Monday 16 July 2018

Dublin will benefit from Brexit - O'Leary

Businesses shouldn't take sides in Brexit debate - Walsh

Ryanair chief Michael O'Leary. Photo: Bloomberg
Ryanair chief Michael O'Leary. Photo: Bloomberg
IAG boss Willie Walsh
Colm Kelpie

Colm Kelpie

Dublin could benefit greatly from a British withdrawal from the EU as financial services companies will look to relocate from London, Ryanair chief Michael O'Leary has said.

Although Mr O'Leary is openly urging British voters to remain in the EU, claiming it would be a "crazy act of economic folly" to pull out, he said there would be at least one positive for Ireland.

"London will stay one of Europe's big financial capitals," Mr O'Leary said. "But a lot of the financial services industry will leave London and will relocate either to Frankfurt or to Dublin. Dublin will do well, especially in the financial services sector, because you'll find a lot of the foreign inward investment moving to an English-speaking economy like Ireland."

At a Brexit event hosted by law firm McCannFitzGerald on Friday, Goodbody Stockbrokers economist Dermot O'Leary agreed.

"If you look at reasons why companies locate in particular countries, there are plenty of reasons, but one of the biggest reasons is access to a home market. Obviously that's the wider EU community, which falls away in a Brexit. So I can't see how Ireland wouldn't benefit from an increased flow of FDI in the event of the UK not being part of the EU."

Willie Walsh, the head of International Airlines Group (IAG), has said businesses should stay out of offering an opinion on whether the UK should vote to pull out of the European Union - unless they believe it will specifically affect their operations.

The boss of IAG, which owns British Airways, Aer Lingus, and Spanish carriers Iberia and Vueling, said he doesn't believe his business will be affected if there's a vote for a so-called Brexit on June 23.

"From a business point of view, we've taken the view that it's not for us to tell people how they should vote," Walsh told the Sunday Independent.

"We've assessed the business impact and we've concluded that we don't identify any material impact for us. It clearly introduces some business uncertainty, but we think that will wash through.

"It's not going to stop people flying. Trade will still continue, although the degree to which it continues is the uncertain bit. But I think that in due course, all of that will get sorted out," Walsh said.

He added that he has a vote in the referendum and that he will be voting for the UK to remain in the EU, but stressed he was speaking in a personal capacity.

"I'm not expressing a view on behalf of my company and I don't think it's appropriate that business people are using their businesses unless there's a good business reason," he said.

"If I thought there was a risk to my employees, if I thought this was going to lead to something that they need to know about, I would communicate that. But we don't.

"Airbus has come out publicly and said they can see some risk. They've communicated that to their employees.

"You need to be careful. I don't think it's the role of businesses to be telling people how to vote."

Walsh's comments are in contrast to those of Ryanair chief Michael O'Leary, who said last week that businesses should be speaking up.

"Too many businesses are too reticent about getting involved, and they should get out [and say] because it will damage business and it will damage the economy if they leave," he said.

Walsh said that while he favours Britain remaining in the EU, he believes that reform is required.

"The EU does need to be reformed," he said.

"My own personal experience of dealing with the Commission is not very encouraging but I think the UK could have much greater influence in reforming the EU from within.

"If you put some of the energy that's going into this debate into trying to exercise their influence within Europe, I think Europe would be a much better place."

O'Leary also said he believed that a vote to withdraw would not affect the aviation business.

"Whether the UK stays in Europe or leaves Europe, people are still going to fly. They're still going to go to Spain and Greece on their holidays. Most of the Europeans will still be going to London."

Meanwhile, a report released on Friday showed that just a fifth of the UK's FTSE 250 companies have discussed contingency planning for the possibility of a British withdrawal.

The survey also found that 10pc of the FTSE 250 Heads of Internal Audit said that they had no intention of making any contingency plans, while 62pc said that they planned to do so, but that it was not yet possible, due to uncertainty.

Ian Peters, chief executive of the Chartered Institute of Internal Auditors, said the good news from the survey is that Brexit is being considered by most FTSE 250 companies, at a senior level.

However, our survey shows that most boards haven't undertaken contingency planning yet, but most plan to.

Business body Ibec warned recently that if Britain leaves the EU it will force the value of sterling down sharply and have a crippling effect on Irish firms trading there.

It said sterling may end up losing as much as 15pc of its value if the UK was to vote to leave the European Union. That devaluation would make Irish products being traded into Britain and Northern Ireland much more uncompetitive on price and could end up cutting trade between the two jurisdictions by as much as a fifth.

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