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Paschal Donohoe says Irish economy is 'well-capable' of withstanding a no-deal Brexit

It’s estimated that there would be 55,000 fewer jobs in Ireland if there’s a no-deal Brexit.

Image: PA Wire/PA Images

MINISTER FOR FINANCE Paschal Donohoe has said that Ireland’s economy is “well-capable” of withstanding a no-deal Brexit.

He said that although the possibility of a no-deal Brexit was “clearly growing”, the Irish economy was prepared. 

“We have an economy well capable of responding to a no-deal Brexit, approaching the challenge with more people working in Ireland than ever before… This is a shock that we have the ability to respond back to, if we need to,” he told Newstalk’s Pat Kenny Show this morning.

He said that if there is a no-deal, he would “kick off a whole chain of reactions” to combat the effects a no-deal Brexit would have, but added that the irish government would have to “reassess expectations”.

But Donohoe also said that “it is possible to get an agreement in the time we have available” and that “we should not be fatalistic about our ability to secure a deal”.

“With goodwill, we are capable of reaching an agreement and ratifying the Withdrawal Agreement,” he said.

The Withdrawal Agreement has been rejected three times in the space of three months by the UK Parliament. The Withdrawal Agreement lays down the terms for the UK’s exit from the EU; the future relationship, including trade deals will be in the next phase of talks, only after the Withdrawal Agreement is passed.

The Withdrawal Agreement contains the Irish backstop, which was agreed to by Theresa May during her tenure as Prime Minister, but which her successor Boris Johnson has promised to scrap, in the hope that it secure the Withdrawal Agreement’s passage through the House of Commons.

On Newstalk, Donohoe acknowledged that “there is a difference in tone and attitude” between this UK government led by Boris Johnson, and the last one.

He said that these were mainly, the last British government wanted the backstop changed, and the current government is calling for the removal of the backstop “in its entirety”.

When asked if there was room for manoeuvre around the backstop, Donohoe said that he would ask others who think there is an alternative to the backstop: “Where else in the world does this exist?”

If an alternative [to the backstop] could have been found in the past two years – it would have.

In the event of a no-deal Brexit, the trade relationship between the UK and the EU will shift from free trade and shared customs rules under the Single Market and the Customs Union, to World Trade Organisation tariffs which are the most basic trading rules.

The implied tariffs on UK to EU exports published by Paschal Donohoe previously were on meat, cereals, sugars and sweets, tobacco, processed meat and fish, dairy, eggs, honey, and flour, which all have WTO tariffs of over 25%.

Ireland’s UK imports account for 24% of its total imports, which compares with the UK  making up 13% of Ireland’s total exports. The monetary value of those are narrower than expressed in percentage terms, though: imports to the UK are worth over $18.4 billion. 

Customs checks would add delays and costs on goods going between Ireland and the UK.

Tariffs will hit Irish businesses that rely on exports to the UK: by 2023, there would be an estimated 55,000 fewer jobs under a no-deal Brexit and the economy will be growing at a slower rate.

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