Tuesday 24 April 2018

Merkel is right – there is no need to be nasty to Britain over its ‘divorce’ from the European Union

Germany and Ireland must work together over Brexit, writes Ralf Lissek of the German-Irish Chamber of Industry and Commerce

Germany’s chancellor Angela Merkel is resisting calls for a hard line to be taken towards Britain following its vote to leave the European Union. REUTERS/Hannibal Hanschke
Germany’s chancellor Angela Merkel is resisting calls for a hard line to be taken towards Britain following its vote to leave the European Union. REUTERS/Hannibal Hanschke

Ralf Lissek

The United Kingdom is Ireland's main trading partner, with more than €1.2bn of goods and services traded between the two nations every week. Britain is the destination for over 40pc of exports from indigenous Irish companies.

If the consequences of Britain leaving the EU are not sensibly addressed, the impact on the economy and employment will be profoundly negative across Ireland. There should be no doubt that Ireland is the European country that stands to be worst hit by a British withdrawal, given our close economic, political and societal links.

The Government and the business community here need to be proactive.

At every level, we need to make it clear to the remaining EU countries how intrinsically linked the Irish and British economies are and that Ireland will now suffer unduly if our special circumstances are not understood in all of the EU capitals.

It is also important that we quickly build a consensus on a dedicated national strategy to protect jobs, maintain trade and minimise any problems that may arise regarding the common travel area and the Border between North and South.

Peace has been the bedrock of so much of Ireland's success over the past two decades. This Brexit cannot be allowed to create new barriers and to undermine reconciliation.

Right now, we are in unchartered waters. No country has ever left the European Union per se before and this level of uncertainty is magnified by the fact that the UK is one of Europe's big economies.

We know that the EU articles of agreement mandate that exit negotiations need to be concluded within two years, and this can be extended, but a very lengthy transition could create a vacuum and hamper both trade and investment.

Ireland and Britain have been close partners in the European Union since they both entered the Common Market on the same day in 1973. But Irish companies now have to plan for a new reality, where tariffs, euro-sterling exchange-rate volatility and a changed regulatory and legal environment could all create serious challenges.

For businesses to plot a way forward, it is a case of the sooner, the better in regard to knowing the terms of the UK's future relationship with the EU.

We need to protect the EU, but I am in full agreement with Chancellor Merkel's comments that there is "no need to be nasty" to Britain over its "divorce" terms from the EU. Generosity must be the order of the day.

Inside or outside the EU, a co-operative working relationship between the UK and the rest of Europe is essential to the stability of our shared continent.

Despite the shock of the Brexit, Irish and German companies still have reasons to be optimistic about the future because:

• German-Irish business relations will be further strengthened;

• Ireland's international business profile will be raised; and

• Germany and Ireland are on the same page on Brexit.

With a British exit, Irish businesses will naturally look for an alternative easy, low-cost, no-tariff trading partner. Germany can provide that alternative and the Brexit will mean a steady increase in Ireland's export and import relationship with Europe's strongest economy.

At the same time, Ireland's international business profile will be raised. International companies often enter the Irish market through their representatives in the UK. A Brexit means that Ireland will see many companies establish their own Irish centre of operations here and this will bring fresh opportunities and new investment.

Meanwhile, Ireland and Germany will work closely together at a political level.

Germany needs to trade with the UK, almost as much as Ireland. Both of our nations are on the same page on the need to ensure that the EU ultimately agrees a good and sensible deal with the United Kingdom.

Irish Independent

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