Politically, socially and economically the decision of the UK to leave the European Union will have huge ramifications for Ireland.
The most immediate impact will be felt by Irish businesses and their employees. With Sterling falling rapidly against the euro it is safe to assume sterling will remain very weak for a considerable period. That will make Irish exports to the UK more expensive and our imports from Britain cheaper.
This will hit some industries more than others. However, farming and agri-food exports are particularly exposed. The UK is absolutely vital for our agricultural produce because 52% of Irish beef goes to the UK, 60% of cheese exports and 84% of poultry.
Border towns will be hit by the fall in sterling because shopping will be much cheaper in the north of Ireland.
Ibec, the lobby group for Irish businesses, said a Brexit vote will cause years of uncertainty between Irish and UK enterprise while a new deal between Britain and the EU is being brokered. The deal could take up to two years to negotiate after Article 50 is activated and exit negotiations begin. In January, Taoiseach Enda Kenny said the border controls between Ireland and Northern Ireland could be brought back into effect if the UK votes to leave the EU. USI warned that border controls could reverse or alter the Common Trade Area agreement.
The Union of Students in Ireland said Britain leaving the EU will negatively affect new graduates and emphasized that the factors influencing the decision to leave were racism, selfishness, intolerance and fear-mongering. The UK is the most popular destination for Irish graduates to emigrate – one in twelve Irish graduates pursue work opportunities in the UK, and USI said Brexit will affect these graduates, and students who want to do undergraduates, postgraduates or the Erasmus programme in the UK.
The only benefit for Ireland is that some foreign investment earmarked for the UK may now come to Ireland. This could take the form of financial services companies relocating to Ireland. But it could also see more investment in Irish commercial property originally intended for the UK. Even during the referendum campaign NAMA noticed some investment earmarked for the UK being spent on commercial property in Ireland.
There are many uncertainties which Brexit will bring. We will have to see in the days and months ahead how this plays out, but the extraordinary overnight news from our nearest neighbour will dominate all debate on the economy in the months ahead.
These are the benefits of Brexit, however, most believe the negatives far outweigh the positives.
