From Reykjavik on the Liffey to Canary Wharf on the Liffey. I don't think so!
Published 29/09/2016 | 02:30
With all of the negative sentiment around from Brexit - and the British haven't even left yet - there is some comfort being taken in Ireland from the possible upsides. We could all reassure ourselves from comments by Central Bank governor Philip Lane this week that there have been enquiries from British banks about relocating to Ireland.
NTMA chief executive Conor O'Kelly told Bloomberg TV this week that Ireland may eventually gain from the UK's vote to leave the European Union even if it causes a short-term downturn. "The advantages of Ireland as a destination for foreign direct investment from multinationals are likely to be amplified," Mr O'Kelly said.
News stories about multitudes of British solicitors applying for licences in Ireland might also provide some degree of comfort to businesses people feeling confidence ebb away.
Could Dublin go from being Reykjavik on the Liffey in 2009 to being Canary Wharf on the Liffey by 2020. Well, I don't think so.
All of the indications coming from Theresa May's UK government are that she will opt for a hard Brexit which will involve sacrificing access to the single market in return for control of immigration policy.
That would mean tariffs on Irish exports to the UK, a relatively hard border with the North and a real blow to many indigenous Irish exporting companies.
However, in a double whammy, there has been speculation that the British government might try to do some kind of deal on the EU passporting rights for London banks. This is the facility which allows banks based in the UK to trade freely across the EU.
This would be very good news for the UK but would severely undermine our case for attracting some of these banks to Ireland. If they retained the EU financial services passport, they wouldn't need to leave.
Conor O'Kelly might be right and in the long term Ireland's overall attractiveness for Foreign Direct Investment (FDI) would be enhanced by Brexit, but in this scenario, it just wouldn't apply to financial services.
The first question is why would Theresa May opt for a hard Brexit. Well, the primary motivation behind the Brexit referendum vote was control of borders and immigration policy. It has been made clear that if the UK wants control of EU immigration it will lose the single market.
In fact Downing Street has stated that Ms May's two key objectives were regaining control of Britain's borders and "making sure British firms are able to continue to succeed in the world." The first is very specific. The second is vague.
Why would she want to keep the financial services passporting and try to cut a special deal on it? The answer lies in the importance of the City of London to the entire UK economy.
There are 5,500 financial services companies that passport their services out of the UK and across the EU, according to a study by the 'Financial Times'.
Banks that use the UK as a gateway to Europe in this way employ almost 600,000 people and make profits globally of £50bn (€62bn). How much of that relies on passporting their services to the EU?
It is very difficult to say, because they don't disclose those figures. However, industry experts believe EU passporting makes up 20pc-25pc of the London business of international investment banks, including the five big US players.
The contribution made by the financial services sector to the British exchequer is enormous. Income tax from tens of thousands of highly paid bankers, spending and Corporation Tax are all big contributors to the British exchequer. The other question is why would the EU grant London a special deal on financial services?
All along the EU's position has been, "if you are out, you're out and the sooner you trigger it the better".
The City of London is pretty important for the EU financial services industry and to capital markets for very large (and influential) German and French companies that raise money through London.
There are 8,000 financial services companies that passport into London. The British could argue that anything that involves the loss of passporting, will lead to higher costs, lower liquidity and overall less efficient capital markets.
Anything that puts a very large hole in the side of the City of London might be very bad for corporate Europe, the argument will go.
So what does this mean for Ireland? If the British opt for a hard Brexit but secure a deal on EU passporting for financial services, Ireland will not be able to make a strong case to London banks to relocate here.
At least a hard Brexit would however, as Conor O'Kelly says, amplify the advantages Ireland has in the long term for companies looking for an EU base for their foreign direct investment. A side deal on financial services would reduce that.
A hard Brexit could deliver a serious blow to indigenous exports, especially in sectors like food. Denis Brosnan, former managing director of Kerry Group, was asked about this point last week while launching a new investment strategy for Limerick.
He believes Brexit will be difficult for Irish food companies exporting to the UK. Bigger Irish food operators, with existing operations in the UK, can switch more of their processing to the UK to service that market. That would mean a loss of jobs in Ireland. Smaller exporters might not be able to afford to make large investments in the UK and could simply find they go out of business.
The biggest challenge of all for government agencies and businesses themselves is not knowing how this will eventually play out. The British government is under enormous pressure to delay the exit from the EU and try to seek a deal on transition arrangements that could last many years. That might bring short term stability but no long term certainty.
In the meantime, every solicitor firm, bank and god only knows what, is making enquiries about Ireland.
It doesn't mean they will be coming here. They are being paid to come up with contingency plans, many of which will never be put into practice.
We shouldn't read too much into mid-ranking executives in the UK making enquiries in Ireland so they can do a presentation to their bosses on all of the contingencies they have in place.
There will be many Powerpoint presentations made in London boardrooms in the next two years that will never materialise in reality. IDA Ireland has rightly been quick off the mark, with references in the international press to presentations being made to London bank executives by representatives from Dublin.
But there have also been others from Luxembourg , Paris, Frankfurt and Madrid.
That is not to say that there won't be FDI opportunities for Ireland from Brexit. There will be. But it is very early days.