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The Road to Brexit

Nov 07, 2016

As part of our work to inform and brief the Chamber Network on Brexit, and what it means for their members, the Chambers Ireland team will be regularly putting together updates on the issues as they evolve. The past seven days have been eventful ones. The All Island Civic Dialogue met for the very first time and the High Court in London published their judgement on Gina Miller’s challenge to the Government’s intention to trigger Article 50 without parliamentary consent.

First of all, last Wednesday (2nd Nov) the Chamber Network was represented at the All Island Civic Dialogue, hosted in the Royal Hospital Kilmainham. The event saw stakeholders from the business community and civil society throughout the entire island meet to discuss what Brexit would mean for both Ireland and Northern Ireland.  The outcome of the dialogue will inform the next phase of the Government’s consultation process with the wider society. Speaking in advance of the event, Chambers Ireland Chief Executive Ian Talbot highlighted that competitiveness had slipped down the agenda, despite the challenges posed by Brexit. Irish companies, in the aftermath of the UK’s exit from the EU, will likely be put under increased pressure to compete with British companies for international markets.

Following the All Island Civic Dialogue, on the 3rd November, the High Court in London put a halt to Prime Minister Theresa May’s plans to trigger Article 50 early next year, where three judges ruled that thePrime Minister could not use the “royal prerogative” to trigger Article 50 to begin the process of exiting the European Union. Instead, cabinet is obliged to put the decision to Parliament, who must then vote on the matter. The ruling will be appealed to the Supreme Court, with a decision expected in the New Year.  While this decision does not change the fact that the UK in all likelihood will leave the UK, it does impact the timeframe under which it will do so. Getting approval from Parliament will be far from a straight-forward process. Although in the immediate aftermath of the court’s decision, both stockmarkets and sterling recovered, the court’s ruling will contribute  to the continued uncertainty over Brexit in the months to come, with businesses struggling to plan for Brexit, given their limited understanding of what it will mean.

Meanwhile, back in Dublin, the ESRI and the Department of Finance today (7th Nov) published a Working Paper “Modelling the Medium to Long Term, Potential Macroeconomic Impact of Brexit on Ireland”, which in its initial findings, holds that a hard Brexit would permanently damage Ireland, reducing the size of the economy by almost 4% and cause a rise of almost 2% in unemployment. In a soft Brexit scenario, where Britain remains part of the European Economic Area as Norway is now, the economy would contract by 2.3% and unemployment would rise by 1.2%.

The politics of “Brexit” is continuing to evolve as the days and weeks go by. Initiatives like the All Island Civic Dialogue are just the start of what will be a long conversation between business, Government and all key stakeholders on the nuances of what the UK leaving the EU will mean both for the economy and the stability and security of this island. The UK exit from the EU is only one part of a much broader set of challenges to the EU economy (migration, terrorism, security risks in Eastern Europe). However studies like the one published today by the ESRI and Department of Finance confirm that Ireland will be badly impacted by Brexit.

Later this week, we will be addressing the Oireachtas Committee on Jobs Enterprise and Innovation on what Brexit will means for jobs and investment in Ireland. As a network, we must make great efforts to communicate the unique challenges facing Ireland as a result of Brexit. Chambers Ireland, through the wider European Chamber Network, will be making this case and articulating our challenges so that we may be recognised as a special case once negotiations for the UK exit from the EU begin.

 

 

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