Brexit will be 'bad for Ireland' but we will not drift into recession - Taoiseach

Brexit will be 'bad for Ireland' but we will not drift into recession - Taoiseach

Taoiseach Leo Varadkar has claimed Ireland will not drift into recession even if the United Kingdom crashes out of the European Union (EU).

Responding to the warning from the Economic and Social Research Institute (ESRI) which said 80,000 jobs would be at risk were the UK leave without a deal, Mr Varadkar said in any scenario “Brexit will be bad for Ireland.”

He was responding during Leaders' Questions in the Dail.

“The ESRI report published this morning is a reminder of the very stark consequences that Brexit will have for Ireland and the Irish economy,” he said.

The Taoiseach said there is no such thing as a good Brexit for Ireland. “It confirms again that a deal is better than no deal, and a managed no-deal situation would be better than a disorderly no-deal situation,” he said.

Despite the risks, Mr Varadkar said the report also shows that the economy will continue to grow. It will not be as fast as we anticipate it will grow in the event of a deal but it will continue to grow, he said.

“We will not go into recession, at least according to the ESRI. There will continue to be an increase in the number of jobs. There will be more jobs, just not as many extra jobs as we would have in the event of a deal. Incomes will continue to rise, just not as fast as they would rise in the event of a deal. Public finances would deteriorate, but not to the extent that we witnessed ten years ago. We would move from a small surplus into a small deficit,” he said.

Mr Varadkar said we should not underestimate how serious a no-deal Brexit could be for some very vulnerable sectors in our economy, especially the agri-food sector, tourism and small exporters whose only market is the UK.

“That is where we are most exposed and they will need the most support, should we end up in a no-deal scenario in a few weeks,” he said.

The Taoiseach hit out at Lisa Chambers, Fianna Fáil's Brexit spokesperson who refused to rule out or at least refused to answer a question about whether Fianna Fáil thinks we should be preparing for a physical border between Northern Ireland and Ireland.

Fianna Fail leader Micheál Martin questioned the Taoiseach about reports that German Chancellor Angela Merkel and French President Emmanuel Macron sought clarity on the Irish border issue, but the Taoiseach denied pressure was placed on Ireland.

“There were differences of opinion on which dates we should choose but there was no push-back at all against there being an extension and we as 27 stand behind the extensions we agreed last week,” he said.

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