Monday 19 March 2018

Exit talks need 'cool heads and time' says Honohan

Former Central Bank governor Patrick Honohan
Former Central Bank governor Patrick Honohan
Ailish O'Hora

Ailish O'Hora

Former Central Bank governor Patrick Honohan has called for cool heads and a slow negotiation process after Britain's vote to leave the European Union.

The former Trinity College Dublin economist is currently a fellow at the Peterson Institute of International Economics in the US.

He's still best known here for his role in negotiating the EU/IMF bailout in 2010, famously intervening on RTE's 'Morning Ireland' to say a rescue deal was inevitable.

Having seen the EU's decision making aparatus close up during the criss, Mr Honohan said that striking an exit deal with Britain will again test Europe's governance structures.

In an article published on the Peterson Institute's website, he said British people had "been battered by misinformation and prejudice in the referendum campaign".

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Mr Honohan added that it had been difficult to establish from British officialdom what their game plan actually was in the run-up to the "ill-advised" referendum vote.

In relation to options now open to the UK, access to Europe's single market will mean rights for emigrants, he said.

"Their (Britain's) traditional tolerance and moderation may reassert itself to allow acceptance of a less isolationist solution than seems currently in the cards," he said.

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"But that would also require the British government to acknowledge and address the legitimate concerns of those parts of society that have suffered most and feel most threatened by the evolution of the economy in recent times."

Whatever the outcome, Mr Honohan said Britain cannot fully address the irritants that drove the vote, particularly among older Britons, to exit.

"These include dissatisfaction with austerity-induced cutbacks in public services, a sense that policymakers are out of touch and beyond the effective control of the average voter, and the mistaken projection of these concerns onto the European Union and in particular on the visible increase in inward migration seen as driven by EU rules."

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