Ibec issues stark Brexit warning for Ireland

A new report says our trade with the UK could take a 20% hit...

IBEC, Brexit, Ireland, benefits, upside, currency, trade, EU, referendum, Danny McCoy

The British Union Jack flies alongside the Irish Tricolour in front of Government Buildings on the day of Queen Elizabeth II's visit in 2011 | Image: RollingNews.ie

Ibec has warned that Brexit would be "a blow to the Irish recovery" in a new report that looks at the myriad ways our economy could be adversely effected if Britain votes to leave the European Union on June 23rd.

The employers lobby group posited a "worst case scenario" where trade flows between Ireland and the UK could fall be 20%.

Industries with a high proportion of exports to the UK, such as the food sector, would be hit the hardest. The years of uncertainty as the UK negotiates a new deal with the EU would mean higher costs for business, new customs procedures and regulatory divergence.

Ibec also forecast that our all-island economy would be undermined.

Despite trade with Northern Ireland being less important than in the past, Brexit would "remove a shared economic, political and legal backdrop and could set back positive political and economic developments of recent years".

While our all-island electricity market should be fine, Ibec argued that there could be an impact on where stocks of liquid fuels are stored for security of supply reasons.

The sterling-euro exchange rate could weaken by another 10-15%, making Irish firms selling into the UK market less competitive.

While Ibec had previously stated that Ireland, and particularly Dublin could benefit from businesses relocating across the Irish Sea to avail of the EU market, it concluded that "on balance the risks outweight any possible advantages".

Ibec Director of EU and International Affairs Pat Ivory said:

"Business is deeply concerned at recent polls that suggest the British vote on EU membership is too close to call.

"The size and economic scale of the UK means the stakes are very high, not just for the UK but for Ireland and the rest of Europe. The UK's EU membership is of key strategic importance to Ireland and Irish business.

"A UK departure would be a blow to the Irish recovery and result in a protracted period of uncertainty for business.

"It would undermine Europe's ability to act collectively and decisively in the world and could push the EU back into a dangerous period of crisis management.

"The UK and Ireland have been close allies in Europe across a wide range of areas. An EU without the UK would be a lesser Union".

Danny McCoy, CEO of Ibec, recently told Newstalk Breakfast that the Brexit vote is "by far the biggest danger" that the Irish economy faces, and added that the potential impact of the UK leaving the EU is "unquantifiable".