A Brexit would “test the capacity” of the Irish Government, Fianna Fáil’s finance spokesman has warned.
Michael McGrath said a vote this week to leave the European Union would have major political ramifications for Ireland which the already fragile minority Government may not be able to withstand.
It comes after Labour leader Brendan Howlin questioned whether the Government has put robust enough plans in place in the event of a Brexit.
With Britain due to go to the polls on Thursday, Mr McGrath has warned that the Fine Gael-led minority Government may not be able to cope with the implications of a Brexit. He told the Irish Examiner: “If Britain votes to exit the European Union, what will the consequences be for Ireland in the very short term and then over the longer term, when the negotiations go on over a period of two years or so?
“There are huge risks for Ireland. Inevitably, there would be political ramifications here in Ireland, that’s one potential issue that I could see as being of huge significance in Ireland, which would certainly test the capacity of a minority Government. He said it would be “sink or swim” for the Government, adding that a Brexit vote would have “economic and political consequences” here.
“At a minimum there would be massive uncertainty; there would be economic consequences, and I think it would be a defining test for the current Government.”
Yesterday, however, Social Protection Minister Leo Varadkar said the Government is preparing for either outcome in Thursday’s vote.
He said: “It is a matter for British citizens to decide whether or not they want to leave the EU or remain, but it is going to have — or could potentially have — a significant impact on Ireland. Both on Ireland as a country and on Irish citizens living in the UK who are entitled to vote, so we are really hoping that the British people decide to stay in the European Union.
“The Government is making preparations and contingency plans to respond to the result, whatever it is,” Mr Varadkar added.
Although the exact implications of a Brexit are unclear, Mr McGrath said it would cause immediate uncertainty in the markets, and the country would “face the single biggest economic risk that we have faced since the economic crash of 2008”.
“Could the Government withstand that, and deal with that? Possibly so, but I think it would depend on what happened in the immediate aftermath of a Brexit, and the risks for Ireland are huge. It could be very, very dangerous and could test the current Government to its limit.”
Campaigning with the British Labour Party for a remain vote last week, Mr Howlin said: “We certainly have to prepare for other eventualities and I am not sure we have done robust preparation in that regard.”
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