Thursday 22 August 2019

Government minister predicts new deal between the EU and UK after a crash-out Brexit in October

Minister Michael D'Arcy
Minister Michael D'Arcy
Kevin Doyle

Kevin Doyle

A NEW deal will be struck between the UK and EU but not until after a crash-out Brexit on October 31, a government minister has predicted.

Minister of State Michael D’Arcy has indicated he sees little room for flexibility on the EU side, meaning Boris Johnson is on course to take the UK out of the Union without a deal.

He said this would cause a severe economic shock that could require EU financial supports for countries including Ireland.

The frankness of his comments to international news agency Reuters are likely to raise eyebrows in the Department of Finance.

Taoiseach Leo Varadkar and Finance Minister Paschal Donohoe have both stressed in recent days that they still believe a breakthrough can be made before the Halloween deadline.

But Mr D’Arcy said: “Some people in the UK have convinced themselves that no deal is a good thing and that there are no circumstances that the European Union would allow the UK to crash out..

"The European Union has...moved the (Brexit) date on a number of occasions. I don't see any more flexibility. The deal will be done after the 31st of October," he said, referring to a deal for Britain's departure from the European Union.

A disorderly Brexit will require Ireland to implement some form of checks on animal and food products crossing the border from the North into the Republic. The introduction of World Trade Organisation tariffs will also cause major problems for businesses and consumers.

Mr D’Arcy said Brexit will have a serious impact on the Irish economy as well as the European continent and that Dublin was now preparing itself.

"Could Brexit go badly wrong? Sure it could," the Wexford TD said.

"Ireland...is the country that will be impacted more than anybody else. Potentially, this could have a huge impact on the Irish economy."

He said that financial support could be needed to buoy Ireland and other EU member countries affected by Brexit.

"It is important to show the solidarity from our European partners to a small nation in a time of difficulty. Financial support...potentially may be required for the continent," he said, adding that how this would happen was yet to be decided.

"Support would be ... on an EU-wide basis rather than an individual country basis. The European budget is close to €270bn per annum. So it would be part of that European budget."

Earlier this year, the European Commission raised the prospect of funds for agriculture, one of the industries in Ireland expected to be worst hit by a disruptive British exit.

"Additional support can be made available in the event of a no-deal scenario," an EU official said, adding there was no scope for renegotiation, as Johnson has demanded, of the divorce deal reached between his predecessor Theresa May and Brussels.

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