08 July 2019

Bloomberg: Facing economic disaster, Irish business stands firm on Brexit

A no-deal Brexit would be an economic catastrophe for Ireland that would crush exporters, business leaders say. Yet they remain prepared to jump off the cliff with Prime Minister Leo Varadkar if he asks them.

Brexit supporters in the U.K. have long argued that economic self-interest will eventually force Varadkar to blink on the issue that’s holding up Brexit -- how to avoid a new border emerging on the island of Ireland. If the EU and Ireland don’t agree to change the existing agreement, known as the backstop, then both contenders to become U.K. prime minister are threatening to crash out of the bloc without a deal.

In Ireland there’s little sign of pressure from business to fold.

“There is remarkable unity among our members,” Simon McKeever, chief executive of the Irish Exporters Association, said in an interview. “I haven’t been approached by anyone asking us to lobby to dilute the backstop.”

Ireland is uniquely vulnerable to the turmoil enveloping its nearest neighbor. Employers’ group IBEC told lawmakers last month a no-deal divorce would be a catastrophe. It could cost 85,000 Irish jobs, and push the economy into recession, the government warns.

The risk of a no-deal is now significant, Foreign Minister Simon Coveney wrote in the Irish Times on Monday, saying it’s time for companies to ramp up preparations.

Varadkar’s administration has managed to build and sustain a consensus around the backstop, which was designed to keep the Irish border invisible but is toxic in the U.K. as opponents say it shackles the country to EU rules forever.

“We’ve heard very few dissenting voices. There’s been a sense from the beginning that we’ve had the upper hand, it’s been 1 against 27 and we were going to win,” said Dermot O’Leary, chief economist at Goodbody Stockbrokers in Dublin. “The danger is that this is a game of chicken, and accidents can happen.” [...]

Full article on Bloomberg

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