Thursday 25 May 2017

Ireland is facing a 'serious and imminent threat' from Brexit

Exporting companies needed to evolve into new products, markets and sectors, while maintaining competitive advantage in existing ones. Photo: Bloomberg
Exporting companies needed to evolve into new products, markets and sectors, while maintaining competitive advantage in existing ones. Photo: Bloomberg
Colm Kelpie

Colm Kelpie

Brexit poses a serious and imminent threat to Ireland's economic prosperity, the competitiveness watchdog has warned.

The National Competitiveness Council said the UK's decision to leave the European Union represented a "structural shift" in UK trading relations with the EU.

It warned that short, medium and long-term policy responses would be needed to safeguard Ireland's competitiveness.

Council chairman Professor Peter Clinch said the likely shift in the UK's trading relations with EU partners had far reaching implications for Ireland across a range of policy areas.

"I stated . . .that Ireland faces a serious and imminent threat to its economic security," he said. "The view of the council is that this threat remains, and the UK's decision to leave the EU is the most significant of the factors underpinning this threat."

In a report "placing a microscope" over Ireland's competitive relationship with the UK, the council warned that Ireland should expect the UK to intensify its investment in infrastructure, enhance and develop its tax and non-tax offering for enterprise, develop its skills and innovation base and expand its reach into new and existing markets.

"Ireland cannot afford to stand still," Prof Clinch said.

"We can also expect other countries to continue to enhance their competitiveness positions.

"The challenges posed by Brexit provide urgent impetus to pursue policies that enhance our national competitiveness performance."

The council restated five key areas for Government action including avoiding any narrowing of the tax base and ensuring the tax system supports and rewards employment, enterprise, investment and innovation.

Read more: SME Advice: Firms must innovate and act now to get ready for Brexit

It also warned the State's medium-term competitiveness was being affected by restrictions on State spending on capital investment.

"This will have a negative impact on our competitiveness in the future and damage our potential to secure the benefits of Brexit," it said.

Exporting companies needed to evolve into new products, markets and sectors, while maintaining competitive advantage in existing ones, the council stated, while it said innovation and productivity were critical to enterprise and export competitiveness.

Meanwhile, Taoiseach Enda Kenny has said he expects the final version of the EU's Brexit negotiating guidelines to expand on Ireland's concerns and make further specific reference to the Good Friday Agreement.

Mr Kenny told a Fine Gael public meeting on Brexit in Clane, Co Kildare, that reference to the possibility of Irish reunification, by consent, as set out in the Good Friday Agreement, needs to be referenced in the negotiating guidelines.

"I'm anxious as to the question of what the Good Friday Agreement entails for some future time, that it might become appropriate for people to say 'I want to vote in a different way now, I want to look at my future'. It's just to have that language referenced," he said.

The draft guidelines, which already reference Ireland, are due to be discussed and finalised by heads of government at a meeting in Brussels on April 29.

Mr Kenny said he didn't believe that further problems would arise at the meeting.

"I don't expect any complications with this," he said.

"I might be wrong, as individual leaders might reflect on issues that they want to raise. On the issue of the substance of what's in the document, I don't expect any complications on that."

Irish Independent

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