Cost of Britain exiting EU 'impossible to quantify' says NTMA
Published 20/11/2015 | 02:30
The impact on the Irish economy of a UK exit from the EU is impossible to quantify, the chief economist at the State's debt management agency has said.
Rossa White of the National Treasury Management Agency (NTMA), inset, identified trade and border issues as being the main areas of concern in the event that Britain withdraws from the European Union.
However he said he sees opportunities for Ireland in terms of foreign direct investment and financial services.
While Ireland's international financial services hub is "heavily involved" in treasury, fund activities and other back office activities, he said there may be front-office opportunities.
A report published by the NTMA in June on the potential impact found that whatever the deal put in place, it is likely that Irish trade will suffer, especially the agri-food sector. It said the energy market may be affected negatively while FDI into Ireland and the financial services sector might see some positive knock-on effect.
But it said the economic impact of a British exit would be largely determined by the nature of the withdrawal agreement between the EU and UK.
London-based think tank Open Europe has estimated that "in a worst case scenario" Ireland could see a permanent loss of 3.1pc to GDP by 2030.
And even in a best case scenarios, the loss would likely be around 1.1pc. A report from the Economic and Social Research Institute (ESRI), published earlier this month, said a potential British withdrawal from the EU is likely to "significantly reduce" bilateral trade between the UK and Ireland by at least a fifth.
European Commission President Jean-Claude Juncker said on Wednesday that a so-called "Brexit" would not happen.
He said the EU would have to review its framework to allow some countries to do everything together and others to be less involved.
His comments came as London and its European partners thrash out reforms Britain wants in the EU.
They mark a clear departure from the line of the previous EU executive, led by Jose Manuel Barroso, in which the latter opposed allowing a split within the EU and creating core and non-core EU countries - a two-speed Europe. (Additional reporting Bloomberg)