by GK Strategy 11th April, 2016
3 min read

EU Referendum series: Ireland and Brexit’s Ripple Effects

Just over a week out from the official designations of the lead campaign organisations, both sides of the Referendum campaign are taking advantage of the relative political calm of the parliamentary recess (notwithstanding the Tata Steel crisis and ‘Panama Papers’) to press their respective cases to the electorate. However, as the debate on the EU continues to saturate the airwaves across the UK, it is also worth addressing whether the impact of a potential Brexit would be felt beyond the UK, specifically in Ireland. Reflecting the deeply intertwined history between the Republic of Ireland and the UK, this blog will briefly explore the arguments around the likely outcome for the country of 4 million.

The relationship between the Republic of Ireland and the UK is a special one; something that can hardly be captured within a few lines of a blog but this shared history means that the Irish-UK rapport remains incomparable to the UK’s relationship with any other European country. Indeed the fact that the Republic of Ireland was the only Eurozone economy to receive direct bailout assistance from the UK in 2010, including a direct bilateral loan, illustrates the interdependence of the two economies. At the time, George Osborne said there were “very specific connections between the UK and Ireland which we don’t have with other countries” and that it was “overwhelmingly in Britain’s national interest that we have a stable Irish economy and banking system”. Another facet of this is exhibited in the fact that citizens from the Republic have been afforded the right to vote in June’s Referendum.

Last November, Ireland’s leading think tank, the Economic and Social Research Institute released a report mapping the economic links between Ireland and the UK and scoping out the possible implications of ‘Brexit’ for Ireland. Looking at trade, foreign direct investment, energy and migration, the report warned that a change in the relationship status between the UK and EU could “potentially have far-reaching consequences for Ireland”, reducing, for example, bilateral trade flows by 20 per cent or more. This is especially pertinent as weekly about £775 million moves between the two countries.  Additionally, Ibec, Ireland’s trade association for employers has suggested that a vote that allows British businesses to circumvent EU regulations would give the UK a competitive advantage that would lure some of Ireland’s more lucrative multinational corporations to the other side of the Irish Sea.   To a country only now emerging from a crippling recession such predictions bring with them a dark recollection of 2008.

Days later, the Taoiseach (Irish Prime Minister), Enda Kenny, took to the stage of the Confederation of British Industry’s annual conference, augmenting the economic argument by discussing the implications for security. In one of the first proclamations that leaving the EU could upset the relative peace currently within the UK, he said that EU membership was an enabler of peace in Northern Ireland. A UK outside of the EU would bring with it questions of whether greater border security should once again be implemented. This, incidentally, echoed former US President, Bill Clinton’s warning that Northern Ireland will get “whacked” if voters back ‘Brexit’.

However, this point that does not sit well with those campaigning for the UK to Leave in June. In a recent debate in Belfast between various players on both sides, former Northern Ireland Secretary and Conservative MP Owen Paterson said that claims of a risk to security were “utterly disgraceful”. Eurosceptic Labour MP, Kate Hoey added her weight to this saying that any such argument as to the security implications were “shocking”. This said, one of the ‘gang of six’ Cabinet minister campaigning for an Out vote and Northern Ireland Secretary, Theresa Villiers MP, has been somewhat quite on this particular issue.

Unsurprisingly, mirroring the debate in England, Scotland and Wales, arguments based on the future of those across the Irish Sea are a tug of war with all claims attracting counter claims, creating a cacophony of voices which muddies further the already difficult situation of predicting the ripple effects.

Amidst a sea of uncertainty, there is an ever growing worry amongst Irish citizens that a thrust into the unknown would damage the fragile recovery within the country. As such, a campaign has been launched to try to entice Republic of Irish citizens living throughout Britain to use their vote to ensure that the UK stays in. Based on the ‘ring your granny’ campaign model of last year’s equal marriage Referendum, Irish 4 Europe is asking the estimated 420,000 Irish people residing in the UK to spread the word about the vote and the possible negative consequences for the Irish Republic. While it’s clear that there are substantive implications that will not begin to fully reveal themselves until June 24th, campaigns such as Irish 4 Europe underline that you cannot discuss the relationship between the UK and EU without addressing the Irish question.

GK Strategy can provide an analysis of the implications of a vote to leave as well as weekly monitoring updates on the EU referendum. For more information, please contact helen@gkstrategy.com

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