A leading Irish economist has broken ranks by saying Ireland’s economy would likely fare well enough even if the UK were to vote this summer to leave the EU.
Independent economist Jim Power said the Republic could, in time, benefit from the demands for huge reforms that would be pressed on Brussels, if the UK were to leave.
He acknowledged that there would be dislocation to trade with Britain, but said he believed that any disruption would be short-lived.
“From Ireland’s perspective, while a UK exit would undoubtedly cause short-term risks and uncertainty for Ireland, the longer term implications could actually be very positive for the country,” the economist told the Irish Examiner.
He said that Britain leaving the EU, or a so-called Brexit, was a challenge and risk for Ireland. Many believed the UK electorate would opt to stay in the EU, but that this outcome cannot be taken for granted because of Europe’s migration crisis.
“Many of those pushing to leave are now creating a direct association between migration and the EU. In other words if Britain is to avoid being swamped by migrants it will have to leave the EU,” he said.
Given that the UK is the most important market for indigenous Irish exporters — particularly in the agri-food industry — future trade relations between the UK outside the EU and Ireland within the EU could be damaged, he said.
However, Mr Power said that given the UK is such an important trading partner for EU economies such as France and Germany that it was “inconceivable” the EU would not strike a trade deal with Britain.
The Irish border raised important issues, but the loss of Britain as an ally in Europe over the competitive corporation tax was “the biggest risk for Ireland”.
“The EU needs to reform in a dramatic fashion, and failing such reform, perhaps it would be in the longer term interests of the UK and Ireland to leave the system and build a more sustainable economic model,” he said.
His comments come as the Dublin Chamber of Commerce said a new survey showed over half of professionals here believe a Brexit would be bad for business.
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