Hard Brexit hits Ireland harder than Britain, warns ESRI

Could deliver a €12 billion economic blow after five years...

Hard Brexit hits Ireland harder than Britain, warns ESRI

Picture by Lauren Hurley PA Wire/PA Images

Ireland would suffer more than Britain if a "hard" Brexit comes to pass, according to a new study.

The joint report compiled by the Economic and Social Research Institute (ESRI) and the Department of Finance found that the level of Irish output is permanently below what it otherwise would have been in the absence of any Brexit.

The study looks at three different scenarios once Article 50 is invoked and warns that the imposition of trade tariffs would increase unemployment here by 2%.

One forecast states that the UK economy could shrink 3.2% over a decade. Using the same methodology, Ireland's economy would be 3.8% smaller.

A hard one could reduce the value of the Irish economy by roughly €12bn after five years, with the country's output shrinking by about 3.5%.

Even a "soft" scenario, with the UK retaining access to the single market and allows free movement of people, would see Irish GDP fall around 2.3% after five years.

These scenarios and figures do not, however, take into account measures the Government could take to mitigate the damage.

Taoiseach Enda Kenny noted today that the report was also based on trade models that the UK might not use, saying that "Britain will want a British solution".

Speaking at the Irish Times Brexit Summit, Kenny said "there is a world beyond and after Brexit of other concerns, challenges and priorities."

He added that both the Irish and UK governments have expressed their views that there should be no return to a hard border in Northern Ireland.