We are facing into a new economic war but let's keep calm and carry on
Published 28/06/2016 | 02:30
In the wake of Brexit, the Irish government has adopted a very British motto: 'Keep Calm and Carry On'.
'Keep Calm and Carry On' was a motivational poster first produced in 1939 by the British government to boost the morale of its citizens as Britain prepared for the Second World War.
The phrase - now making a killing for private companies who hawk its stoic message on mugs and t-shirts - is routinely, if incorrectly, attributed to Winston Churchill.
They weren't Churchill's words, but they captured his spirit and yesterday it was Finance Minister Michael Noonan who invoked his inner Churchill when he appealed for calm.
"From an Irish point of view, the initial shock has been contained," said Noonan, who at times sounded as convinced as international markets that there is no risk of further, deeper contagion from Brexit.
As Mr Noonan and his British counterpart George Osborne appealed for calm, European markets sank in a sea of uncertainty created by the UK's existential decision to leave the European Union.
London's FTSE index was down 2.55pc, while Germany's Dax Index sank some 3pc.
The pound tumbled to a 31-year low against the dollar as Dublin saw some of the biggest falls, with shares on the ISEQ index closing down by almost 10pc.
Almost €640m has been wiped off the paper value of the State's stakes in Bank of Ireland and Permanent TSB since last Thursday.
Even stock superstars such as Ryanair saw its shares crash over 15pc after Easyjet warned that Brexit would affect its business.
Not all companies shared the same misfortune as the banks, housebuilders and airlines, with some companies - including Guinness owner Diageo - sidestepping the onslaught.
Analysts at HSBC even said there could be a silver lining for some European and UK-based companies.
This was a sentiment shared by the IDA's Martin Shanahan who was cautiously optimistic that Ireland could exploit some potential upsides from Brexit.
Citing Ireland's strong offering in areas such as finance and pharma, Shanahan said that Ireland's certain access to the EU market would be attractive to investors.
It is certainly proving attractive to the UK's magic circle law firms who are rushing to secure practising certificates here in order to be able to practise (without any constraints on privilege) in the EU.
And we could witness a tech boost if companies such as Apple or Amazon shift more jobs here if the UK's immigration rules become too difficult.
The much vaunted FDI surge may be overstated.
But even winning a small proportion of the UK's annual €35bn FDI (compared with our €5bn) could help militate against the worst possible effects of Brexit.
We have to be prepared for the best as well as the worst, including the unthinkable reintroduction of border controls.
I didn't always agree with the measures. But during the darkest days of the recession, the Government moved swiftly to introduce legal and other emergency initiatives to address the crisis.
Now we must be as agile to respond to the initial impact and aftershocks of Brexit.
If firms including banks and other financial institutions are relocating to Ireland - the State has drawn up a 'hitlist' - that will lead to additional pressures to secure commercial property.
And if we are to have any hope of competing with Luxembourg, Frankfurt or Paris, we have to draw up solutions to address our dysfunctional housing market.
We are facing into a new economic war, one not of our own making. There may be some upsides to Brexit and markets will ultimately settle down. But navigating Brexit is a task that will require extraordinary skills of negotiation - and calm.