Wednesday 18 October 2017

How a hard Brexit could cost Ireland 49,000 jobs and €200m a year

  • Ireland's economic output to be reduced, with export companies worst-hit
  • Loss of 49,000 jobs and €200m a year is 'conservative estimate'
  • Brexit already impacting businesses in the export sector
UK Brexit Secretary David Davis began talks with the EU earlier this week, but the British government’s stance may still be a major threat to firms here. Photo: Bloomberg
UK Brexit Secretary David Davis began talks with the EU earlier this week, but the British government’s stance may still be a major threat to firms here. Photo: Bloomberg

Colm Kelpie and John Mulligan

A hard Brexit will cost Ireland €200m a year and deprive us of 49,000 jobs over a decade, a stark assessment from a leading think-tank warns.

The Economic and Social Research Institute (ESRI) said the country's economic output would be reduced, with export companies worst hit.

The ESRI also warned that it was a "conservative estimate" of the damage wrought on Ireland by Britain's decision to leave the EU.

Ireland is expected to be affected by Brexit mainly through the loss of trade with the UK, the ESRI said.

A hard Brexit would cut the wriggle room for public spending, or the so-called "fiscal space", by €600m over three years. It would reduce the number of jobs that could be created in the economy by 49,000 over a decade.

ESRI head of economic analysis Professor Kieran McQuinn said: "You could argue there are other effects that we aren't fully capturing, more micro-related issues".

These include "the impact on supply chains, the impact on consumers if we start to see higher prices in retail outlets here because of the hard Border issue".

He added: "So you could argue, if anything, that the effect we are presenting is a lower bound of what essentially could transpire."

Theresa May and Jeremy Corbyn in the House of Lords yesterday. Picture: PA
Theresa May and Jeremy Corbyn in the House of Lords yesterday. Picture: PA

Brexit is already impacting businesses in the export sector. Goods exports plummeted by almost half-a-billion euro last year, on the back of the Brexit-induced weakness in the pound.

Tourist numbers from Britain to Ireland have also fallen.

But air passenger traffic between Ireland and Britain in 2017 is on course to breach the record of 12.8 million set just last year, despite last June's Brexit vote and a slump in sterling that has hit visitor numbers from the UK.

Competition and the stronger euro have given a boost to Irish flyers heading to Britain, however.

An analysis of traffic by the Irish Independent shows that between January and April this year, slightly more than four million passengers travelled between Ireland and Britain, compared to 3.93 million during the same period of 2016.

If the trend continues, the 12.8 million flyers recorded between Ireland and the UK last year could be exceeded this year.

The Dublin-London city pair remains the busiest for air passenger traffic between Ireland and Britain, and one of the busiest city pairs in the world.

Figures from the UK's Civil Aviation Authority (CAA) show 4.76 million trips were made by passengers between Dublin and five London airports last year. Dublin-Heathrow was the busiest route, followed by Gatwick.

Elsewhere, it has emerged that US banking giant JPMorgan Chase is scouting for additional office space in Dublin but also weighing up property in Amsterdam, according to financial newswire Bloomberg.

America's largest bank may lease or acquire about 9,300 square metres of extra office space in Dublin, two people said, asking not to be identified because the plans are private.

That is enough for about 770 workers, based on typical modern office use.

Irish Independent

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