Whether the UK leaves the EU on the March 29, or there is an extension for a short period, the general consensus is they are going to leave and that there will be a hard Brexit.
A hard Brexit rejects the whole idea of close alignment — the UK will be leaving both the single market and the customs union, basically a clean break.
Does this mean that we won’t be able to fly across the Irish Sea on March 30? I think not.
Whilst certainty is everything and undoubtedly businesses, clients and investors all feel out of control when politicians don’t appear to have the slightest inkling of what is going to happen, I don’t think we have to hit panic stations just yet.
What will be the impact of Brexit on our pensions and investments?
The UK makes up a small proportion of the world market — less than 5% — and I feel it won’t have anything like the effect on our pensions people might think.
The UK stock market and sterling are all under-loved now, as funds have stayed clear of investing there but this shouldn’t cause us any real worry.
Brexit is likely to impact on your finances but it is difficult to say for certain if it will be negative and what will be the impact.
The positive effect of inward investment in Ireland, creating more job opportunities and the effect of Brexit keeping interest rates low, thus keeping our mortgage repayments down, may actually outweigh any downside effects.
However, in the short-term, the lack of certainty is likely to be negative for the vast majority. Longer term though, it might be more than tourists to the UK that benefit in an Irish context.
For many of us, I believe the effect of Brexit may not only be neutral but in fact positive.
You might be wondering how I can be so positive, when there are so many reports of the contrary.
A recent survey of Irish business reported 70% believe a hard Brexit will negatively affect them.
Whilst I do feel some sectors will be hit, such as the farming community, especially if World Trade Organisation (WTO) tariffs of up to 75% are imposed, to what extent it will have on the general population is difficult to determine.
Amid the uncertainty of Brexit, the EU cut its forecasts for eurozone economic growth by a third.
The knock-on effect of this is that this causes interest rates to be kept low. So Brexit may actually have a positive effect on borrowers in Ireland as the UK’s slowdown and the uncertainty means Mario Draghi will find it difficult to normalise interest rates.
Deutsche Bank have forecast that there will be no ECB rate hike until December 2020, which is good news for those of us on tracker and variable rate mortgages, by keeping our monthly repayments down.
A lot of the talk to-date has been about those that trade with the UK and also the effect on sterling. Whilst there is no doubt there is going to be a negative effect on those that trade directly with the UK, especially in the short term, there are solutions.
Temporary passporting should mean business as usual for a lot of firms. It is easy to obtain but the issue is a frighteningly small proportion of firms so far have availed of it.
Sterling’s weakness will be a greater challenge to exporters.
I have spent half my time on either side of the Irish Sea over the last two and a half years, and I have spoken to a lot of English people about the effect on Ireland. The strong opinion they have is that Brexit will be very positive for the Republic.
Just last week, I was in London and heard an address to bankers by a partner in Clifford Chance, one of the largest law firms in the world, reiterating this very point.
To hear the pure frustration of the negative effect they feel Brexit will have on the UK, to the betterment of close neighbours, was very plain to see.
The consensus from a lot of the audience that day, including a lot of the main banking giants, was that Dublin, as the only English-speaking European capital, would continue to benefit hugely from the fall-out of companies relocating operations away from the UK.
Nick Charalambous is the managing director of Alpha Wealth, financial advisors in Cork and Dublin.