Economic fallout from Brexit will test Ireland’s ‘new politics’

Government likely to get broad political backing for its strategy on UK exit talks

Enda Kenny will arrive at an EU summit in Brussels next week with the huge problem of Brexit in front of him but, in theory, only the support of a shaky minority Government at his back.

Since Kenny's new Government took office, a possible British exit from the EU was seen as a crisis of such magnitude that it could bring down the administration before it really got going. Some said a Fine Gael-Independent minority Coalition reliant on the acquiescence of Fianna Fáil would be paralysed by a shock as seismic as Brexit.

Yet the initial indications are that the nightmare political scenario could, in fact, show the so-called new politics at its most effective.

Kenny will enter the first phase of what will be a protracted process to extricate Britain from the EU at the European Council meeting next week. His main aim will be to protect the Irish position, which is likely to mean aligning himself with David Cameron on certain issues against other member states.

READ MORE

Triggering negotiations

The first signs of how this may play out are already evident. As he announced his resignation in Downing Street,

Cameron

said the task of officially triggering negotiations to leave by invoking article 50 of the

Lisbon

treaty will be for his successor.

But many senior EU figures, including Jean-Claude Juncker, the president of the European Commission, demanded the departure process begin immediately. Kenny, however, agreed with Cameron's position.

He was supported in this by Fianna Fáil's Micheál Martin, Labour's Brendan Howlin and Eamon Ryan of the Green Party. Howlin has called for a "careful, deliberative process" and Ryan said the EU must allow "time for reflection" before the Brexit negotiations begin in earnest.

Of shared concern to Irish politicians are the Border, the Common Travel Area and the common labour market. Irish and British officials will meet shortly to sketch out how to jointly approach these issues at the summit.

Sinn Féin has called for a Border poll on a united Ireland, which the other parties have described as a diversion, and the Anti-Austerity Alliance-People Before Profit party has welcomed Brexit from a left-wing perspective.

The key relationship to the functioning of this Government, however, is the one between Fine Gael and Fianna Fáil, and the parties are virtually as one in their approach to EU affairs.

Martin committed to supporting the Taoiseach in his efforts to protect Irish interests in the Brexit negotiations. Martin will “tic tac” with Kenny ahead of the summit and both will work with their European allies to get as much breathing space for Britain as possible.

New relationship

The aims of many Irish parties will be similar as the UK maps a new relationship with the EU in the months and years ahead.

Government sources, while acknowledging most of the negotiations on future arrangements between the EU and Britain will be carried out between the UK and the EU as a bloc, also believe there is a basis for future bilateral co-operation.

One source pointed to a 2012 agreement between Ireland and the UK as a potential starting point. This joint statement agreed by Cameron and Kenny outlined co-operation in areas such as the economy. This framework will be examined anew for dealing with any potential post-Brexit scenario, including in the area of trade.

One senior political figure, who was firmly advocating a Remain vote, privately said in recent weeks that trade between the UK and Ireland would find a way, no matter what.

While trade deals can only be struck with non-EU members as a union-wide bloc, Minister for Finance Michael Noonan used arguments of historical links as a reason why other bilateral arrangements, such as on a common labour market, could be reached between the states.

Other parties in the Dáil would almost certainly agree, but Brexit dangers for a weak minority Government do not lie in the negotiation process on a UK withdrawal. It will instead be the economic crosswinds caused by Brexit that will test the “new politics” of the 32nd Dáil.