Britain is ‘the only adult’ in room for financial services

Britain is streets ahead of other EU countries when it comes to financial services and Ireland will be left "exposed" by not having them at the European negotiating table, the head of the Irish Stock Exchange, Deirdre Somers, has warned.

Ms Somers said she was involved in a lot of negotiations at European level and “with great deference to my European colleagues, when Britain leaves the room, from a negotiation perspective, the only adult has left the room”.

"They are the most charismatic, the most capable, they have a machine . . .and they are utterly consistent and ruthless in the execution of that," she told The Irish Times Brexit Summit in Dublin.

Britain has not withdrawn from EU council meetings but is expected to pull back once exit negotiations start with the triggering of article 50, the official departure mechanism.

“Having them leave the negotiating table means that Ireland is now exposed. We’re exposed to the fact that the greatest advocate and the country that believes in doing business the way we do business is leaving the room,” Ms Somers said.

However, she said anybody who thinks the City of London is going to disappear as a result of Brexit is “delusional”, noting the city was extremely adaptable and the most professional.

New scenario

Nonetheless, she acknowledged that if the British capital loses its passporting rights to operate freely across Europe’s financial markets, it would have a problem. In this scenario, Ms Somers said London was likely to set itself up as a gateway between the US and Asia, a process already in its infancy.

On the opportunities for Ireland, Ms Somers said the State was “uniquely positioned” to benefit from Brexit, albeit Ireland and Dublin had significant capacity constraints around people and talent, and around commercial property.

Despite this, Ireland would be a net gainer in financial services, she said.

Also addressing the summit was the head of Enterprise Ireland Julie Sinnamon, who said market diversification remained Ireland’s best response to Brexit. She said exporters should continue diversifying into other markets rather than waiting for the outcome of Britain’s exit negotiations with EU.

Brexit acceleration

Ms Sinnamon said the UK’s share of Irish exports had already fallen from 45 per cent to 37 per cent in the past decade and this trend was likely to be accelerated by Brexit.

She said the State agency had recalled its global staff for a week-long think-in at the start of October in a bid to identify new markets and reduce Ireland’s reliance on the UK.

Chief executive of solar energy firm Amarenco John Mullins warned Brexit had the potential to slow the move towards an all-island energy market but conversely euro assets and Irish energy projects would be more attractive .

This could boost investment in renewables here, helping the Government meet its 2020 energy targets, he said.

Deloitte partner David Carson said the key message to business is that when there is great uncertainty “you need to plan more”. Contrary to the traditional Brexit flight narrative, Mr Carson said a number of Irish businesses were looking at possible acquisitions in the UK to ensure they had a foothold in the market after 2019.

Despite the frenzied speculation around Brexit in Ireland, writer and academic Aifric Campbell said the “hard truth” was that the British public did not really appreciate Ireland’s position or role in the process.