Ireland will have ‘little to fear if UK votes for Brexit’

Ireland has little to fear even if the UK were to vote in little under a month to exit the EU, according to one of the world’s leading credit ratings experts.

Moritz Kraemer, who is chief sovereign rating officer at S&P Global Ratings — the sovereign ratings firm formerly called Standard & Poor’s — said if there were to be a vote for Brexit on June 23 that the exit process would likely be so drawn out there may be little or no impact on the fast- growing Irish economy.

In a wide-ranging interview with the Irish Examiner, Mr Kraemer said negotiations over a potential Brexit would probably not disrupt trade across the Irish Sea, though free movement of labour and other political issues would likely weigh more heavily.

S&P was one of the most positive of the big rating firms on Ireland even at the depth of the economic collapse in 2011. It currently has an A+ rating on the Government’s debt pile.

Its next review of Ireland’s rating is scheduled for June 3, just over two weeks before the UK referendum.

There was, however, no reason for S&P to trigger a downgrade for Ireland, even if the “neighbouring isle” were to lose its AAA rating in the event of it deciding to pull out of the EU.

“I do not think it is our expectation that a Brexit vote per se would change things so much in the second half of this year that the Irish economy would be negatively impacted,” Mr Kraemer said.

Moritz Kraemer

“It may be many months before the UK would be able to put a bargaining position to the EU partners. I would be surprised to see things move so quickly that we would see a material impact on the Irish economy soon.

“The dependence on the UK is not as nearly as big as it used to be. There are special issues around the border, of course, but I do not think they will impact overall,” he said.

“We expect that the ‘Remains’ will win the day, but if ‘Brexit’ were to win it is not going to be a violent divorce. It is going to be a slow and civilised process that will not change too much in the near term. If Brexit were to win, the UK rating would likely go down. We have been categorical on that one.

“But that doesn’t mean that Ireland, just because it is a neighbour, would have the same fate.”

Many governing coalitions suffered in recent European elections but there were no big issues about the formation of a new minority-led government here, though “it remains to be seen how the various parties co-ordinate themselves and keep Ireland on an even keel,” Mr Kraemer said.