Cantillon: Ireland’s dangerous ‘diplomatic dance’ over Brexit

Ireland’s Brexit strategy was described by one senior official this week as a “diplomatic dance”.

While not wanting to be seen to be working against British economic interests, the Government can't exactly sit on its hands while France and others gobble up what falls from the table.

To this end, the IDA plans to unleash a marketing drive in Europe and the US aimed at wooing companies caught in the Brexit crossfire.

The campaign won’t refer to Brexit directly, but will simply remind firms of Ireland’s competitive tax offering.

"At this point, it would be too commercially sensitive to disclose these details [of the plan] due to competition from other territories for any newly mobile investment that may come about due to Brexit," a spokeswoman told The Irish Times.

Officials were in touch with clients within hours of the referendum result last month and a series of bilaterals with big London banks have already been set up.

The agency is said to be targeting banks such as Standard Chartered and Royal Bank of Scotland about relocating hundreds of traders and support staff here.

"An influx of city bankers would be a nice issue to be dealing with," IDA boss Martin Shanahan said at an event earlier this week. "We will fight Ireland's corner as hard as we can."

French prime minister Manual Valls has already pledged to make its tax regime for expatriates the most favourable in Europe in a bid to snatch London's displaced banking business.

The potential regulatory implications of Brexit, specifically on the passporting arrangements of financial houses, place a massive question mark over London’s position as the financial centre of Europe.

That said, London has few serious financial rivals in Europe and predictions that it would struggle by staying out of the euro were completely wrong. However, Brexit represents a more profound shift. It's unlikely Britain will remain passive amid this recalibration of economic interests. A more aggressive tax offering was already in the pipeline before chancellor George Osborne (above) pledged to lower its corporate tax rate below 15 per cent in the wake of the vote.

As they say in diplomatic circles, there are no friends just interests.