06 November 2017

Financial Times: Dublin calls for 5-year Brexit transition period

Ireland has called for a transition period of up to five years after the UK leaves the EU in March 2019, in a sign of Dublin’s mounting concern that it will suffer collateral damage from Brexit.

Simon Coveney, Irish foreign minister, also told the Financial Times in an interview that it was “not realistic” to agree a fully fledged UK-EU free-trade deal next year, even though Theresa May, Britain’s prime minister, has set out just such a goal.

Mr Coveney said that an outcome “that is good for the British economy and Irish economy and the EU economy . . . requires a sensible and pragmatic approach towards a transition arrangement. For me, that’s closer to four or five years rather than two”.

[...]“We should not be setting transition periods to meet some kind of political electoral cycle,” Mr Coveney said. “The businesses that are going to have to survive through that transition will also need time.”

UK business groups have called for a transition regime to be agreed as a matter of urgency, and to be put in place by the end of March next year.

“Brexit is not something we should be playing a game of chicken on in terms of making unrealistic demands,” Mr Coveney added. “It’s a much worse outcome for Britain and Ireland than for everybody else if there’s no deal.” [...]

Dublin’s position is particularly important because of its deep ties with the UK, including €65bn of trade a year, as well as Ireland’s role in the current talks. Both the EU and the UK say that Brexit must not undermine the 1998 Good Friday peace agreement and avoid a return to a hard border between the Republic and Northern Ireland.

Mr Coveney said that both sides needed to stop any political posturing, but added: “The onus is really on Britain to make the necessary progress.”

He called for more clarity on the Irish border and the financial settlement, although he suggested that the logjam over the Brexit bill could be overcome “without perhaps naming an actual figure”.  Despite a lack of concrete proposals concerning the border, few EU diplomats think Ireland will seek to stop the Brexit talks from moving to a second phase, precisely because Dublin has so much to lose in the case of no deal or a hard Brexit.

Mr Coveney said that Ireland would probably be Britain’s “closest friend” in the EU during trade talks with Brussels.

But he said that London had still not provided “a credible road map” to avoid border checks after Brexit.

He argued that such checks could be avoided if Britain agreed to stay in a customs union with the EU, an option that would require a U-turn by Mrs May’s government. Mr Coveney was speaking in Dublin after meetings in London last week with David Davis, the UK Brexit secretary, and Philip Hammond, chancellor of the exchequer.

“I have not seen any credible argument that suggests that Britain outside of the same customs union as the rest of the EU is better off from a trading or commercial perspective,” he said. [...]

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