Alarm that Brexit path is worsening for Ireland

A ruling by a UK court that insists the British parliament approve the Brexit vote will unlikely delay the final divorce proceedings with the EU, Ireland’s leading independent expert on Brexit has said.

Alarm that Brexit path is worsening for Ireland

But Edgar Morgenroth, associate research professor at the Economic and Social Research Institute (ESRI), and an adviser to the Government, warned the prospects for Ireland striking any sort of favourable deal with the British over Brexit are dimming rapidly.

He urged Dublin instead to bypass London and forge alliances with European countries to insulate the Irish economy from the hardline path being taken by London.

“I do not think we have much influence with the British over the hardness of the Brexit [deal] but we can influence our European partners to help us,” he told the Irish Examiner.

“Theresa May may wish for a soft border but she also wants a hard Brexit. You cannot have both,” he said.

Mr Morgenroth, who is completing a major company-by-company analysis on the Brexit fallout for the Irish economy, said that the food industry here, especially trade in meat, could be badly damaged simply if the British were to strike a unilateral or bilateral deal with a food producer such as Brazil, and have zero tariffs on its food imports.

Sterling jumped above $1.24 yesterday after England’s High Court ruled the government needs parliamentary approval to trigger Brexit.

It rose at one stage by 1.2% to 89.1p against the euro. Bank of England governor Mark Carney cited the ruling as an example of uncertainty that could affect the UK economy.

Sterling rose further to nearly $1.25 after the Bank of England announced it had scrapped its plan to cut interest rates, which it said could now move up or down.

London’s Ftse 100 index of 100 leading shares also fell on the court ruling. The Ftse 100 has high international exposure, with many firms earning dollars and reporting profits in sterling. That can cause shares to fall when the pound rises.

“This decision has increased the uncertainty around the UK’s decision to leave the EU... The Ftse 100 is lower, but this is largely a result of global equity weakness and the Ftse’s inverse correlation with the pound,” Kathleen Brooks, head of research at City Index, said in a note.

“For the UK, uncertainty is good, because the market has convinced itself that Brexit is bad news for the UK’s future economic prospects,” she said.

Mr Morgenroth said that any standoff between the UK parliament and Ms May’s cabinet over the terms of the Brexit talks with the EU could lead to a constitutional crisis in Britain.

“The wisest thing is to assume Brexit will go ahead and plan on that basis,” he said.

Though the court ruling could delay the triggering of Article 50 by Britain, he nonetheless believes that the divorce proceedings will be completed by 2019 because there is no will among EU states to extend the two-year deadline under the Lisbon Treaty for states wanting to quit the union.

“I do not see why there would need to be an extension because the only thing that needs to be discussed is liabilities. The liabilities will potentially be quite acrimonious because the UK owes the EU money and I do not think they will be too happy to pay,” he said.

The UK owes Brussels an estimated £20bn (€22bn), he said.

More in this section

IE_logo_newsletters

Select your favourite newsletters and get the best of Irish Examiner delivered to your inbox

LOTTO RESULTS

Saturday, January 16, 2021

  • 12
  • 17
  • 22
  • 32
  • 38
  • 39
  • 40

Full Lotto draw results »