Paschal Donohoe warns of ‘very, very demanding’ Brexit phase two

Finance Minister Paschal Donohoe has warned that phase two of the Brexit talks will be “very, very demanding”.

Speaking to the Irish Examiner, Mr Donohoe said the workload involved in the months ahead to ensure a timely conclusion will be “phenomenal”.

“Phase 2 will be very, very demanding. For it to be done across the time of the transitionary period will involve a phenomenal amount of work and negotiation,” he said.

Mr Donohoe said that while the issues in phase two will be far more complex than phase one — which related to Ireland, the divorce bill and the rights of migrants — he insisted that Ireland will not be squeezed down the agenda.

“There are three reasons why we can still hold our political prominence in phase 2,” he said.

“Firstly, a separate stream has been recognised for Ireland when we move to phase 2.

“Secondly, if you look at the language in the agreement, it makes the point that many of the issues relating to the border have to be resolved in relation to the UK/EU trading relationship.

“Finally, it is the role of the Irish Government to assert itself as part of the EU block.

“It would be fairer to say there will be far more issues at play in phase two and that is why I think it will be a phenomenal undertaking.”

Despite the challenges, Mr Donohoe said he felt the British government is capable of delivering a successful conclusion, given how far they moved on various issues during 2017.

“I believe the British government are well capable of working their way through the next few years,” he said.

“I think they have been under-recognised for the progress they have made throughout 2017.

“All the issues on our island, migration and the money, were not getting the prominence we felt they deserved. A year later they have agreed the transitionary period, they have agreed a settlement and we have agreed progress on the border to allow talks to move to phase two.”

Meanwhile, European Commission chief Jean-Claude Juncker has said he believes Brexit will happen and the EU should tackle its looming budget shortfall.

“Don’t believe those who say that it’s not going to happen and that people in the UK have realised their error... I don’t think that’s going to be the case,” Mr Juncker told a Brussels conference.

The EU budget commissioner said the UK’s departure would leave a hole of about €12-13bn. The UK’s exit is set for March 2019.

EU Budget Commissioner Günther Oettinger said the budget gap would have to be closed with 50% spending cuts and 50% fresh money. He suggested a Europe-wide tax on plastic products as a source of extra revenue.

“There will have to be cuts in some major [EU] programmes — some significant cuts,” Mr Oettinger warned.

UK prime minister Theresa May has said Britain will honour its current commitments to the EU budget until 2020.

The commission will publish a proposal in May this year and has urged EU leaders to agree a budget deal by May 2019.

Former UK prime minister Tony Blair is among the prominent voices arguing that Brexit can still be reversed, possibly by holding a new referendum on whatever deal is reached on the UK withdrawal.