Stable government needed to face into Brexit vote – Sutherland

Peter Sutherland won't discuss the merits or otherwise of a Fine Gael-Fianna Fáil coalition, but he is clear on one thing: Ireland cannot face into the Brexit referendum without a stable administration. A government is needed, and quickly.

“The Irish situation as I’m viewing it is only in the context of Brexit,” says Sutherland, who recently retired as chairman of Goldman Sachs International.

“This is the biggest political-economic event in 70 years of history, in my view. It is disappointing, to put it mildly, that we do not have a stable government to address this particular issue.

“If there’s a positive vote, there’s no issue. But if there were to be a negative vote – and nobody knows anything other than there would be a big risk – then a lot of issues will begin to crystallise.”

Sutherland is seated at a boardroom in the headquarters of Ibec after a lunch meeting with Irish corporate chiefs. A former EU commissioner and former chief of the World Trade Organisation, he ridicules the notion that Brussels would provide all the advantages of EU membership to an ex-member. Talks on of exit terms would be extremely difficult, he says.

“They will have to renegotiate over 50 free-trade agreements with countries around the world that the EU currently provides for them,” he says of Britain. “And they will have to negotiate a treaty or agreement with the EU, which will include Ireland, in regard to what will happen next.

“I think under any scenario the UK will be required to provide free movement of people, financial contributions very comparable to the financial contributions that exist today, and the application of rules and regulations just as if they were members.”

Emotional debate

Sutherland is as ardent a European federalist as they come. So it’s hardly a surprise that he sees no logic at all in a repudiation of the EU by Britain.

“But that’s not the point,” he says. “The emotion is driving the debate in Britain, and therefore it has great importance to Ireland. The sooner we get a government in place, which is stable and not consumed by issues which are relatively minor . . . the sooner that happens, the better.”

True, a minority FG-led government is only prospect right now. Given the requirement for stability, would a FG-FF coalition be better?

“I’m not going to offer a view as to whether they should be in coalition,” Sutherland says. “I am going to offer a view about the absolute necessity for a stable government that is going to survive for a reasonable period of time.”

But will it be more difficult for a government without a Dáil majority? “Obviously, yes.”

On whether British leaders understand the issues for Ireland, he has heard virtually no comment other than when he brings it up. Likewise, not having spoken recently to any senior Irish politicians, he has no idea whether they are seized of the Brexit question.

“But what I do know is that the immediate trauma following a Brexit vote . . . will be very considerable, and it may have all sorts of implications in terms of our market and the investment strategy of those who would seek to locate and develop businesses in Ireland, both positive and negative.”

The decline in sterling when Boris Johnson declared for the Brexit camp is salutary, he says.

“Now, if sterling is going to take a hit because Boris Johnson decides to go one way or the other, which astounds me. But if that is the case, imagine what the case will be if there is a decision to exit, contrary to the advice of every major trading partner in the world, the most eminent of which was Obama.”

Favourable dea

l Furthermore, he dismisses the notion that mutual self-interest will see to it that Britain can secure a favourable trade deal with the EU from outside.

“The potential of a dismembering of the EU as a result of the example given by the UK is going to be a powerful stimulant for a difficult negotiation from the UK point of view.

“There will be some form of free-trade agreement . . . But it is far from the case that there will be free movement of services, and the banking industry is an issue which is very much in the firing line.”

Sutherland concludes by saying it is “profoundly misplaced” to suggest Ireland should review its own EU membership if Britain leaves.

“We know the history of a solely bilateral relationship with the UK over decades before we joined the EU together. We know that Europe has transformed our position, and our industrial strategy is based on securing inward investment and indeed indigenous investment.”