A BRITISH exit from the European Union could knock more than €2bn off the value of the Irish economy as early as next year.
Economies across the European Union will be hit if British voters plumb to leave the EU in the all-or-nothing referendum in June, according to research by Dutch lender ING.
Ireland will see the biggest economic contraction outside of the UK in the event a so-called Brexit, ING's chief Eurozone economist, Peter Vanden, Houte said.
The fallout here could be a reduction of up to 1.1pc of the size of the economy by the end of 2017 - almost as great as the effect on the UK's own economy.
The Irish economy, measured by the standard gross domestic product gauge, is worth just over €200bn.
The Department of Finance here has estimated that growth will be around 3.5pc next year, without factoring in the possible effect of a Brexit.
Based on those figures, ING's estimated cost of a Brexit to Ireland of 0.5pc to 1.1pc of GDP could comfortably exceed €2bn.
Other countries inside the Eurozone that are also in the frontline for Brexit-related losses are Malta, the Netherlands, Belgium and Luxembourg, which would also see a big hit to their growth rates.
In Ireland 6pc of all jobs and a similar share of "value added" in the economy relate to demand from the UK, ING said. In Malta, the next most severely affected country, the levels are about 5pc.
Up to 0.3pc of Eurozone GDP will be lost in the two years it would take to negotiate a British withdrawal from the EU, ING reckons.
Longer term affects are harder to assess. If it votes to leave, Britain has two years to negotiate exit terms, a period that would see a sharp depreciation in the pound.
It could fall as low as €0.90 against the euro, hammering Irish exports.
As well as hurting exporters the weaker pound would see companies with big UK sales hit when profits are converted back into euros - in the case of Ireland, that would include banks such as Bank of Ireland and airlines including Ryanair.
After a Brexit, if that happened, falling exports, weaker investment and a policy shift in the remaining EU away from free trade, would all combine to create a significant adverse shock, economists at ING reckon. (Additional reporting Telegraph)