The Government is on a direct collision course with Europe over demands to allow Ireland maintain special trading links with Britain in the wake of Brexit.
Following another day of carnage on the stock markets, Taoiseach Enda Kenny was last night at odds with European leaders like Angela Merkel and Francois Hollande over how relations with Britain are to be handled.
Mr Kenny travels to Brussels today to attend a crunch summit meeting of European leaders and Dublin is most unhappy with events in Brussels since Friday.
Mr Kenny slammed the meeting of six founding members of the EEC to discuss the fallout from Brexit, insisting that only the EU Council of 27 leaders can decide the course of action: “I want to make clear that it is the European Council under the leadership of Donald Tusk, and not any other EU institution or subgroup, which has overall political control of the process.”
His defiant stance comes as Finance Minister Michael Noonan and Public Expenditure Minister Paschal Donohoe warned that public spending must now be “responsible” and “even more realistic” post Brexit.
But, despite the turmoil which saw €10bn wiped off the Irish Stock Exchange, Mr Noonan insisted the initial shock of Brexit had been “contained” and there was “no sense of panic”.
Mr Kenny insisted in the Dáil yesterday that there could be “no early change” to the relationship between Ireland and Britain.
However, the European Commission last night said it has no plans in place to accommodate Ireland’s special relationship with Britain in the wake of Brexit.
European Commission vice president Jyrki Katainen said the commission has “no policy” on the providing concessions or establishing a bilateral agreement between Ireland and Britain.
“It’s too early to take any position on this,” he said.
“The commission doesn’t have any policy on this. Basically, in legal terms what we’ll have – there are two different negotiations which are supposed to be started.”
Another EU commission spokesman said that they are still in “speculation territory” when it comes to the reintroduction of a hard border between the Republic of Ireland and the North.
Ms Merkel, Mr Hollande and Italian Prime Minister Matteo Renzi held talks in Berlin yesterday and agreed that there would be no talks on future relations with Britain until after it formally notifies the EU of its plan to leave the bloc.
Ms Merkel said: “We agreed on this, that there will be no informal or formal talks on the exit of Britain until an application has been filed to leave the European Union.”
Meanwhile, Minister for Foreign Affairs Charlie Flanagan has warned a “spike” in passport applications after the Brexit vote could cause delays.
Another €10bn was wiped from the value of Irish shares yesterday — as Irish companies exposed to the UK were among the worst performing stocks in the world. Irish stock losses have now reached €20bn since the UK vote to quit the EU last week.
Big names such as Bank of Ireland, Ryanair, and Paddy Power suffered huge losses.
The market rout came amid new forecasts that sterling will continue its sharp descent against the euro all the way down to 90 pence. That implies huge pressure will be heaped on Irish firms exporting across the Irish Sea into Britain.
Ratings agency S&P downgraded the UK’s credit rating by two notches from AAA.
Last night in London, embattled Labour leader Jeremy Corbyn insisted he was “going nowhere”. He will face a vote of confidence today.
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