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Ireland fears fallout from Brexit 'earthquake'

Tuesday, June 28, 2016 - 08:09
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Ireland is particularly vulnerable as it is on the frontline of any fallout from Britain's "earthquake" vote to leave the European Union, Prime Minister Enda Kenny told a special meeting of parliament on Monday.

[DUBLIN] Ireland is particularly vulnerable as it is on the frontline of any fallout from Britain's "earthquake" vote to leave the European Union, Prime Minister Enda Kenny told a special meeting of parliament on Monday.

The political repercussions of last week's momentous Brexit referendum decision were also underlined as Sinn Fein leader Gerry Adams claimed that Northern Ireland is not bound by the result, because like Scotland its voters backed staying inside the European bloc.

"I think that in other governments there is a full understanding that there has been a political earthquake in the UK, the consequences of which will take some time to work out," Mr Kenny said.

He added that he did not expect an imminent formal withdrawal.

"I expect that there will be broad consensus that we will need to await the entry into office of a new British prime minister before a formal exit notification can be made." Mr Kenny announced the parliamentary recall after an emergency cabinet meeting on Friday following the result of the Brexit poll.

He noted Ireland has more to lose than other EU members from a Brexit but said the government had drawn up contingency plans.

"The stakes have always been higher on this issue for Ireland than for any other EU member state," he said.

He stressed that detailed contingency planning would be "particularly challenging" because there is no clarity as yet on the precise arrangements nor the timescale of the UK's withdrawal.

Also, nobody knows what the new relationship between the UK and the EU will be.

Ireland is notably worried about the prospect of tariffs on the import and export of goods to Britain after it formally leaves the EU as expected.

Ireland considers it crucial that Britain be allowed to remain part of the EU free trade area but this would be decided by the EU as a whole and Ireland would not be able to negotiate separately with Britain.

There is general agreement in Ireland that the Brexit vote will have huge political, social and economic consequences.

Speaking during the parliamentary debate, Sinn Fein head Mr Adams claimed Northern Ireland is not bound by the referendum result and that a majority vote there to remain part of the EU must be respected.

"Some will say we are bound by a so-called United Kingdom vote (but) Sinn Fein says we are not."

"We need to put the island of Ireland first. We stand by the vote of the people of the north."

Although the Republic has diversified its trading links significantly since joining the European Economic Community in 1972, the country's former ruler remains the biggest trading partner in several key export sectors, particularly agriculture.

The immediate impact is already being felt as the British currency has fallen dramatically since Friday.

If sterling's weakness were to continue it would damage Irish exports, with agriculture alone valued at around 800 million euros (S$1.2 billion) a year.

Britain is the destination for 52 per cent of Irish beef, 60 per cent of cheese and 84 per cent of poultry exports. The two countries trade over one billion euros worth of goods and services every week, official data shows.

Almost 200,000 people in Ireland rely on British exports for their livelihoods and Britain is the third biggest investor in Ireland after the United States and Germany.

It is not only goods and services. Britain is Ireland's most important tourism market, with almost three million people from Britain travelling to Ireland in 2013, adding 819 million euros to the economy.

John Comer, president of the Irish Creamery Milk Suppliers Association, one of the country's main farming representative bodies, said the government must move quickly to allay the "huge anxiety" generated among his members following the vote.

"Any tariff regime could combine with a long-term weakened sterling to effectively price Irish food out of our major market," he told AFP.

AFP

For more coverage of the EU referendum, visit bt.sg/BrexiT