Cross-border deal-making has slowed ahead of UK vote - EY
Published 06/06/2016 | 02:30
Ireland has suffered a slow-down in the pace of cross-border deal-making, ahead of this month's UK referendum on whether the country will leave the European Union, according to one of the country's most senior corporate advisors.
"We've seen a slowing down in transaction activity, particularly in international transactions. I think that's driven by people really wanting to know what's happening," Mike McKerr, managing partner of EY Ireland, told the Irish Independent.
While many business and political leaders here are concerned about the fall-out if Britain votes to leave, the EY chief said any result will help revive activity.
"Whether it's in or out, the removal of uncertainty will be a good thing," he said.
Financial services firm EY Ireland was formerly known as Ernst & Young.
The EY Ireland chief told the Irish Independent that he does not believe border controls will be re-established between the Republic and the North, even if the UK does vote to leave the EU.
"Clearly from an all-island point of view, there has been a really free movement of goods, services, people, north and south. Regardless of which way the vote goes, you have to hope that common sense will prevail and we won't be putting a border in place," he said.
Volatility in currency markets has increased dramatically as the vote approaches, making it harder for exports to price sales.
With less than three weeks to go, big global investors including Pimco and BlueBay Asset Management are increasingly betting on pound declines as the best hedge against a Brexit scenario.
Canada-owned investment giant BlueBay said it has increased its so- called short-sterling positions - meaning it thinks the pound will weaken - following recent strength in the currency, portfolio manager Mark Dowding said in an interview with the Bloomberg news service.
Money markets are underestimating the risk of a UK exit, because there is a view that voters will come to their senses and favour remaining in the EU, he said.
But BlueBay has moved to hedge the risks of a Brexit, including in currency markets, because that common view is not reflected in opinion polls, he said.
Yesterday, Denmark followed Ireland by ruling out the possibility it will quit the EU, if Britain leaves.
Like Ireland, Denmark is a major agricultural and food supplier to the UK and all three countries joined the then-EEC together in 1973.
Danish Prime Minister Lars Loekke Rasmussen said his country "will always belong inside the European Union", no matter what the outcome of Britain's June 23 vote.
"I'm not blind to the fact that the EU makes mistakes," Rasmussen said according to the text of a speech delivered on Sunday. "Decision-making can be too slow and there's too much, or the wrong kind of, regulation.
"None of this prompts me to ask whether Denmark belongs in the EU. We do. Now and in the future."
The Danish premier also said a British decision to remain in the EU "can become a motor to drive needed reforms" in the bloc.
These ought to include ensuring that the EU "focuses on the most important things and stays out of far more" policy areas, he said.