Friday 18 August 2017

EBA bid 'can be leverage in Brexit talks'

Ireland's interest in hosting the EBA, which has to be moved from London after Brexit, was flagged by Finance Minister Michael Noonan last autumn. Photo: iStock
Ireland's interest in hosting the EBA, which has to be moved from London after Brexit, was flagged by Finance Minister Michael Noonan last autumn. Photo: iStock

Colm Kelpie Brexit Correspondent

Officials have flagged the potential to use a bid to be the home of the European Banking Authority as a bargaining chip in Brexit talks, the Irish Independent has learned.

The move suggests authorities here could be willing to give up the prize for concessions elsewhere in Brexit talks, though how that could work is unclear.

The Government's bid for the EBA affords the State flexibility in the Brexit negotiations, the Department of Finance has said in notes seen by the Irish Independent.

A senior source familiar with the bid process insisted the State's bid to host the EBA is genuine, but also that securing the agency for Ireland would not, in itself, be a big enough win to trade for something else in the national interest.

"I don't see how it can be used on a chessboard like that," the source added.

Ireland's interest in hosting the EBA, which has to be moved from London after Brexit, was flagged by Finance Minister Michael Noonan last autumn. Formal bid documents are expected to be finalised within weeks.

The minutes of a meeting of senior officials in the department noted the benefits to Ireland of hosting the agency, including as a signal to the global financial sector of the importance that Ireland places on financial services.

But the minutes also state: "In addition, a formal bid for the EBA would afford the State flexibility in the Brexit negotiations."

The view was contained in a paper presented at the meeting of the Executive Board of the Department of Finance in March. It was prepared by officials within the department who have expertise in European banking legislation and have frequent dealings with the EBA.

It is understood the thinking behind the statement is that if Ireland was being seriously considered as a location for the body, it could potentially be put on the table to give the Government extra leverage in the formal Brexit negotiation process.

Read more: Brexit sees Nama housing site sale called into question

But the idea has not been fleshed out beyond that, as the negotiations have yet to begin, and the department said the statement in the minutes has not been adopted as formal Government thinking.

It isn't clear what degree of flexibility the officials believe winning the agency, which employs 159 staff, would provide to the Government as it fights to ensure weighty issues such as the Border, the threat of customs controls and potential disruption to trade flows are robustly addressed in the talks process.

The Executive Board of the Department of Finance is made up of senior officials including secretary general Derek Moran, second secretary general Ann Nolan, assistant secretary general in the financial services division Aidan Carrigan, chief economist John McCarthy and Paul Ryan, who leads the department's international finance division.

It is unclear if the Executive Board shared the view about the bid presenting the Government with flexibility, but it was agreed that a memo was to be prepared for Government setting out the progress in the bid.

The minutes, which have been published by the Department, were signed off by Mr Moran.

The minutes also state that the feedback from the European Commission and the EBA has been positive with regard to Ireland hosting the agency.

Meanwhile, the EU has ruled out Brexit talks being held in secret, in a rebuff to British appeals to keep positions confidential.

Indo Business

Also in Business