Sunday 15 September 2019

Kevin Doyle: 'Dublin and Brussels know full well what no deal will mean - but won't say it out loud yet'

Taoiseach Leo Varadkar Photo: Michael McHugh/PA
Taoiseach Leo Varadkar Photo: Michael McHugh/PA
(Stock picture)
Kevin Doyle

Kevin Doyle

It will be at least another month before the Government reveals what will happen at the Border in the event of a no-deal Brexit.

There is an understanding between Dublin and Brussels about what contingencies can be put in place, but all sides are afraid to say it out loud.

Ireland isn't mandated to talk about the next steps, partly because it would undermine the EU's negotiating position.

And in any event there are concerns in Dublin about the political ramifications of airing the real-life impact of not having the backstop.

Sources are slow to talk about what happens on November 1 but the Irish Independent understands the European Commission believes parts of the all-Ireland economy simply won't work without the backstop.

The EU is willing to be as flexible as possible but ultimately needs assurances the single market will not be compromised. That means Irish officials will have to monitor goods and animals coming into the Republic from Northern Ireland. Checks must happen or else the Brexiteers will have been right all along about the potential for alternative arrangements.

In truth, if there was a genuine substitute for the backstop then surely it would have been in Ireland's interest to put it on the table a long time ago.

A number of options for mitigating the impact are on the table but it's "not going to be pretty". The Government didn't 'ramp up' preparation for a disorderly Brexit after Boris Johnson took office because they were already in 'code red' territory.

An updated contingency plan was published in early July and after that the various cross-departmental teams working on Brexit were afforded some summer break - but minimum numbers had to be in work at all times.

They are all back now, although sources admit everything they are doing is "only mitigation".

Revenue officials continue to call large businesses and SMEs, telling them how much trade they did with the UK last year. Yet in some cases the seriousness of the message still isn't hitting home.

A major communications plan is being prepared but Government sources say people have to be proactive themselves.

There isn't one single answer to the question of how a hard Border is avoided, meaning sacrifices will have to be made.

Fresh from its holiday, the European Commission is studying the possibility of allowing checks take place at the "point of arrival". This is likely to involve veterinary checks at factories and other food processing facilities.

Extra veterinary staff have been hired to facilitate East-West trade but none has been recruited to run internal checkpoints. However, the foot and mouth crisis of 2001 has been referenced as a precedent for existing resources being redeployed on a temporary basis as part of an emergency response.

However, it won't be possible to save some agri-businesses who will be simply priced out of the market by World Trade Organisation tariffs.

There is broad agreement between the EU and Ireland in relation to a system that will be used to collect tariffs on items not related to food or agriculture.

A lot of work has been done but you won't hear our politicians talk about it in anything other than vague terms because they fear that as soon as they officially explain what will happen, the UK will interpret it as an acceptance that the backstop is dead.

Brexit is unpredictable but late September is seen as the point where life-changing decisions will have to be made.

Even more so than Ireland, the EU is now determined to defend everything the backstop stands for.

The solidarity achieved by the EU has been unprecedented and will be used in future as an example of how small countries have a place at the heart of Europe.

Michel Barnier's taskforce took the first two weeks of August off but now it's all hands on deck again.

The view is that at this stage it would be better for the EU to deal with a hard Brexit than to betray Ireland.

The next significant Brexit announcement from the Government is likely to be from Finance Minister Paschal Donohoe in the coming weeks.

He has been working on two Budgets: one based on an orderly Brexit and the other on utter chaos.

The latter is now the "central scenario".

The summer period is usually when ministers test-drive some ideas for the following year but some have gone to great lengths in recent times to play down expectations of what they will be able to deliver in 2020.

The Budget will be delivered on October 8 - a week before the final showdown between Mr Johnson and EU leaders at a summit in Brussels.

Mr Donohoe now seems likely to borrow money in order to fund 'stabilisers' for the sectors of the economy worst hit by Brexit.

It will be a sad end to a brief boom.

Irish Independent

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