Ibec warns of 'massive economic implications' for Republic

Thu, Jan 24, 2013, 00:00

BUSINESS REACTION:Any shift in Britain’s relationship with the EU could have “massive economic implications” for the Republic, the Irish Business and Employers’ Confederation (Ibec) said yesterday.

However, IDA Ireland said a decision by the UK authorities to leave the EU was likely to attract foreign direct investment (FDI) because the State would be the only English-speaking economy in the union.

In the North, meanwhile, business leaders greeted David Cameron’s referendum commitment with a warning that any outcome could have a more severe impact on the North than elsewhere in the UK.

Ann McGregor, chief executive of Northern Ireland Chamber of Commerce, said that it was of “critical importance” that businesses had access to the European market – but not at any cost. “On this basis, the prime minister’s determination to negotiate a new settlement for Britain is probably the right course of action. However, it is important to consider the implications for Northern Ireland from a trade perspective.

“For example, the Republic of Ireland is our most important export partner and we have a lot to lose,” she said.

The Confederation of British Industry also stressed that the EU single market was fundamental to the UK’s future economic success but it believes that a reformed EU, not entry to the euro zone, is the way forward.

Full British participation

In Dublin, Ibec chief executive Danny McCoy said Irish business would be “best served by an EU with full and active British participation”.

“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.”

The IDA, in a statement, 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”.

“Strictly from a foreign direct investment 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.