10 November 2017

Bloomberg: Brexit dilemma hurtles toward Ireland: to veto or not

Varadkar’s government is considering pushing for guarantees that no border will be reimposed on the island of Ireland as the price for allowing Brexit talks to move ahead, according to two people familiar with the matter.

But Foreign Minister Simon Coveney hinted that Ireland might shy away from holding up talks even if it doesn’t get a firm pledge that the island won’t be divided by what will be the U.K.’s new 310-mile (500-kilometer) land border with the EU.

“The Irish government and Ireland are part of a European negotiating team so talking about individual countries using vetoes or blocking things I don’t think is helpful at this stage,” Coveney told broadcaster RTE on Friday. “What we are is united with the EU taskforce which represents all 27 countries.”

There may be two reasons for this. First, Ireland will likely face pressure not to hold up Brexit talks over the border should the U.K. and European Union reach a preliminary accord on a financial settlement, a European official familiar with the negotiation process said. It’s probably not tenable for Ireland to hold out on the border if all the other countries are satisfied on the bill, the person said.

Second, it’s in the Irish interest to allow talks to move on to trade -- Ireland is the economy most vulnerable to Brexit and ultimately the border question can’t be fully resolved until the shape of the future trading relationship is clear, Varadkar has said. And the longer trade talks are delayed, the greater the chance of a messy no-deal Brexit that would damage Ireland’s economy.

“It will not be possible to resolve the border question fully until we start to speak about the future relationship that the U.K. will have with the European Union,” Varadkar told lawmakers in Dublin this week. “There will come a point when it will be in our interest to start talking about that.”

The Irish question was rammed back onto the agenda this week when an EU document made clear that the bloc has adopted Ireland’s stance on the border almost wholesale. Northern Ireland must operate with the same rules of the customs union and single market as the Republic, it said.

While Ireland backed the EU’s stance, Varadkar set out on Friday a more nuanced proposal, suggesting Northern Ireland could play by the same rules as the Republic of Ireland, even if it left Europe’s customs union as the U.K. intends.

He also pointed to the Isle of Man, which is part of the bloc for customs, excise and sales tax, but outside the EU for all other taxes as a possible model for Northern Ireland. One proposal would be for Northern Ireland to have the same rules as the Republic, and be carved out from future U.K. trade deals, according to a person familiar with the situation.

Underlining how sensitive the issue is, the Democratic Unionist Party, which props up Theresa May at Westminster, quickly moved to kill Varadkar’s idea. The DUP would quit the deal with the U.K. government rather than accept a border between Northern Ireland and the mainland.

“Tying our province to EU rules to placate the Republic of Ireland while the other regions follow a different path would devastate the local economy,” said Nigel Dodds, a leading DUP lawmaker. “Progress will not be achieved through bully-boy tactics.”

Full article on Bloomberg

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