Monday 11 December 2017

Hard Brexit could cost Ireland up to 40,000 jobs, Central Bank economist warns

Gabriel Fagan, chief economist of the Central Bank
Gabriel Fagan, chief economist of the Central Bank
Colm Kelpie

Colm Kelpie

The Central Bank’s top economist has said EU countries can’t use lax supervision or regulation as a way of competing for Brexit jobs, but suggested governments can use other sweeteners like taxation.

Gabriel Fagan also told the Seanad Brexit Committee that Ireland stands out as the EU economy most likely to be affected by Brexit.

And he reiterated a warning given earlier this year by the Department of Finance that a hard Brexit could cost Ireland as many as 40,000 jobs.

“Under this scenario, our estimates suggest that after 10 years, GDP would be lower by 3pc and the number of people employed would be 40,000 fewer, compared to a benchmark no-Brexit scenario,” Mr Fagan said.

“This estimate is in line with those of the ESRI and the Department of Finance.”

Mr Fagan said EU regulators are unable to use regulatory advantages to attract companies as supervision is largely harmonised across the EU.

“There is very little scope for any supervisory authority anywhere in Europe to attract business by changing or adopting lax regulation,” Mr Fagan said.

“Regulation now more or less is harmonised across Europe. There are other dimensions by which countries can compete in terms of taxation in particular.

“Countries cannot compete on the basis of supervision or regulation.”

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