Brexit supporters ‘are sleepwalking into danger’

The chief executive of the largest Irish company operating in the UK has warned those campaigning for Britain to leave the EU that they are “sleepwalking into a very dangerous place”, adding that a Brexit would be “very, very bad for the Irish, European, and world economies”.

Addressing a Dublin Chamber business briefing on the subject of Brexit yesterday morning, Greencore CEO Patrick Coveney said he expects a Brexit to happen and for it to harm Ireland the most among UK neighbours, while both the euro and sterling will suffer too.

“Britain has been an enormous force for good for some of the developments of the EU that most helped Ireland and most helped the EU. One of them is enlargement and the second is the focus on the single market. This idea of a general move to an ever closer movement is not there — the EU is as close as it is ever going to be. The relationship is becoming much more focused on trade,” he said.

“If Britain wasn’t in the EU today, one of its major trade priorities would be to get in. But that argument hasn’t caught fire. I think there is a very high chance that Britain will vote to leave. Everything I know, factually, tells me we need the UK to stay in.”

Mr Coveney said a Brexit would impact negatively, but not catastrophically on Greencore; but that won’t be the case for firms with euro-centred cost bases.

“If your biggest trading partner goes into an extended period of decline and uncertainty, that is bad for us as a country...We will have to seek to do some kind of bilateral deal with the UK. I’ve no idea what that would involve but we’d have to try and it would be hard. There is no evidence to back the idea that there will be a massive compensating flow of FDI [foreign direct investment] that would have gone to the UK that will now come to Ireland,” he added.

Mr Coveney warned thevote may not be the same as the Scottish independence referendum of two years ago, “where the simple shock value enabled the Scottish people to come back from the precipice”. He added Northern Ireland would be the worst hit area of the UK if Brexit happens.

European stock markets snapped a five-day losing streak, yesterday, that had been caused by jitters over next week’s referendum.

Traders said the likelihood of US interest rates remaining unchanged had also helped to support stock markets, as lower rates reduce investors’ returns on bonds and their appeal compared to stocks.

Meanwhile, sterling also gained ground for the first time in more than a week, rising by as much as half a percent against the dollar after a poll gave the “Remain” camp a marginal lead ahead of next week’s vote.

Opinion surveys in the past week showing a swing towards a vote for Britain to leave the 28-country EU have hit sterling, down 4% in trade-weighted terms since the end of May, and the market’s tone remains shaky.

But a poll for The Sun, which came out in favour of Brexit on Tuesday, yesterday gave the “Remain” camp a one point lead. Betting odds showed a 62% chance of a vote for the UK to stay in the EU, up from 55% on Tuesday.

* Additional reporting Reuters