Immediate effect is less wealth, which will affect our ability to sell goods and services.

So the British people have voted to leave the European Union.

What are the implications for Irish businesses, and for the farming and rural communities ?

Forecasts that sterling would fall in value and that shares would fall in value have been borne out.

On Friday, the day after the vote, sterling fell by 5% against the euro, the Australian and New Zealand Dollars and the Swiss Franc and by 7.8% against the American dollar.

But what does that mean for us?

It means that the British customer for Irish beef or butter has 5% less wealth than he had last week.

Likewise the British tourist arriving at Rosslare or Dublin or Cork Airports has less euros to spend.

That is likely to mean reduced value of Irish exports and of tourism receipts straight away.

Many of the other effects of Brexit are theoretical and may take time but this one is immediate.

Fall in Share Prices

The second immediate effect is on those of us who have money in shares (including most employees with money tied up in pension funds, much of which is invested in shares).

On the day after the poll the value of Irish shares fell by 7.8%.

The largest falls were seen in companies dependent on the UK market.

The wealth of Irish shareholders has fallen.

Thus the nominal wealth of British shareholders fell.

In euro terms this reduction in wealth is additional to the fall in sterling values.

If you or your pension fund held shares in Barclays Bank, the value of that shareholding has fallen by about a quarter.

The value of shares also fell on the Continent, as investors worried about possible contagion and the weakening of the European Union.

The fall on the French and German exchanges was similar to that in Ireland at between 7 and 8%.

So, the immediate effect for neighbours and ourselves is less wealth, which will affect our ability to sell them goods and services, and therefore affect our ability to grow our economy.

Of course, both currency markets and stock markets can fluctuate and these wealth effects may not be permanent.

There is one further immediate effect of the sterling decline.

Sterling area goods have suddenly become 5% cheaper.

They will be able, both on their own, and in our home market, – and in foreign markets – to compete more aggressively with us and win market share at our expense.

This effect is probably already at work in border areas, where goods in the North have suddenly become more attractive to Southern shoppers.

Effect on Economic Growth

Much of the debate in the UK (particularly on the Remain side) was concerned with the impact of leaving the EU on the growth of the UK economy.

They failed to win the argument.

Sufficient voters did not believe or accept these arguments, or felt that a lower rate of growth was an acceptable price for winning greater independence from “Brussels”.

Uncertainty

The first thing to be said about economic growth is that it does not flourish in a period of uncertainty.

The poll period was such a period of uncertainty.

It is believed that some firms postponed investment decisions until they saw the result.

But now there is an even longer period of uncertainty.

The leave negotiations are likely to be long drawn out and perhaps tetchy.

Several years of “uncertainty” is therefore in the offing, with corresponding delays in investment decisions.

This will likely lead to reduced levels of economic growth in Britain and elsewhere.

Lower National Income

The UK treasury projected a medium term decline of 6% in the level of UK national income following a British exit.

This was highly disputed by the Leave side, but most economists would agree with it.

If the UK economy is producing 6% less income, then it is a less attractive market for exporters, and prices obtained are likely to be reduced (in addition to the sterling effect).

Reduced exports are likely to lead to a lower rate of economic growth here at home, with consequential impact on employment and tax revenue.

Trade

Those analysing trade effects have been working in the dark insofar as there is no hard information on what kind of deal will be done between the EU and Britain.

But we are likely to suffer more than any other country because such a high proportion of our trade is with the UK.

Barriers to this trade will impose costs on business, with no benefit.

Irish agri food exports to the UK amount to about a third of our total exports and are concentrated in the beef, dairy and processed foods sectors (ready meals etc).

For these sectors, in particular, the prospect of disruption of trade with the UK, with introduction of tariff barriers, is potentially serious.

Any Brexit arrangement will have negative consequences for the Irish agri food sector. Even a Free Trade Agreement would result in increased costs for Irish exporters. 

The worst possible outcome for us would arise if Britain were to establish liberal trade agreements with agricultural exporters – such as Brazil or Argentina, who do not (yet) have a trade agreement with the EU.

Trade with the UK will not collapse, but will decline (by how much depends on the deal done).

We would then have to seek markets elsewhere with probable lower prices and higher costs of doing business.

Of the scenarios analysed by Teagasc economists, the worst outcome involved a reduction of the value of Irish agri- food exports of about 8% or €800m.

The most favourable outcome involved a loss in value of €150m or 1.4%.

This analysis did not include the effects of lower income growth in the UK, nor sterling effects.

The beef sector is the most exposed.

In 2014 Ireland accounted for 54 percent (by value) of UK imports of Frozen Beef and close to 70 percent of UK imports of Fresh and Chilled Beef.

Is it all bad news ?

Well, mostly.

The only possible “positive” in trade could arise in the lamb sector.

Close to 90% of UK lamb exports are shipped to EU markets. France alone took 50% of British exports in 2014. 

If UK exporters of lamb faced increased barriers to trade, there would be reduced competition for Irish lamb exports on the French and other continental EU markets.

The Brexit story will run and run.

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