Brexit may cause 40,000 job losses and €20bn debt hike

As many as 40,000 jobs could be axed, the national debt could rise by €20bn, and food exports could be hit with up to 50% tariffs as a result of a hard Brexit, according to Department of Finance officials, writes Juno McEnroe.

The stark reality of a hard Brexit was revealed to the Oireachtas finance committee where TDs admitted to being surprised by the details of a “worst-case scenario” in the aftermath of British prime minister Theresa May’s confirmation of a hard Brexit.

Department of Finance assistant secretary general John McCarthy outlined the estimates. The department also admitted it only has four full-time staff in Dublin working with Brexit.

Fianna Fáil spokesman on finance Michael McGrath said he was surprised by the detail. “The world has changed for Ireland,” he told department officials.

Economic modelling done by the department and ESRI suggests there will be 40,000 fewer people in employment and a drop of 4% in economic growth over a decade.

Furthermore, the national debt could rise by €20bn. Exports to the UK could fall by 30% and overall by 4% if new punitive tariffs are applied to goods.

Under World Trade Organisation rules, exports of Irish meat to Britain could be subject to a 50% tariff, dairy and eggs a 25% tariff and processed meat a 35% tariff. The department and ESRI assessed tariffs for some 5,000 Irish goods.

Sinn Féin’s Pearse Doherty said he was worried about Ireland’s level of preparedness for Brexit.

“Now we know it is real and in the next couple of weeks, it is going to get very, very intense,” he said.

Officials said a specific Brexit department is necessary.

Mr McGrath said the projections revealed “extremely serious” risks for our economy.

“This will have potentially grave consequences for Ireland in terms of exports to the UK, economic growth, employment, our public finances and the national debt,” he said. “It is also becoming abundantly clear that our own Government does not seem to fully grasp the scale of this challenge.”

But Finance Minister Michael Noonan, speaking in Davos, said Ireland would “get its share” of firms leaving Britain after Brexit, and 100 had inquired so far about relocating here.

This article first appeared in the Irish Examiner..

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