Sunday 26 June 2016

UK's loss could be Ireland's gain as IDA looks to reap the benefits of a Brexit

Published 10/03/2016 | 02:30

IDA Ireland chief executive Martin Shanahan
IDA Ireland chief executive Martin Shanahan

The prospect of a UK exit from the EU is causing international investors to look at alternatives to Britain, with Ireland a strong contender, IDA chief executive Martin Shanahan has said.

IDA's conversations with companies have "increased and heightened" because of the uncertainty around a so-called Brexit, Mr Shanahan said, in an interview with the Irish Independent.

"Certainly... I met with some financial services companies, and they are absolutely considering their 'what if' scenarios and if there is a leave vote, and companies have to do something to mitigate against that, some of that investment may come to Ireland," the IDA chief said.

Read more: IDA chief Martin Shanahan interview in full

Asked if the IDA is seeing expressions of interest from companies that would potentially look to Ireland in the event of a Brexit, Mr Shanahan said: "Certainly. We're in discussions with companies about future investments, and Brexit is part of that context, so yeah, absolutely."

Mr Shanahan said the IDA had moved its Europe director from Germany to London in September of last year, but wouldn't say specifically whether it was related to the impending British referendum.

Meanwhile, Britain's finance lobby group, TheCityUK, said all alternatives to Britain's membership of the European Union are second best and risk damaging the competitiveness of the City of London's finance industry. But it said Brexit would not be ruinous for the economy.

In a guide to the consequences of Brexit, TheCityUK said a bespoke financial services agreement between Britain and the EU was feasible, but its content would be uncertain.

Negotiations would take a long time and the bloc could end up treating Britain as a less-regulated "off-shore" centre, the group said.

"We haven't seen anything that gives the UK the same level of influence as membership," TheCityUK chief executive Chris Cummings told Reuters.

If Britain backed Brexit, a two-year negotiation period on exit terms could mitigate some of the initial fallout.

"I don't think we would see a huge movement of jobs immediately, but what would worry me greatly is that foreign direct investment doesn't arrive," Mr Cummings said.

Full Martin Shanahan interview, p5

 

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