Department of Finance: 'Hard Brexit' will cost Ireland up to 40,000 jobs in the next ten years

We're heading for the worst case scenario for the Irish economy as the UK goes its own way...

Officials from the Department of Finance have warned the Oireachtas Finance Committee that the UK's decision to cut all ties with the EU will have a drastic impact on the Irish economy.

The Department estimates that the Brexit approached outlined by British PM Theresa May will cause Irish exports to the UK to fall by up to 30% - and 40,000 jobs will be lost during the next decade, The Irish Times reports.

Its models forecast that GDP will shrink by 3.5% during the next five years as a result of the UK's exit strategy - and 4% after ten years.

Mr. Derek Moran, Secretary General of the Department of Finance and chief economist John McCarthy briefed the committee this morning.

This is based on a scenario when the UK leaves the EU’s customs union - the Department's models are guides rather than hard predictions.

Ms May has stated that the UK is prepared to leave the customs union but it is likely to seek some kind of customs agreement with the remaining EU states.

However, the UK is almost certain to face tough negotiations regarding almost all aspects of its exit plans.

If it fails to secure a deal, Irish exports will take a hit as new tariffs are introduced. Ireland will be unable to make a bilateral agreement under EU rules.