What are the border and economic implications of May's 'hard Brexit' plans for Ireland?

The UK will leave the Single Market...

Theresa May has unveiled her 12-point plan for a 'hard Brexit' without Single Market membership this morning, she has proposed a "new and equal partnership" between an "independent, self-governing Global Britain" and its friends and allies in the EU.

In her clearest statement yet on Brexit, she declared that she will seek: "Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out."

Fallout

According to Open Europe - a 'free market' think tank - every Brexit scenario results in the Irish economy taking a greater hit than Britain. Its research reports that the 'harder' the terms of the exit, the more damage that will be done to Ireland's finances.

In a worst-case scenario, where the UK is not in a position to negotiate favourable trade terms with the EU, the impact on Ireland could be a permanent loss of 3.1% of GDP by 2030. A separate study by the think tank proposed that the largest contraction in the British economy if it left the EU and failed to negotiate favourable trade agreements would only be 0.8%.

Even the best case scenario for the Irish economy experience a permanent loss of 1.1% of Ireland's total GDP by 2030.

Ms May's current blueprint involves leaving the Single Market and negotiating a bi-lateral trade agreement with the EU - getting market access without paying EU contributions or making border concessions. This is likely to face considerable opposition from EU leaders. 

Anglo Irish relations

While Ireland has a unique economic, cultural and geographical relationship with the UK - we cannot negotiate special bilateral deals.

European leaders have showed little sympathy so far for the UK since the referendum. This stance is set to harden if Britain doubles-down on migration control as it negotiates its exit.

Days after the Brexit vote German Chancellor, Angela Merkel said that Ireland will not be treated any differently to other EU states and that while Ireland will have its input as an EU member it will receive no special treatment.

Harder borders

The British Irish Chamber of Commerce John McGrane joined The Pat Kenny Show today - he stressed the need for as little interference as possible along the 500km border between Northern Ireland and the Republic.

"Northern Ireland is economically fundamentally joined to the Republic of Ireland - and visa versa - we are interchangeably doing business and trading all of the time," he told Newstalk, adding that this uncertainty comes at a time when the six counties are becoming an increasingly attractive location for foreign direct investment.

Given the scale of the border and its 350+ crossing routes - Mr Grane says that a hardening of the border will involve bureaucracy rather than barbwire and that it will create new challenges for those policing the border:

"Borders create differences in price - differences in price create situations where people try and get around that through illicit trade."

He concludes that "tough work" now needs to be done by representatives on both halves of the island to ensure that Brexit causes as little disruption as possible along the border and in Northern Ireland.

Ms May said today that the UK and Ireland will maintain a special relationship and that the UK will try to strike a balance between securing its borders and minimising disruption.

Bending rules

Yesterday an IBEC group representing the food and drink sector wants EU state aid rules to be changed so the government can financially support companies through Brexit.

Food and Drink Industry Ireland says Irish food and drink exports are typically four to six times more exposed to the UK than exports from other EU countries.

FDII Director Paul Kelly said: "The Irish agri-food and drink sector is uniquely exposed. There is a compelling case for exceptional state aid support to minimise the economic fallout and job losses. Already the currency squeeze is putting intense strain on exporters.

"This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystalise. The hardening of EU and UK negotiating positions mean we must plan for a very difficult Brexit process and the high possibility of a divisive outcome."