely to head towards Germany, France and Holland and that could not be forgotten, he said. But, in an overall sense, Brexit, it was suggested, would be bad for investment.

Former UCD lecturer and Sunday Times finance writer Cormac Lucey equated the American ‘Rust Belt’ to the North of England and the midlands, areas which voted to leave Europe after 20 years of economic degradation.

He said that we are struggling with the weak pound in terms of exports and jobs and that we should maybe change our country’s game plan and go for an even lower corporate tax than the current 12.5 per cent rate to counter likely British and American moves. He added that the EU stance on Brexit would have to moderate. This point was supported by Wolfgang Munchau.

Another possibility remained, however unlikely as it is at this juncture: that Britain might be offered a good deal to remain in the EU and that a second vote might be held in time. But were this to occur, it was more likely to transpire in the wake of next year’s elections in Germany and France and certainly not beforehand.

All in all, a tougher Irish stance to help deliver a shake-up to the benefit of this State, which means a good deal for Britain, was in our best interest: that was the consensus offered during this excellent, nuanced debate.

But to do so will require more than quiet diplomacy on our behalf – and the question remains if either Enda Kenny or Foreign Affairs Minister Charlie Flanagan are up for such a task.

It’s difficult to avoid the notion that we will emerge as the biggest loser in the event of a ‘Hard Brexit’ so we will need to bat for the ‘old enemy’, however incongruous this may sound to some.

We will also need to improve our connections with Europe in the process and not be as dependent on the UK in the years ahead. And this will mean we must work on improving our language skills and developing a greater knowledge of Europe.

For full story see The Munster Express newspaper or
subscribe to our Electronic edition.

Leave a Comment