Irish firms losing faith in Brexit deal

Irish firms losing faith in Brexit deal

By Geoff Percival

The number of domestic-focused companies seeing higher levels of business activity has risen above that of export-orientated companies for the first time since 2012, as Brexit uncertainty tightens.

A survey of 400 Irish firms, conducted by accounting and tax giant BDO, shows that while businesses here are more optimistic than they have been for seven years, as many as 88% believe the UK and the EU will not reach a Brexit deal by next month’s deadline.

“Brexit is having a real impact on Irish business,” said BDO Customs and International Trade Services partner Carol Lynch.

“The majority of Irish businesses do not believe the EU will reach a Brexit deal on time, this is understandable given the amount of work that is still to be done.

“It’s also prescient taking into account Donald Tusk’s comments from Salzburg requiring clear progress on the backstop in order to continue talks, mean we are left with a short window of less than 20 days to secure results.

“We are now close to the wire with a high risk of a no-deal Brexit happening by default. Therefore it’s become vital that businesses continue to prepare for Brexit or immediately start if they have not done so,” she said.

Meanwhile, Fine Gael MEP Brian Hayes has welcomed ECB president Mario Draghi’s claim at a European Parliament committee that Ireland will not be left alone to cope with the consequences of a hard Brexit.

“President Draghi gave a very clear view that he doesn’t believe that Ireland would be left alone to cope with the negative consequences of a hard Brexit. He said that one of the fundamental values of the EU is solidarity and, therefore, it seems unlikely that Ireland would have to suffer the fallout of a hard Brexit alone,” said Mr Hayes.

“Various studies have shown that Ireland will be the member state most affected by a hard Brexit and that our GDP could be hit by up to 3%.

“Having EU solidarity is an extra buffer that could help Ireland cope with any financial shock of Brexit. However, we still don’t know the extent of the financial shock a hard Brexit may trigger. That is why Ireland needs to be ready to avail of every type of support mechanism to ensure that the growth we have achieved following the financial crisis is not destroyed in one fell swoop,” he said.

“In any case, the government should be absolutely focused on one thing and that is getting progress towards a deal between the EU and the UK. It is in our national interest that a deal is reached but as part of that we need a legally operable backstop,” Mr Hayes said.

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