Concern for Irish economy in UK exit
Any shift in Britain’s relationship with the EU could have “massive economic implications” for Ireland, the Irish Business and Employers Confederation (Ibec) said today.
However IDA Ireland said a decision by the UK authorities to leave the EU was likely to attract foreign direct investment because the State would be the only English speaking economy in the union.
The organisations were reacting to British prime minister David Cameron's promise today of a decisive referendum on Britain's membership of the EU within five years, if the Conservatives win the next general election
Mr Cameron said his 2015 election manifesto would seek a mandate for a “new settlement” for Britain in Europe. People would then be offered a “very simple in-or-out choice”, Mr Cameron said during the long-awaited speech in London.
“Any shift in Britain's relationship with the EU could have massive economic implications for Ireland. Irish business is best served by an EU with full and active British participation,” Ibec chief executive Danny McCoy said today.
"Ireland has a unique economic relationship with the UK. Britain is our most important trading partner and we have a shared consumer market. On many issues Britain is our closest ally in Europe,” he said.
The short term opportunities it provided were outweighed by the long term risk, Mr McCoy said.
While it could provide opportunities on the short term if Ireland can attract investments during the UK’s four year uncertainty, the bigger picture was the “loss of the Anglo-Saxon view” in Europe and uncertainty in psychological terms.
However because Irish business have become more globalised since the State joined the EU, for individual business it would not make much difference, he said.
A complete exit from the EU may “lead to a situation where the UK is not subject to EU rules” which would provide “some flexibility in relation to improving the UK’s offering to external investors”, State development agency IDA Ireland said in a statement today.
``Strictly from a foreign direct investment (FDI) perspective, any decision by the UK authorities to leave the EU would leave Ireland as the only English-speaking economy in the EU, which would likely prove attractive to many investors,” it added,
Economist Alan McQuaid of Merrion Capital said an exit by the UK could be positive or negative in terms of attracting FDI. “Overall I’d be more worried if they leave as the uncertainty could do damage to us in the near term and impact on our own prospects going forward,” he said.
In the immediate term weakness in the sterling caused by the uncertainty could effect the State's trade with its biggest market, Mr McQuaid said. “If sterling is weak it is not good for our exports or our tourism” Mr McQuaid added. “It create uncertainty that no business wants” he said.