British exit from the EU: Threat creating competitive risk

The importance of a strong and stable government in Ireland is heightened by the increasingly real prospect that the people of the UK will choose to leave the EU in a referendum next June.

Already in Britain, the run-up to the referendum has increased economic and operational uncertainty there and the result may also give rise to further political uncertainty regarding Scottish independence.

A few short months ago, the prospect of the UK leaving the EU was considered to be a remote one. Nobody in either Britain, Ireland, or other EU states thought that it could seriously happen. That is no longer the case. The latest polls show that the vote will be very close. Employers’ group Ibec has warned of uncertainty in the coming months which could potentially impact on the recovery in growth here. A so-called Brexit is the biggest threat Ibec identifies for the Irish economy in its latest quarterly economic outlook. This threat is already creating a major competitiveness risk for Irish exporters into the UK, according to Ibec.

The reason is that, each week, there is €1bn in trade between the countries, supporting about 400,000 jobs. Britain is the biggest market for Irish agriculture but Ireland is, in return, the biggest single market for Britain’s food exports.

Despite our growing recovery, we remain vulnerable to matters beyond our control. We must prepare for the worst.